wphelan
Feb 9th 2010, 05:42 PM
http://www.youtube.com/watch?v=3E29LD98ruo&feature=player_embedded
I thought this was an interesting piece by Reason.tv. It looks at Lasik eye surgery and how it could be used as a model for the rest of health care. Lasik eye surgery has been around for about twenty years, and in that time the quality of care has increased while prices have dropped. How is this possible when most health care costs have been drastically rising?
The key is that Lasik is not covered by insurance. It's a cash market. It's subject to real market forces, unlike most of the health care industry. It's never made sense to me that so called 'insurance' pays for most people's routine medical costs. How can one insure against something that is routine? It would be like having car insurance to pay for oil changes. To maintain good health, people get check ups and tests. That's a fact. Shifting costs to a third party drives the prices up because now the patient doesn't care about price. When people don't care about prices, prices are always going to go up. There's something fundamentally wrong with a system where I can walk in to a doctor's office for a routine checkup, tell them I'm paying cash, and they respond by charging me less than they would an insurance company.
But why did the health care industry evolve this way? As it so often does, the US tax code creates perverse incentives that create all kinds of problems. In this case, it's tax-free employer provided health care that has led to ninety percent of all non-elderly people to have their health insurance provided by their job. This makes no sense. What benefit is there to have health insurance coupled to one's employment? It's a boondoggle that forces people to make choices that only exist because of the tax code. Should I keep my office job so my family is covered for health insurance, or should I take the risk and be self-employed in the line of work I've always wanted to pursue? The cost of health insurance wouldn't be a factor in this decision if individuals were able to purchase health insurance on the same playing field as employers. Eliminating the employer-provided tax exemption would go a long way.
I thought this was an interesting piece by Reason.tv. It looks at Lasik eye surgery and how it could be used as a model for the rest of health care. Lasik eye surgery has been around for about twenty years, and in that time the quality of care has increased while prices have dropped. How is this possible when most health care costs have been drastically rising?
The key is that Lasik is not covered by insurance. It's a cash market. It's subject to real market forces, unlike most of the health care industry. It's never made sense to me that so called 'insurance' pays for most people's routine medical costs. How can one insure against something that is routine? It would be like having car insurance to pay for oil changes. To maintain good health, people get check ups and tests. That's a fact. Shifting costs to a third party drives the prices up because now the patient doesn't care about price. When people don't care about prices, prices are always going to go up. There's something fundamentally wrong with a system where I can walk in to a doctor's office for a routine checkup, tell them I'm paying cash, and they respond by charging me less than they would an insurance company.
But why did the health care industry evolve this way? As it so often does, the US tax code creates perverse incentives that create all kinds of problems. In this case, it's tax-free employer provided health care that has led to ninety percent of all non-elderly people to have their health insurance provided by their job. This makes no sense. What benefit is there to have health insurance coupled to one's employment? It's a boondoggle that forces people to make choices that only exist because of the tax code. Should I keep my office job so my family is covered for health insurance, or should I take the risk and be self-employed in the line of work I've always wanted to pursue? The cost of health insurance wouldn't be a factor in this decision if individuals were able to purchase health insurance on the same playing field as employers. Eliminating the employer-provided tax exemption would go a long way.