Most of us are skeptical that insurance companies are devoted to our health. Answer the following question. Do you think your insurance company is more interested in your health or in controlling costs? Pretty tough question, huh?
There is a tension between medical quality and medical costs. If we had a system that offered perfect quality, it would be unaffordable. If we imposed rigid cost controls, then medical quality would be compromised. Where do we draw the line?
It is clear to most of us that the medical industrial complex is riddled with waste. Keep in mind that one man’s medical waste is another man’s income. For example, physicians define waste as excessive charges by hospitals. Government officials define waste as excessively high drug prices. Patients define waste as high co-pays and deductibles. Drug companies define waste as outrageous legal expenses to get drugs to market and to defend against frivolous lawsuits. Primary care doctors define waste as unreasonably high reimbursement that medical specialists receive. Keep in mind that most folks don’t feel they are overpaid, but are quick to point to others whom they accuse of being overcompensated. For example, when a politician floats a proposal to tax the rich, we hope that the definition of rich is anyone richer than we are.
Steak is cheap when someone else is paying for it.
Get the idea? In summary, medical waste is easily defined. It is money that someone else earns.
This is why excising medical waste from the health care system is so difficult. Who would you trust to decide which waste should be wasted? The government? Physicians? Pharmaceutical companies? I don’t have an easy answer here. Part of the solution, in my view, is when patients have a little more skin in the game. Here’s how this works.
A physician advises an MRI of the back on two different patients. Patient A has full coverage for the study and would face no out-of-pocket costs. Patient B has a $5,000 deductible and would have to write the radiologist a big check.
Patient A: “Thank you, doctor. My back has been hurting for over a week. I’d like to get it done as soon as possible.”
Patient B: “$940! Can I try those exercises you recommended instead?”
It’s always easier to spend someone else’s money. Do you find that you order differently in a restaurant when it’s on someone else’s dime?