There is no denying that healthcare costs continue to spiral out of control. At the leading edge of those costs are ever-increasing insurance rates and higher prices for prescription drugs. Moreover, employers are bearing a disproportionate amount of the weight of a broken health insurance system.
According to a Maestro Health survey, employers collectively lose more than $225 billion annually to healthcare related issues. That works out to more than $1600 per employee. That amount does not include what they pay for their portion of health insurance benefits and the administration of their insurance plans.
Many Different Players
So what’s going on? Why is it that healthcare costs continue to spiral out of control despite our system being one based on free markets? Perhaps the primary culprit here is consumer ignorance.
There are many different players contributing to our national healthcare problem. It’s easy to point to pharmaceutical companies, for example, understanding that some of the prices they charge are more than just cost-prohibitive. They are astronomically unaffordable.
It is also easy to point to insurance companies that look to spend as little as possible by limiting coverage whenever and wherever they can. We can even point to healthcare providers that run up the bill by ordering unnecessary tests and following impractical treatment plans.
Still, consumers ultimately maintain control over the system. That is how free markets work. As such, it would be productive for us to step back and look at the issue of ignorance. What people do not know about their own healthcare may be the primary reason they pay so much.
Consumers Just Don’t Know
That previously mentioned Maestro Health survey revealed that 35% of employees struggle to understand their healthcare coverage. Many know absolutely nothing about it. Some 33% don’t understand their medical bills. These are numbers that should not be quickly dismissed.
In their 2020 Healthcare and Benefits Update, Dallas-based BenefitMall suggests that employers make a concerted effort to educate employees about all things healthcare. The thinking is that better education empowers consumers to make wise healthcare decisions based on their own best interests, rather than just going along with the system.
To that end, know that our system is set up in such a way that the average consumer has no idea what medical procedures cost. Consumers also don’t know that they have the right to shop around. And because they do not know they can do it, they don’t. What is the end result? Healthcare providers and insurance companies that are free to work things out among themselves without involving the consumer at all. This is a recipe for constantly rising prices.
Let Consumers See the Bill
Even as you are reading this post, unhappy consumers are demanding that something be done about drug companies whose prices have risen exponentially in recent years. Why are consumers upset? Because they are finally seeing the bills. They are finally seeing how much their prescriptions cost out-of-pocket.
What if consumers got to see all of their bills before insurance companies paid them? What if they knew that a hospital was charging $5,000 for a procedure that an independent clinic could do for less than half?
There is no arguing that health insurance premiums are higher than they ought to be. There is no arguing that prescriptions cost too much. Yet insurance companies and healthcare providers are only partly to blame. They do what they do because consumer ignorance allows it. The best way to fight the system is to educate consumers to the extent that they finally stand up and demand systemic changes.