The Economics of Health Care

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We all know this country's health care industry is a mess. We also know that Hilary tried fixing it with her husband during his administration and got no where.

Well, the discussion got somewhere, but we don't have a fix. Most of the lobbying and pushing has been for universal health care. Drew Carey made a comment on it recently, "Do you really want the folks that give us FEMA to give us health care?" Enough said.

We hear the headlines screaming about the problems. We know, for instance, that it costs too much. We all hate higher costs. Let's starting breaking it down. We pay 75 percent more on health care costs than Canada. While we pay more, we are at the bottom of the list when it comes to quality care. (Stats on such issues change constantly.)

If you ask individual medical practitioners the reason behind this, they are more than likely going to point their fingers at HMOs. In reality, prepaid healthcare has been around since 1920s. It was a way to get cheaper insurance to workers. It didn't really begin to grow until the Health Care Maintenance Act of 1973. By 1978, there were more than 200 of them. The original idea behind this type of insurance was to get the general masses lower premiums and better health care. The problems began when those involved found out how much paper work it took. If these guys got together and decided to simply their procedures, stop changing the list of approved drugs every week, stop asking for so much paperwork that it slows down most doctors' offices to a snail pace, the situation would improve dramatically. All that paperwork takes additional staff and cuts down on efficiency. Thirty one percent of all health care cost is lost to administrative tasks.

From the healthcare practitioners' side, there is the issue of malpractice and its annual premiums. This, along with the other variables, push the costs of running a private doctor's office to $17k a month. ( www.home.austin.rr.com ) Malpractice and its constant threat pushes doctors to take extra precautions to keep from getting sued. All the times you got stuck when you didn't think it was necessary was the doctor trying to cover his own ass.

We know that malpractice insurance costs a ton. Did you know that nurses also now carry it? We have created an industry where there are so many negatives, it's a wonder anyone still chooses this profession. Ok, here's the deal, if employees were allowed to sue for millions when they got hurt on the job, businesses would be closing so fast no one could keep up. If malpractice was based on a percentage of injury or loss as workers' comp is, we would be on our way to chopping away at problems that are clogging the medical business.

Then, there are the pharmaceutical companies. No one can afford $500 for a bottle of high blood pressure medication. Well, you think the insurance company is covering the cost (and they never reimburse for full price). So, therefore, they are going to look for some way to make up the difference.

Pharmaceutical companies also need to finance their research. (They do get funding from outside sources.) It's a costly affair. And, they too have problems with liability insurance. This should also be tweaked to image the suggestion for medical practitioners. Before you get excited, remember that the only people who get rich from lawsuits are lawyers.

Baby boomers have a part in increased expenses they probably don't realize. You can't walk down the street, listen to the radio, or watch television without being bombarded with ads for products that help with that drat aging process no one want to give into. Pharmaceutical companies aren't dumb. They keep the push on to find more remedies to help with all problems that come with age, wrinkles, blood pressure, heart disease, etc. There is no way to say that some of this isn't worthwhile. This incentive fuels more research. This creates more overhead and additional costs trickle down to the little guy.

The government's overseeing roll in all of this needs to be cut back. In the late 70s, there were big scandals about doctors over billing Medicare, etc. The big regulatory guns came out and they have been interfering with the health care industry ever since. There will always be those who think they can cheat. There aren't big enough regulatory guns to stop it. The only logical thing is create such a big penalty so the potential doers will think maybe a little harder.

The health care industry has so many pieces it is enough to make one's head spin. Trying to revamp the whole enchilada at once would be one big mistake. It has to be taken one step at a time. Keep in mind that all parties have large and powerful lobbies. Find this troubling, starting writing letters to politicians and editors of major newspapers. Making a loud noise is the only way to get change in a democracy. If concerned citizens don't take pen to paper, we may end up, with heaven help us, governmental controlled 'universal health care.'

 

Laura Bell is Freelance Writer and owner of www.bellbusinessreport.com. The Bell Business Report offers common sense business advice and how-to info for running your business. It takes the everyday headlines apart, dealing with business news, and shows you how to put that information to work for you.

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