In my first and second posts in this series, I wrote on how third-party payer systems increase costs—specifically health care costs—because they cause less consumer responsibility. Greg Scandlen over at The Heartland Institute recently wrote on this same topic, citing a New York Times article on the rising costs of childbirth. According to the Times, from 2004 to 2010, the cost for vaginal births went up 49% and the cost for C-sections went up by 41%. What gives? Perhaps the story of the Chris Sullivan and his wife can give us some insight:
So when the obstetrician suggested an additional fetal heart scan to check for abnormalities, they were careful to ask about price and got an estimate of $265. Performed by a specialist from the Children’s Hospital of Philadelphia, it took 30 minutes and showed no problems—but generated a bill of $2,775.Imagine getting an estimate for 1/10th of the actual “cost.” And “cost,” here I take to be a relative term. Sullivan fought the hospital until after six months the hospital honored the estimate. Now that’s some accountability! Scandlen agrees. He writes:
…that is what our system needs. Not third-party payers who know they can always raise premiums to cover these ridiculous costs so never bother to argue, but engaged (and sometimes enraged) consumers who refuse to be treated like patsies. Inject millions of such consumers into our system and we will soon see hospitals find a way to price services fairly.Consumers are more likely to keep track of their money and the costs of services more than a company will. Scandlen presents testimonial evidence of this. When he worked at Blue Cross and Blue Shield of Maine in the 1980s, his company wouldn’t even bother using their time to assess the claims of a hospital bill that was under $5,000. As he puts it: “It simply wasn’t worth the expense of paying professional staff [to] review these items.” Maybe we should give a second thought to how quickly we buy into the health insurance scheme. After all, it seems we reject all sorts of other insurance. We reject the insurance that doesn’t exist because nobody would buy it: food insurance by the supermarket, education insurance by academia, etc. We also often don’t consider some insurance that does exist in the marketplace worth it: travel insurance, volcano insurance, earthquake insurance, etc. (Some people in different areas of our country might consider volcano and earthquake insurance, but for yours truly, it’s not worth it in the Midwest.) In the meantime, even if you have insurance, do some haggling with those doctors that don’t follow Michael Ciampi’s footsteps. See how much the bill will cost if you pay out of pocket and maybe you could adjust your insurance plan for those really big emergencies that should only be reserved for the catastrophic events.