How to Shave $1 Trillion Out of Health Care
In America we spend a lot of money on the service of health
care. In fact it is six percent more
than other high-income industrial democracies.
Is this 1 Trillion dollar difference worth it for Americans? We tend to pay more for a mix of procedures
and services, along with higher prices to drug companies and physicians. These countries that have a lower spending on
health care have one thing in common, a universal insurance for basic care and
more aggressive control of expenditures.
Because the private sector and the federal, state, and local governments
split the cost of the health care bill, both sides would get 500 billion
dollars. The governments could do many things with this money including; new and
fixed roads, increase salary funding for schools, clean up for waste disposal
and many more. In order to get these things we must give up a few also. We would
have fewer visits to offices, fewer MRI and CT scans, less privacy, and longer
waits. Depending on how you look at it,
the tradeoffs could benefit either side.
http://economix.blogs.nytimes.com/2014/03/14/how-to-shave-1-trillion-out-of-health-care/?_php=true&_type=blogs&ref=economy&_r=0
One issue with Americans spending so much more on health care than other countries is partly due to the fact that our costs are much higher. For example, a hospital will charge much more for an operation than what is actually required for a few reasons. 1) they know that patients have to pay whatever price they pay. 2) there is no point of reference for prices. This means that an operation that may take $100 to finance (assuming that pays for equipment and doctors), may actually be charged for $500. There isn't really anything someone can do about it. Unfortunately, the US is guilty of doing this. I think that the first way to being able to get back to prices similar to other countries is giving actual prices for healthcare. Instead of charging 5 times the price an operation costs, make it more realistic. There are many different methods that could be used to fix some of these issues, such as fee-for-service and bundling models.
ReplyDeleteI foresee even high costs in the health care sector due to the newly passed legislation. The massive amounts bureaucracy and red tape will create a lot of waste. In addition, the reduction of competition and and other free market benefits will most likely make costs much high and the system much less efficient.
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