Health insurance is expensive because healthcare is expensive. A reasonable assertion – though only partially true. Another major contributing factor to the burdensome costs of most health insurance coverages is that the coverage provided doesn’t match the needs of the insured. If the coverage is insufficient, then out of pocket expenses can make the overall costs unwieldy. By the same token, excessive coverage for healthier individuals inflates health insurance rates beyond their necessary bounds. In addition to all of this exists a massive amount of confusion, misdirection, and red tape.
The cornerstone of healthcare cost and quality reform is transparency. It’s a paradigm shift that those in power – government, health insurers, and providers – would like to avoid at any cost. The current system is built upon the foundation of confusing and unclear delivery of goods and services. Insurers negotiate deals with providers to set prices for services and then administer that design through an overly complicated billing/coding system to facilitate payment. It sounds convenient, but in reality, the system makes large sums of money for its architects and managers at the cost of the American healthcare consumer.
Widespread internet access and a preponderance of resources therein have improved the ability of the average consumer to comparison shop service providers in their area. The next step is providing consumers with access to information on quality and cost in advance of treatment so they can determine overall value. An excellent example is Lasik eye surgery. The surgery isn’t covered by insurance and the cost is disclosed upfront and paid for directly by the consumer. Ten years ago, Lasik cost $5000 per eye. Today, it costs $500 per eye and quality has improved dramatically.
Legislators, health insurance companies and providers often claim that healthcare is complicated and making cost and quality information available to consumers will only confuse them. This is fallacious and duplicitous. While healthcare products and services are quite nuanced, assessing their cost and quality is a core component of providing them. Uneducated consumers, by definition, will suffer suboptimal care. Transparent and consumer-centric healthcare is the way forward. To learn more, ask us.