HEALTH COSTS (Part I of III)

My chemotherapeutic drug, Gleevec, costs over $6,000 per month. Quick math says that amounts to over $72,000 per year. I’m supposed to take this for the rest of my life. What would I do without insurance? Have you ever taken a good look at a medical bill after surgery? What would a person do without insurance?

In 1900, the average American spent five dollars a year on healthcare. That’s about one hundred dollars today. Notice though that is $100.00 per year spent, not per visit. As health care costs normally increased, nothing contributed to the cost explosion like health insurance. As the government and some big companies began offering insurance instead of wage increases, there was a big pool of health dollars from which to draw. Thus, doctors and hospitals began charging more for their services.

The increased fees began a vicious cycle which continues today. As doctors and hospitals began to make more money, their suppliers began charging them more for everything from basic medical equipment to tissue paper. To keep their profit margin, doctors and hospitals kept increasing fees. The more money they made the more everyone associated with health care, including malpractice awards, increased their costs. As long as doctors and hospitals could keep going to the goose which was laying the golden eggs, the insurance companies, the fee increases continued…and continues today.

Basically, healthcare costs are based on what insurance companies will pay, not on what individuals can pay. Thus, fees are what a conglomeration of people can pay (insurance premiums) not on what individuals can pay. That is a major cause of our health cost problem today. In our attempt to socialize medical costs by pooling monies to cover medical costs, we now have medical fees at a cost only insurance companies can afford. Individuals have pretty well been priced out of the market by these artificially inflated costs.

As one can see, our medical care is not a free market commodity. It is not based on what individuals can pay. Again, medical costs are based on what thousands of people pooling their money can pay. Why do medical costs always outpace the cost of living or inflation? To reiterate the point again, their fees aren’t based on free market factors of individual people’s ability to pay; they’re based on socialized pooling of monies. Individuals can’t afford healthcare today. Only socialized insurance companies can. How many individuals can afford Gleevec at a price of $72,000 per year for year after year? They typically can’t, and medical costs wouldn’t be so high if medicine didn’t know that insurance companies can and will pay their fees.