Health Care Is Expensive Because We Don't Know How Much It Costs

There are lots of things wrong with America's health care system(s).  The one on which I concentrate in this post is the pernicious impact of "employer-based" health care provision.  That is to say, the system under which most of us receive our health care.  A relic of WWII wage controls, health care through one's job developed as a "fringe benefit" not subject to the impact of wartime restraint.  In order to attract scarce labor, companies began to add health care...and the rest is history.

The problem with this system--at least in how it has metastasized--is that we have arrived a a point in which the average Joe has no sense of the real costs of health care.  Instead, he is confronted with a poor proxy, and that is the monthly insurance premium he pays--which for some reason, he feels is too high.  He feels this way because month after month, hundreds of dollars come out of his paycheck to subsidize everyone else's health care, while he and his family are only modest consumers.  Well, some may say, that is the nature of "insurance"--but from where I sit, it is an insurance like no other.

When I pay a monthly car insurance premium, I do not expect to receive routine auto care.  I do not expect gasoline.  I do not expect new tires on a regular basis.  Each of these services is priced separately and a transaction is the result of my having chosen among several providers.  Insurance kicks in on the high end--when my car is stolen, when I have had an accident--when a tree falls on it. 

Of course health care and car insurance are not the same; but that again, is a choice of our society.  Instead, we lump our payment into "premiums" set as the result of a negotiation between our employer and (usually) one insurance company, who has already negotiated a series of rates with "providers".  We--the ultimate consumer--are insulated by at least two other rounds of transactions from the TRUE cost of our health care, the result of which is, we are not consumers.  We are recipients.  We don't make choices, we receive care.  We don't negotiate for the value, we take what we are given. 

I came across this article this morning on Instapundit, telling the story of a startup that seeks to expose the true costs of medical care.  Why do I find this interesting?  Because I advocate for a largescale overhaul of the way we deliver health care in this country.  No my socialist friends...not single-payer.  I'm talking about a system in which consumers wield the power of their purse, choose among providers and spend their own money on routine health care while negotiating directly with insurance companies to deal with the costs of other than routine matters. 

We must break the employer provided health care chain, one that insulates consumers from cost and limits their choice--not to mention, holds down their wages and decreases tax revenue.  Less freedom and more government is not the answer.  The answer is empowered individuals.