Tuesday, October 25, 2011

Healthcare Solution: Everyone Pays Cash

Everyone's always talking about the health care crisis, it's one of the biggest "hot button" issues these days. Some of us here at People Liking People have had major health issues and we know first hand how incompetent the health care system can be. Costs are skyrocketing and health problems are going undiagnosed for years. So when people start complaining about health care, we're the first to agree and say that some changes do need to be made. Unfortunately the solutions most people are proposing and putting into action are dead wrong and are the complete opposite of what needs to happen to improve health care. Everyone is demanding that the government do something about the crisis, and the government is more than happy to oblige because usually their solutions end up giving them more power.

The real solution is for everyone to pay out of pocket 100% for their health care. Now I know the thought of this scares a lot of people. The reason it's so scary is because health care costs are through the roof and most people can't afford health care at current rates, ourselves included (We're not rich here at People Liking People). However, you need to understand that the reason health care costs so much is because of the third party payment system.

The third party payment system effects many factors:

1) The health care provider's real customer is no longer you, it's whoever is actually footing the bill. Their real customers are the insurance companies and the government.

2) People stop paying attention to the real cost. Most people don't know how much their doctors actually charge for visits, they don't know how much a CT scan is, and they don't know much their medication really costs. All they know is that with their insurance card, they pay their $25 co-pay and they're on their way. Nobody prices around looking for the best deal on a health product or service. Our insurance card takes care of that and we don't need to think about it.

3) As a result of people not paying for their health services, people aren't really that demanding with the quality they receive. We are not as demanding as we should be with doctors. We put up with their in-and-out 5 minute visits and we put up with them not always being the most thorough. We don't really make a big deal about it though it didn't cost us that much, oh well it was just $25.

4) Whoever foots the bill has the control. We have to go through their approval process to see whether or not we can receive a certain procedure.

People Liking People's Golden Rule: The more someone else is paying for a product or service you're receiving, the less of a say so you have in it. Also - you cannot complain about something you are receiving for free. Wheres your bargaining power? You have none. You're a liability now.

Imagine if tomorrow someone flipped a switch and all the sudden there was no health insurance. No third party payment systems. All cash out of pocket for doctors visits and procedures. What do you think would happen?

The first thing that would happen is patients would be calling their doctors offices asking what they're charging for a visit. There would be a lot of "WTF? you gotta be kidding me!" moments. For the first time people would be finding out just how much health providers have been gouging us. There would also be a lot of "Uhmm that's the best price you do? I'll have to call you back let me check around". Within a week prices would be driven down significantly by the market. If the doctors kept prices at the same high levels, appointments per day would drastically go down. Doctors would be forced to lower their prices to get demand back to what it was. All of the sudden little by little it would turn into a real competitive market, with the patient calling the shots and having the bargaining power. Doctors would be competing with each other, trying to offer the best quality at the lowest cost, and hospitals would be doing the same with the cost for procedures and tests.

And now that everyone is paying with cash, you better believe people are going to be a lot more demanding with the quality they're receiving. That's money coming right out of their pocket, they're not going to leave that office until the problem is resolved. And doctors and hospitals will work extra hard to keep customer loyalty.

If you were to have a bad experience at a restaurant and you speak to the manager and threaten to take your business elsewhere, there's a good chance they will be very apologetic and maybe even give you a meal for free. Try threatening to take your business elsewhere in a doctors office and see how quickly you get laughed out of there. They do not try hard for our business, they do not care. You're not the one paying them. When you pay for what you receive, that gives you complete control and bargaining power. It gives us the right to be demanding and creates a competitive dynamic among providers. This is how you lower costs and increase quality. Having someone else pay for it puts us completely at the whim of the payer and provider.

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