The Cost of Health Care
© 2014 Rick Adamson
By Rick Adamson 6.19.14
Cost of health care per person in 2009 was $8,233.00.[1] This is 2.5 times the average cost incurred
by 29 other free market countries.[2]
Our cost could be reduced by about half (to $4,117.00) if certain improvements
in efficiency are made resulting is a savings of $4 Trillion over ten years. See this Wall Street Journal article Searching
for the True Cost of Health Care.
Broken down further:
- VA benefit cost per person in 2020 will be $9,770.00[3]
- Medicaid cost per person in 2008 was $14,780.00[4]
- Average premium paid for individual health coverage in 2011 was $2,196.00[5]
- Average premium for Obamacare in was 2013 $3,936.00[6]
- Medicare costs per capita in 2009 was $9,702.00[7]
In order to arrive at a realistic estimation of the real
cost of healthcare we can discard the individual health coverage component
because is no longer available, thanks to Obamacare. We know that the Medicaid
component is wildly out of hand due to abuse and fraud and that the VA
component is higher than it needs to be because of inefficiency and waste. Further, we know that Medicare is ridden with
fraud and abuse and that ten percent of the beneficiaries rack up more than
$55,000.00 in annual costs vs. the average of $9,702.00.[8]
Therefore, it would appear that a reasonable average price
for a policy for a covered person should be around $4,000.00 per year. If this
could be accomplished it would save about $4 Trillion over a ten year period
I think we should explore moving our veterans, federal
employees, persons on Medicaid and Medicare and any others who wish to
participate into a market based system which uses private insurance companies (competing
nationwide) to provide policies for these individuals so that they can get the
care they need at the place of their choosing. The goal should be to provide
reasonable benefits while keeping the average cost per capita at around $4,000.00
annually.
Some would argue that a government provided “single payer”
system would be better; however, I believe that a competition based market
system is more efficient than that of a bureaucratic system. I mean, I would rather have a private company
negotiate with the providers and drug companies and pay claims than a
government bureaucrat.
We also need to reduce the cost of business for the
healthcare providers by limiting malpractice claims and, therefore, malpractice
insurance costs and encourage providers to share information and test results and encourage
billing based on costs rather than on a fee schedule. We need to aggressively look for fraud and
abuse where ever it can be found and eliminate it.
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