Scott Rasmussen's Number of the Day for April 6, 2017
The Number of the Day columns published on Ballotpedia reflect the views of the author.
April 6, 2017: Only 11 percent of healthcare spending in the United States is controlled by patients. The remaining 89 percent is controlled by government and insurance company bureaucrats, along with companies that provide insurance for their employees. Since these third parties control the spending, they also end up controlling what sort of treatments patients are allowed to receive.
Patients and everyday Americans have been losing control of healthcare decision-making for decades. In 1960, patients controlled 48 percent of all healthcare spending in the United States. That fell to under 25 percent in the 1980s and to 11 percent today.
A study just released by the Mercatus Center calls the loss of patient control the “unindicted conspirator” in driving up healthcare costs.[1]
Not surprisingly, putting the bureaucrats in charge leads to worse service and higher costs. One study published by the Institute of Medicine estimated that $210 billion was wasted by unnecessary services (e.g., too many surgeries) and another $190 billion was taken by excessive administrative costs. Inefficiency and duplicate testing added $130 billion, and too-high prices added $105 billion. Finally, $55 billion was wasted by failure to take preventative steps.[2]
And these costs don’t even begin to include the high costs imposed on the rest of society by the inefficiency of the healthcare system. A recent Number of the Day showed that the average doctor visit requires a patient to spend 101 minutes in the waiting room and travel time. Surely, it is not unreasonable to want a healthcare system that better respects the time of the people it is supposed to serve.
Hints of what a better system might look like are already becoming visible. Video doctor visits generally cost less than the copay requirements for an office visit. And, rather than waiting an average of 18.4 days to see a doctor, telemedicine consultations are available within minutes on a 24/7 basis.
Imagine that—lower cost, immediate appointments, and no time in the waiting room!
The key to tapping into the benefits of this and other technological advances is to put everyday Americans back in charge of healthcare spending. Medical decisions should be made by patients in consultation with their doctor, not by insurance company and government bureaucrats.
From a public policy point of view, there are two simple steps that could move things in the right direction. The first is to take away the power of the bureaucrats to decide how much health insurance each person must buy. Let people decide for themselves.
Unfortunately, insurance companies are prohibited from selling many types of insurance coverage that people want to buy.
Some people might want to buy only catastrophic care coverage. They would pay for routine out-of-pocket costs themselves, but they would be fully covered if they were in an accident or struck with a sudden illness. Despite the very low premiums, few Americans would be comfortable with this bare-bones approach. However, even fewer Americans would be likely to buy the amounts of coverage mandated by Obamacare. Regardless of what they decide, however, the important thing is that everyone could decide for themselves.
The second step was described in my 2012 book The People’s Money. Employees should be free to opt out of any insurance coverage offered by their employer. Whatever savings are realized would be given to the employee as additional income. Rather than having decisions made for them by corporate human resource officers, each employee could decide for themselves the appropriate trade-off between salary and insurance coverage.
These two steps would take the control of healthcare decision-making away from government and insurance company bureaucrats. It would put the decision-making where it belongs: in the hands of patients and their doctors.
As the share of healthcare spending controlled by everyday Americans goes up, the waste and inefficiency of the healthcare system will go down. As costs go down, quality and customer service will improve. The good news is that with individuals controlling only 11 percent of healthcare spending today, there’s a lot of room for improvement.
- Yesterday's number highlighted the 37 failed presidential nominations to the Supreme Court.
- Tuesday's number noted the 44th anniversary of the opening of the Twin Towers at the World Trade Center.
- Monday’s number looked at the 283,996 federal regulatory employees and how the number of such positions has increased over the past several decades.
- Last Friday’s number looked at the 31 Pivot Counties in Iowa. These are the counties that voted twice for President Obama and then voted for Donald Trump. There are more Pivot Counties in Iowa than anywhere else in the nation.
- To see other recent numbers, check out the archive.
Scott Rasmussen’s Number of the Day is published by Ballotpedia weekdays at 8:00 a.m. Eastern. Click here to check out the latest update.
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Columns published on Ballotpedia reflect the views of the author.
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