The Difference Between Health Care and Health Insurance

heartlandWhen you have a poorly educated population like ours articles like this are important. From the Heartland Institute:

So much of the problem with today’s rising medical expenses is due to consumers’ inability to discern the difference between these two types of costs and built-in incentives on the part of providers, pharmaceutical companies, and government bureaucrats to disguise the difference between them. Providers and pharmaceutical companies seek to raise consumption of their product – something easily done with incomprehensible bills and life in the third-party payer economy. Hospital groups just want to see more people covered, you see. Government bureaucrats seek to retain and maximize their power both to direct the marketplace at large and to direct the lives of people who presumably don’t know what’s good for them – another approach best achieved where the money is hidden from them. And they are very good at it.

Locked in a constant tug of war between these forces, insurers seek to survive through constant deal-cutting and scrimping in ways that affect the fewest people – and typically, therefore, the most in need – and are incentivized to avoid taking on sick patients, particularly the chronically ill. They target the only area where they can raise prices – on privately insured people – again and again for rate increases to offset the demands from government and providers. Thus the self-employed and small employers, lacking the size to self-insure, end up suffering the effects the most.

We can end this cycle: Either we return to a definition where health insurance means insurance, where billing is transparent and honest with employees and employers, or we choose the path to single payer and perpetual surrender to government-run health insurance – which turns out to be decent when it comes to cost, but particularly disappointing when it comes to care. But these trends are surely coincidental.

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