Healthcare's Hidden Costs
“For years Dr. Linda Halderman operated a general surgery practice in California’s San Joaquin Valley, where she treated patients ranging from those with serious, life-threatening conditions to those seeking elective, cosmetic treatments. In a recent piece in Investors Business Daily, Halderman recounted the story of a woman patient who had not had a mammogram in several years even though her family had a long history of breast cancer. “But I don’t have insurance,” the woman told Halderman when the doctor asked why she had neglected to get a test that costs $90. Yet the woman was in Halderman’s office for $400 Botox treatments that she was paying for.”
So begins Steven Malanga’s new essay, which can be read here. (Full disclosure: he is not only a senior fellow at a think tank I work for, but one of my favorite writers on economic issues.)
Mr. Malanga writes at some length about the discrepancy between the healthcare that we are willing to pay for and the healthcare that Americans want. Dr. Halderman’s story perfectly illustrates the point.
Having trained and practiced in another country with a “free” healthcare system, I have my own recollections: the patient who had thousands of dollars of work-up for a stress headache but took the subway to the hospital to avoid the $20 parking fee, the patient who refused to pay a token practice fee for her family doc (to cover prescription refills and the like) but insisted on every problem being investigated by a specialist or sub-specialist, etc.
Mr. Malanga’s observation is good, one that isn’t given much thought in the all too glib rhetoric coming out of Washington these days. Listening to Democrats, it would seem that all things wrong with American healthcare could be resolved with the creation of a few committees and a new entitlement or two. Republicans – who have been more right than wrong in this debate – focus increasingly on sound-bite politics, hitting on tort reform, rather than something more meaningful (let’s be honest, my friends, health-insurance premiums didn’t double since 2000 because the trial lawyers are suing Merck over Vioxx).
Americans today pay just 13 cents directly for every health dollar spent. It’s one reason that health costs continue to rise, but the value doesn’t necessarily increase. We are, after all, always ready to spend – spend, that is, someone else’s money.
Until that core economic problem is addressed, health costs are likely to continue to rise, albeit drawing more heavily from the treasury in the future if the Democrats succeed this year in passing legislation.