A Simple Reform

Most people agree that there is a great deal wrong with the way people purchase and pay for health care in the United States.  There is one thing in particular that strikes me as grossly unfair and even idiotic that is rarely mentioned. I will illustrate with an actual example from a real patient – me.  In conjunction with my annual physical, I had blood drawn and a number of laboratory tests performed.  The amount billed for the tests by the lab was  four hundred fifteen dollars and change.  My health insurance is administered by Blue Cross of Texas. Blue Cross calculated the tests were worth forty four dollars and eighty two cents. The laboratory company accepted this as always. My insurance paid a shade under thirty six of it, and I was on the hook for eight dollars and ninety five cents.

There are several points to make here. The first is that the lab did not lose money on the forty four eighty two. The second is that my real savings were not so much  in what my insurance paid as in the rate structure it had obtained from laboratories.  The third is that there are poor suckers out  there without insurance who get  real bills, not phony ones as I did, for the whole four hundred and fifteen. This strikes me as wrong.  I understand that large groups have purchasing power and that the rate charged  a single person might well be somewhat larger than that charged a member of a large purchasing group. I do not understand a factor of almost ten.

This is not a particularly unusual example as people can tell by looking at their own statements. In office procedures and other things often show similar differences. Cheap catastrophic insurance with high deductibles could  solve many of the problems of the many of the uninsured, but not this one.  It is not that the labs or any other providers of services are necessarily villains in this.  There may be rules or perverse incentives that have led to these practices. However things needs to be fixed, and fixing them does not seem that difficult.  There should be a way for people with no or only catastrophic insurance to participate in some sort of group that negotiates cheaper rates for them just as Blue Cross does for those it represents. That would be a reform worth considering after Obamacare is gone.