Americans spend more on medical care as a percentage of GDP than any other country. For the decade ending in 2020, insurance premiums rose 47% and deductibles jumped nearly 69%. Even with employer medical insurance benefits, employees now on average pay nearly $6,000 compared to their employer’s average of $22,221 for family coverage.
Moreover, obtaining medical care has not only become more expensive, but also increasingly complicated and difficult to navigate.
Consider this: Every year, Americans of all ages, incomes, and education levels buy millions of new and used cars without a shred of knowledge of all the intricacies of engines, transmissions, and all the software that powers them. motor vehicles. Yet even without this knowledge, the American people transparently purchase hundreds of billions of dollars worth of motor vehicles each year, as the public can search online for expert opinions from Consumer Reports, Edmunds and Kelly. Blue Book, in order to make informed choices.
But when it comes to medical care, medical/health care experts tell us that there are “asymmetries” in the medical industry and therefore the public cannot make an informed decision. In other words, the public does not have the same information as doctors and hospitals. This lack of transparency in the purchase of medical care and the reliance of employees on employer insurance to pay the bills further alienates them from the true costs.
The way we pay for our medical services violates a fundamental economic principle — namely, in a market transaction between a willing buyer (in this case a patient) and the supplier (a doctor or a hospital), transparency allows the buyer to judge the value of the service rendered or goods purchased.
The good news for employers and employees alike is that America is moving toward the “consumption” of medical care. With exorbitant costs, employers voted with their money to withdraw from the traditional medical insurance market.
Fortunately, promising alternatives to traditional medical insurance have emerged. Here are some examples:
- Restore the doctor-patient relationship.
Physicians are increasingly frustrated with the role insurance companies play in approving the procedures and medications they prescribe for their patients. After all, the physician has had individual contact with the patient and has the expertise to judge what is needed; the insurance company representative has neither. Efforts are underway, such as Direct Primary Care and Concierge Medicine, in which patients pay a flat monthly fee for same-day or next-day access to a doctor, eliminating the insurance middleman from the equation. Specialized treatments are referred to other physicians and surgeries are performed at an outpatient center or hospital.
- Transparent pricing.
The Free Market Medical Association (FMMA) is at the forefront of the medical care revolution. Founded by Jay Kempton, owner of The Kempton Group Administrators, and Dr. Keith Smith, medical director of the Surgery Center of Oklahoma (SCO), the association has reduced the cost of medical care, while exposing the gross overburdening of hospitals and traditional medical practices. . Tired of butting heads with hospital administrators, Drs. Smith and Steve Lantier established a cash-only clinic and brought other surgeons into the fold who wanted to practice medicine without interference from insurance companies or bureaucrats. An uninsured patient who needed a breast lump removed was quoted $19,000 by a hospital, ten times more than the price charged to the SCO. The group proves that a more market-driven environment delivers efficient, value-driven medical care.
With medical care inflation and the resulting skyrocketing cost of medical insurance premiums, more and more employers cut insurance companies into self-insurance. In the largest American companies, 82% of employeesare fully or partially covered by self-insured plans. A self-insured group plan allows employers to customize employee insurance coverage. Depending on a company’s demographics and culture, a self-funded plan might include benefits your employees would like to see covered, such as dental, vision, prescription drugs, and chiropractic or acupuncture treatment.
By exploring the options now available through medical contractors, employers can reduce medical insurance costs and put money in their employees’ pockets – an attractive perk in today’s tight job market – without having to skimp on medical care.
Written by Murray Sabrin.
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