The Growing Cost of Health Care

Is it better to have health care rationed by a government bureaucrat or by your own inability to pay for it? If you don't think it makes any difference then you're ignoring the potential for huge cost savings for everyone. In a nationalized health care system the government controls all health care and sets the pricing. America has free-market health care so prices have no control and every step in the system is free to charge whatever the market will bear in order to maximize profits. Doctors want to make more money, hospitals want to make more money, insurance companies want to make more money and so on.

Many Americans think we have the best health care system in the world. We don't. We have the most expensive health care system. How can you believe it's the best health care when we aren't as healthy or live as long as those in other industrialized countries? Depending on which study you read we rank #33 to #38 for longevity in the world putting us behind not only every other industrialized country but even behind many so-called, second-world countries. We don't live as long and we don't live as well. In many cases it's because we put off health care because of the expense. Today we're spending 17% of our nation's total Gross Domestic Product on health care while other industrialized countries are spending 7% - 12%. This is not a small difference!

Recently I was reminded of this increasingly dire situation after going through some medical tests. The bills are still rolling in months later and even though my insurance plan pays part of it, just keeping up with my share of each bill can be challenging. It scares me to think about what a major surgery or health crisis would cost. For a growing number of people every year it means either being healthy or going bankrupt. Rationing by cost, even bankruptcy, isn't any better than the restrictions of a government-run system and due to our escalating costs it's much more likely.

Every year medical inflation rises more than regular inflation (and much more than salary increases) so it's like compound interest. It grows and grows and keeps growing out of control. Every level of our health care system wants to maximize their profits, and they do. If you look at a graph of the rise in our incomes and the rise in medical costs in the past forty years you'd be sickened by the huge and growing gap in affordability.

Think for a moment if America had enacted some type of national health care plan when Clinton was president. Can you imagine how more affordable health care would be today because we wouldn't have nearly 20 years of medical inflation compounding costs? Instead we let the TV commercials of Harry and Sally persuade us to let the health care system continue to take more and more of our money.

The question today is: What are we going to do about it? Many people complain about Obamacare but I haven't heard any suggestions that will do any better. A free-market system does not work in health care, we have plenty of research showing that from all over the country. Dallas is one of the most "competitive" markets in the country because we have so many different companies that are supposed to be competing for our health care business. Instead of lowering costs this is one of the most expensive markets in the nation. Just down the highway in Waco, Texas the Scott-White medical system enjoys a near monopoly in the market prices are lower and it has a higher performance ranking than Dallas. In the health care field competition simply means trying to charge more than the guy down the street.

So what do we do? As individuals and as a nation we're facing the prospect of health care bankrupting us. How much lower does America need to fall in the world rankings or how much more of our GDP does it need to cost before we come up with a different system? One highly respected doctor I know predicted decades ago that if America's health care costs ever reached 8% of our GDP, health care would be nationalized. Today it costs more than twice that amount and it continues to grow every day we do nothing to change it.