Friday, March 5, 2010

Medical Costs- Are We Overinsured?

Monty and I went to the health department the other day looking for shots immunizing against various diseases we might contract on an upcoming trip. The lady at the desk advised me that my insurance and Medicare probably will not cover the costs. There was a prominently displayed sign on the wall of the nurse practitioner showing the exact cost of each and every shot that was available. We were asked whether we wanted to take a typhoid booster shot. She said that there was some typhoid threat in the jungles of the country we plan to visit, but that if we stay in the city the chance of contracting typhoid are very small. I saw that the shot would cost about $100.00. I considered whether immunizing against an extremely low risk of contracting typhoid fever was worth $100.. And decided not to take it. Would I have taken the shot had it been covered by insurance? Probably. After all there was some risk, and it would cost me nothing.

This story underlines the fact that our own over consumption of medical service is skewed because most of us are over insured. Doctors quickly cite the malpractice threat as a cause of over treatment, which has some merit. Who is complaining that our decisions to acquire medical service are unrestrained by any economic considerations. We are on a treadmill. We utilize more tests, more discretionary treatment because the insurance company will pay for it. The insurance company turns around and increases the premium to cover the costs, and we complain. Put on your glasses. You will see the enemy and the enemy is us.

Nowhere is the overuse of medical services more prevalent than when end of life decisions are faced.. Whenever our loved one dies of a long illnesses we tend to want to be sure that we have done everything we can to save her. That approach is certainly proper and laudable. However, when the decision is made on house money, too many of us keep searching for a miracle and prolong life that would have terminated earlier had not medical science devised means to sustain people who are terminal. The Democratic solution to the end of life dilemma is to have a bureaucrat make the decision taking the family and the doctor out of the equation.

Obama promises that the health plan will not increase the deficit. He is relying in part on a belief that the younger population will pay more in premiums that they will receive in benefits. That is to say, the insurance companies will overcharge the younger population to underwrite the older people who are sicker on the average. I do not know he has made his calculations.

I do know to a point of moral certainty that the additional thirty million persons receive coverage will increase their use of medical services. We already have a severe shortage of medical personnel. Has anyone addressed how we will cope with ever greater demands on a severely stretched health system?

My next blog which will most likely be posted next Tuesday to discuss tort reform. Then, in a following posting, I will discuss the elements of what I would consider to be an effective reform of the system.

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