- monopolistic practices
- collusion among the major players (e.g., insurers, labs, Big Pharma, politicians, doctors)
- ignored violations of the Sherman, Clayton, and Robinson-Patman Acts (15 USC)
- ignored violations of state consumer protection laws
- absence of market forces
Eliminate those problems, and you’d cut the cost of healthcare by 80%, the point at which you would need only catastrophic health insurance coverage, if at all. We’d have enough money left over to stop our federal deficit spending and eventually retire the entire federal debt. According to Karl.
What are examples of an absence of market forces?
- Have you ever seen health insurance companies or hospitals compete on the basis of cost? Doctors rarely do it, either (and only when insurance isn’t involved).
- Have you ever tried to get a firm estimate on the total cost of a proposed procedure before you have it done? Good luck with that.
- The consumer of healthcare services usually isn’t the one paying for it. Your insurance company or the government (e.g., Medicare) is paying. You’ll get no thanks for your time spent shopping around for the best deal.
- Scorpion antivenom costs $100 in Mexico, but if you get it in an emergency department in the U.S., you’ll be billed $40,000 for it. And don’t think you can go to Mexico and stock up then sell it to emergency departments for $150—that’s illegal.
Karl sings the praises of the Surgical Center of Oklahoma. They post their prices up front, work on a mostly cash basis, and eliminate the bill-padding and wasteful bureaucracy of other facilities. Their prices are a fifth of what others charge.
One possible fly in Karl’s ointment is that insurers are exempt from federal antitrust laws per 1945’s McCarran-Ferguson Act. Only a handful of industries are exempt. Karl doesn’t mention that. Nor does he talk about the cost of medical malpractice insurance and defensive medicine, wherein doctors order excessive testing to protect themselves from lawsuits.
I appreciate Karls’ efforts. He’s a smart guy with many good ideas.