Friday, January 16, 2009

Letter to Representative Melissa Bean

Dear Representative Bean,

I hope you are sincere in your desire to improve health care in this country. I also hope that your ideology doesn't prevent you from looking at the issue from multiple angles. I ask you for specific measures as to how to reduce costs and how to reduce the ranks of the uninsured. I was one of those who was uninsured and I happened to have an accident which required an emergency room visit and surgery. The total billed to me was approximately $28,000 of which I paid about $11,000 to settle with everyone. I believe that one of the reasons the bills were so high is due to lack of a competitive marketplace for health care. When I asked about the costs, no one was able to provide me with any information. This seemed to be a result of the mentality that costs don't matter and that insurance would pay for it. To me, this is one of the primary reasons that we have such outrageous health care costs. If there is no incentive to conserve on cost, then we all ask for the most health care possible. This explains why the doctors and hospitals that I dealt with weren't even able to quote costs for the service they delivered: They aren't set up to do so! I was fortunate in that I was able to receive quality and timely care. My hope is that you will consider freeing up the private market in order to unleash its power. Simply put, if we are aware of the price of care we receive, we would conserve the care we request. Additionally we need to create a distinction between "insurance" and pre-paid health care. Currently we lump both under the name of insurance but they are very separate things. Insurance is for unexpected events which would devastate an individual but are unlikely to occur. Hence the reason we pool our miniscule individual risks with others. An insurance company, who is risk neutral, charges us a small premium above the expected payout and we get peace of mind and they eke out a living. Pre-paid care is like paying for a doctors visit in advance. You are building up a cash reserve and drawing upon that with each visit to the doctor. This type of plan cannot be correctly termed insurance. These are costs that are known or are not large enough to justify the pooling of the risk. One thing you could do to help would be to help define this separation and enact legislation which dealt with the issues separately. This makes massive economic sense and would go a long way to actually solving the problem. One way to separate these distinct issues would be to allow people to purchase a myriad of insurance options, some of which allow for the individual to only choose catastrophic coverage. This in effect allows an individual to opt out of the current pre-paid plan system which discourages conservation and cost consciousness. There are many more issues and I would love to help with my insights but I will end with one last point. For those who do not possess insurance or for those where the cost of routine care would be very high (perhaps out of reach) then by all means give them taxpayer money to help. This assistance however does not require the elimination of proven market based principles. They are not antagonistic but complementary.

Thank you for your hard work and open-mindedness


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