The cost of healthcare is insulated from the consumer because it is possible to charge insurance companies more than people without insurance for the same procedures.
Insurance companies include Medicare, and Medicare can pay a vast majority of all healthcare charges that are incurred in the US.
The high cost of healthcare is a well-known problem. Recently, costs of health insurance premiums have experienced double-digit percentage increases. In the past, small employers have had a harder time than large employers in affording health coverage for their employees, but as health coverage costs have spiraled higher and higher, many large employers are also finding it harder to provide health coverage for workers. The self-employed also struggle to find and afford health insurance.
Health Care Expenditures in the United States, 1970-2010
1970
2002
2010
(Projected)
Total Health Care Spending per Capita (2002 Dollars)
$1313
$5449
$9216
Total Health Care Spending as a % of GDP
7.0%
14.9%
16.8%
Another factor that has caused healthcare costs to increase is that the consumer is insulated from the true cost because third parties pay most of the healthcare expenses. In 1960, individuals paid about 50% of total health care costs. Now, third-party payers, including the government, private insurers and employers, pay about 80% of total healthcare costs.
Many experts believe that because consumers do not pay for the care themselves, they are more likely to receive unnecessary care, not shop around for the best cost, and are unlikely to question costs. Because the consumers are not paying the expenses directly, they tend to demand healthcare services that might not have been demanded if the consumer were paying more of the cost themselves.
This leads to higher costs for healthcare as a whole, especially for those who can just bill uncle sam for a unGodly amount, therefore screwing the government plans out of the principle that they have invested to get a return or at least interest on.
This is why we will turn towards HSA and MSA with HDHPs instead of a standardized healthcare, there will still be room for doctors to make their money, but hospital groups as a whole will take the brunt of the hit. They simply won't be able to charge what they charge now so Medicare won't have to pay it. Since money paid out of an HSA for anything other than a qualifying condition is taxed an extra 10% on top of regular income, the government would stand to make more money off of this than a national healthcare, and believe me, they will get theirs.

 

It's because people are disconnected from their health care decisions that I believe that we should all have health care savings accounts. A savings account for the express purpose of paying for health related expenses.

If we open an account while we're young and don't need a lot of medical care, in time the savings would become substancial. I would like to see it set up just like a savings account, through a bank. They can use some of our money and we can earn dividens. It doesn't even have to be a high yeild because it's time that will build the savings.

In addition to the health care savings account, we would also carry health insurance. The more that we saved in the health care savings account, the less coverage that we'de need to carry. If we lived a healthy life style we could just about eliminate the need to carry health insurance.

We would have to be responsible for making sure that we take care of the routine medical stuff. We'd pay for thoes things with the money that we've saved, not through insurance. If we did that then we would want to know exactly what things cost and why. It would connect us with our health care decisions. We'd have to pay more attention to what we are beng told and doctors would have to be prepaired to explain what they are doing and why they are doing it.

If people paid for their own routine medical expenses, they might be more inclined to live a healthier lifestyle. If they didn't they would use up their health care savings account and have to buy more insurance coverage.

The plan that we currently have, have had and will likely have soon all disconnect the people from their health care decisions. These new proposals further disconnect the people from their health care decisions.

For the uninsured and underinsured, it would not be easy. The ideal situation would be for them to also have a health care savings account. The federal government may need to use our money to give to the states to spend on these people. It souldn't be some endless amount of money though. States should be allotted a certian amount, probably based on population, and be required to use that amount wisely. If the states do not use the allotted money wisely then they would have to get the money from somewhere else in their budget. They would have to tighten the purse straps and be more efficient. If the people that can help themselves don't, it shouldn't be a walk in the park to get health care. They should have to work for it. For the people who can't help themselves, thoes controlling the money for them would have to report to the tax payers how that money has been spent so that the amount could be adjusted, up or down, as the state sees fit.

As long as people remain disconnected from their health care decisions, the inefficientcies will exsist. Inviting millions more into a system that doesn't work isn't going to make it work any better. Changing the system to one that fruther and further disconnects the people from their health care decisions is certianly not going to make things work any better.

 

Well said, and that's what is intended. The only deal is that you have to have an HSA to qualify for an HDHP. These have substantially smaller monthly premiums and have a huge deductable (usually 1k or 1.5k) and you are allowed to contribute the amount equal to your deductable every year.
If someone started young and didn't have to use it for a few years, they would be in very good shape in the future. As it stands, when you qualify for Medicare, you get your HSA savings back without the 10% penalty that you would pay when you use it for anything other than a qualified health expense, so it also kinds of serves as a retirement fund if you don't use it all.
MSAs are similar but they focus a ton more on prevention than treatment, so that may be the route to head towards in the future, except that they don't always pay for things that are needed because they pay for preventative treatments. A nice reworking of the two and an HSA set up through a government account where they split the interest with you that is automatically cut along with your FICA for contributions would be a good compromise for everyone after they set limits to cost of procedures. Those limitations are key.