Austin Frakt on US Healthcare Reform

http://fivebooks.com/interviews/austin-frakt-on-us-healthcare-reform

There are many reasons why US health spending is so high – and why we allow it to be high. One of the main lines of Paul Starr’s book The Social Transformation of American Medicine is that physicians have, over many decades, amassed considerable power over the policies that have been enacted, and they’ve shaped them to their benefit economically. So a lot of money flows to healthcare providers, physicians and hospitals, and also to suppliers of drugs and medical equipment. Those organisations are relatively powerful and they’ve been able to keep it going.

Also, Americans mostly don’t see the prices. Because of insurance, they don’t directly feel how expensive it is when they enter the system in any way – whether it’s a visit to a physician or a visit to a hospital. Worse than that, they mostly don’t even see the price of insurance directly. The vast majority of Americans have employer-based health insurance and much of the premium is paid by the employer. It doesn’t show up on their pay stub, and it doesn’t appear, to them, to come out of their own pocket – even though actually it does, through lower wages. When you think you’re getting something for free or pretty cheaply – whether it’s the insurance or the healthcare itself – you’re not that motivated to shake things up.

That’s for people who work. Then for retirees, almost all of them are on Medicare, so they’re getting considerable benefit through a public programme. They don’t see why that should change either. So things just keep marching along. We haven’t been able to put in place sustainable cost controls, either publicly or privately, largely because it’s politically difficult to do that.