Furthermore, imagine if cash-transactions became the norm in the drug industry. The costs for new name-brand drugs are often astronomical if you pay out of pocket, but that same drug can be bought for a $40 copay if you have a group insurance plan. This dichotomy exists because insurance companies are able to bargain with the pharmacy for a “negotiated rate” for drugs. This gives them a steep discount inaccessible to the average cash-paying consumer. If everyone was paying cash for most of their medicines, the costs to the uninsured would drop significantly. Drug companies would have to overhaul their way of doing business if this cash system took hold. Drug prices may go up a bit for the insured, but the uninsured or underinsured could afford to buy drugs with cash.
If cash transactions can again become the basis for most health care purchases, we will see prices drop dramatically. The decreased paperwork and rates game-playing alone will massively reduce costs, and the pricing transparency will open the doors for much-needed competition among pharmaceutical companies.
In addition to these changes by insurers, government must also shift to doing its real job. Stop setting up exchanges and regulating what basic services must be included in a health care plan. Instead, allow the new cash-transaction era to do its work and focus on the things you should be worrying about: theft and abuse. Punish companies for price collusion or post-claims underwriting. Hit hospitals for medical errors that lead to complications and repeat visits. Focusing on actual injustices will give government plenty to do while also reducing costs and improving our collective health.
So how do we really reform health care? These reforms can, to some extent, be aided or recommended by the government, but ultimately government action is not the answer. Change will take the collaborative effort of consumers, hospitals, doctors, churches, charities, drug companies and insurers to enact lasting reforms. Consumers need to be more informed – they must demand answers, transparency, and, above all, options and clear pricing. Doctors, laboratories, and hospitals need to incentivize cash transactions – offering much better rates and openly encouraging patients to get away from their constant reliance on insurance. Churches and charities need to work to provide support and options for those who genuinely cannot pay their bills. Insurers and drug companies need to wake up to the unsustainable nature of our current system and adjust their business models.
Unfortunately, America has currently decided that it wants government to fix the problem. It won’t, because it can’t force these kinds of reforms through. And why would politicians want to? Politicians are receiving all manner of contributions and pressure from many, many different players in our complex health care and health insurance industries. These players have the money and influence to get what they want from our elected officials. Who will eat the costs if we rely on government? Uninformed consumers and unrepresented local doctors. We must act now or dread the future.