In the past decades, the amount patient’s pay for medical care has steadily decreased while government spending has increased to the point that it now “accounts for almost half of all health care spending.” Forbes author John Goodman lists 8 important effects of this trend.
1. Since patients pay less, they are more likely over-consume cheap care.
2. Because patients pay less out-of-pocket, “No doctor and no patient ever really see a real price for anything.”
3. As a result of a lack of real prices, doctors and patients “have no incentive to minimize the cost their actions create for the system as a whole.”
4. Doctors aren’t competing on price or quality.
5. Having a third party involved who is in charge of payment makes it so “doctors increasingly become the agents of the third parties rather than agents of their patients.”
6. Instead of incentivizing doctors to lower costs, the “economic incentive for the provider is to maximize against insurer payment formulas.”
7. On the other side of the equation, it is in the insurer’s interest to discourage the doctor from ordering tests and procedures, without thinking of what is best for the patient.
8. The “the government’s role in health care has become so large that its procedures are dominating the entire market.”
Summary by MedicalGroups.com
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