The fundamental issue with the U.S. healthcare system is healthcare costs, not insurance coverage. The current healthcare payment model by insurance companies and Medicare has encouraged inefficiencies at every stage, resulting in higher costs. Just like paying for flood car or home insurance, we should pay for routine medical needs from our pocket. This will bring market forces and open competition to bear—and reduce healthcare costs significantly. This is how the market has impacted Lasik surgeries, contact lenses, and virtually every other service and product that we require daily.
There are two primary factors responsible for the healthcare system’s current repudiation of capitalist principles:
- The first factor is the fee-for-service model, which requires patients to pay for services regardless of the quality or value of care. This can be compared to taking your car to get fixed and being charged whether or not it actually is repaired.
- The second factor is the third-party payer model (not to be confused with the third political party discussed in this book), fostered by the impact of government programs such as Medicare, as well as by the role of the insurance industry. The inherent problem with this model is that healthcare prices can easily be manipulated for one simple reason— consumers are not used to checking the costs because they are not writing the checks. Putting it another way, consumers lack the incentive to demand accountability because they aren’t personally invested in paying that bill.