Hospital Costs

Cost shifting has caused hospital costs to quadruple.  It started in the 1980s when States closed their mental hospitals and counties closed their hospitals and clinics. Then private hospitals were forced to take patients who couldn’t pay their hospital bills.  Hospitals simply shifted the cost of free care to paying patients, including illegal immigrants and welfare refugees. To lower hospital bills, this cost shifting scam needs to be reversed.  Health insurance is now unaffordable because of predatory hospital and Pharma costs.

 

The quadrupling of hospital costs began with the passage of Medicare and Medicaid In 1965, when a good family income was $10,000 per year. Up to that time, mainstream hospitals were owned by churches and charities. The daily room and board rate was $24 per day. Insurance coverage was $300 a year for a family.  It was “major medical” and required medical necessity to rescue and repair patients.  There were few specialties and less expensive test equipment. Patients who couldn’t pay for their treatment at mainstream hospitals went to county hospitals and clinics.  Many Physicians had charity practices. Private hospitals had “fundraising” to subsidize hospital expansion and operations to keep costs affordable. We need to return to that model.

 

Hospital and Pharma costs will not begin to retract until these industry gets the message that government is ready to reduce subsidies and disallow price gouging.  Healthcare providers have no incentive to reduce costs like other industries, because the government has been cowed into subsidizing their poorly managed operations. In the 1990s, the cost of a personal computer and large flat screen TV was $5000.  Now these cost $500.  Other industries have been able to reduce their costs, but healthcare has not.

 

Patients need to pay for their own healthcare in order to return healthcare to free market pricing. There are lots of ways to accomplish this.  It requires options like medical tourism where patients fly to other countries to get a lower price for serious medical treatment.  It also requires that we allow hospitals to require patients to pay their own bills and offer no-interest loans they should be able to secure and pay off. Patients need the incentive to shop for cheaper treatments or this will never get fixed.

 

Socialized medicine has failed in the US and needs to be abandoned as a national program.  Cities and counties may want to continue or resume subsidizing indigent care in county hospitals and clinics, but federal subsidies need to be rolled back.

 

Norb Leahy, Dunwoody GA Tea Party Leader