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Plaster of Paris

November 6, 2010
 by Alberto Arredondo

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So called health care inflation plagues us and brings the public to give the government the power to "fix" the problem. Now with the Republicans in power, no doubt Obamacare will continue, though in some altered form. Are health care costs really skyrocketing?



A recent guest of the Libertarian Solution radio program mentioned high-tech medical care as a reason for rising costs of medical care. He was trying to explain why Arizona's initiative to allow citizens of the state to opt out of Obamacare was a bad thing. After all, wouldn't you want to pay less for the same thing? He insisted that if anyone opted out of the health insurance commune, society would suffer. Let's take a look at the high-tech angle.

No where have I seen a study of costs of a medical care product versus time (at least not for the lay person). Most people imagine that care for a broken leg is the same today as it was in the past. If that care were indeed the same we'd account only for a doctor's time, let's say 15 minutes to set the leg (assuming a simple break), half an hour for an assistant's time to plaster the leg, an hour for an exam room, a few yards of bandage, and a small bucket of plaster. Have doctors' fees and assistants' fees increased significantly beyond inflation over time? Has rent for exam rooms skyrocketed? What about bandages and plaster? What's different today? Skilled people, rent, and basic supplies haven't unexpectedly risen in price except for a few factors that could explain the problem. The first factor is that the imaging systems are more sophisticated. In the old days there were no imaging systems. A doctor would have felt his way around the fracture. Then there was x-ray, CAT scans, MRIs etc. What does each system do other than raise the capital cost of a doctor's practice? They reduce risk. Is that worth more to you? No? Have you asked for examination-by-feel lately? You could, and that would likely reduce the cost of your visit.

The doctor and his or her technicians may have more sophisticated knowledge than they had before if only in knowing when to call for a high-tech scan and how to operate the equipment. But I have little doubt that their cost has gone up due to a second factor—administrative overhead mandated by government regulations spilling over into the relationship between doctor, patient, and insurance company. What can the government do to lower the cost of the setting of a broken leg? Certainly for a certain market segment there would be demand for doctors willing to practice simpler medicine without the meddling of a government-insurance company alliance. Why won't they allow that? Why couldn't the citizens of a state confer upon themselves the right to go to such doctors?

There are numerous reasons explaining the rising costs of medical care though few likely have to do with the greed of plaster suppliers and the like. Meddling and increased sophistication of care likely explain nearly all the rise above inflation that people are so up in arms about. The press won't perform basic research to see how identical medical care products from various eras have or haven't risen in price with respect to inflation. Without this the public is left in the dark about government solutions and undoubtedly less costly, less intrusive alternative solutions. We need to tease out what is different about today's care in order to make intelligent comparisons. Without this, we'll no doubt find ourselves receiving letters from the IRS admonishing extravagant use of basic medical supplies.



Related Content:

Obama's Health Care Plan will Result in Rationing - Jim Iannuzo
The Healthcare System is Ill and the Facts Will Make You Sick - Alberto Arredondo
New Obamacare Lawsuit Challenges IPAB - Jim Iannuzo


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