Uninsured medical procedure cost growth significantly less

Devon Herrick:
Americans see their doctors more than a billion times each year. Although patients collectively spend nearly $300 billion on physician care annually, they rarely discuss prices with their physicians in advance of receiving treatment. Patients don’t bother to shop for medical care, and doctors don’t advertise their prices because about 90 percent of their tabs are paid with OPM — other people’s money.

When patients do pay their own medical bills, they compare prices and look for value. Consider cosmetic surgery, one of the few areas of medicine where consumers pay out of pocket. Physicians who provide cosmetic procedures compete for patients’ business by offering low prices, convenience and other amenities they hope consumers will find appealing. As a result of this competitive behavior, the inflation-adjusted price of cosmetic medicine actually fell over the past two decades — despite a huge increase in demand and considerable innovation.

Since 1992 the price of consumer goods, as measured by the inflation rate, increased by about 64 percent, according to the Bureau of Labor Statistics. However, physicians hiked their prices by about 92 percent. Indeed, the overall price of medical care increased even more — by about 118 percent. Yet, during this same period, the price of cosmetic medicine rose only about 30 percent — less than half of the consumer price increase.

The price of cosmetic medicine was held in check by a variety of competitive forces: Doctors who perform cosmetic services also look for ways to control costs; they quote package prices, and generally adjust their fees to stay competitive. The industry is constantly developing new products and services that expand the market and compete with older services. As more cash-paying patients demand procedures, doctors rush to provide them. There are few barriers in cosmetic surgery that prevent licensed physicians from training to perform cosmetic procedures. Physicians often hire aestheticians and nurses to perform some minimally-invasive cosmetic treatments — further boosting their capacity to see more patients.
There is more.

Obamacare will only push prices up.  The way to control prices is to have health savings accounts and supplemental catastrophic health care insurance.  The problem with Democrats is they are control freaks who don't trust the market and in the process they drive up cost for everyone.


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