b'Associate Member News Wordwww.wmimutual.comIf Insurance Companies PAID for LASIK Eye Surgery. It Would Cost a Whole Lot More!continuedlate the consumer from any financial consequencesSowhat does this all mean? I guess I would of his or her health care decisions and they allowsay it means the American healthcare system has (indeed encourage) providers to bill with impunity! evolved into the worst of all healthcare models, and As an example of the perverse effect of governmentfor a whole slew of reasons, we pay the most of mandates that shield the insured from any financialany country for health care but our outcomes are in responsibility, Ill share something I witnessed inthe middle of the pack of all developed countries. the State of Washington immediately after Obam- Despite the inelasticity of health care, we have acare became effective and insurance companiesimplemented virtually no price controls on medical were forced to pay the entire cost of routine colo- procedures or prescription drugs (which in some noscopies. Within one month, a certain providerinstances have skyrocketed to $3+ million for one practice in the Tri-Cities area began charging moreround of treatment); we have derailed the most than $6,000 for routine colonoscopies (which, atbasic economic principle of supply and demand the time, only cost about $1,200). It doesnt take awhich would otherwise help keep costs in check mathematician to see how these types of abusive(like with LASIK eye surgery); we have divorced and unethical billing practices raise insurance pre- the consumer from the cost of the care so there is miums for everyone; and it is why, for the sake ofvery little disincentive for healthcare providers and controlling medical costs and insurance premiums,drug manufacturers to refrain from raising prices; it is critical that insureds as the ultimate consumersand we have insulated the insured (i.e., the ultimate of medical care have skin in the game to incentiv- consumer of the medical care) from the majority ize them to push back against unscrupulous pro- of the insurance premium expense by inducing vider billing practices. It is also why, I would argue,employers to offer insurance coverage in exchange that providers and drug manufacturers should befor preferential tax treatment. In short, weve made limited in what they can charge for inelastic medi- one hell of a mess!cally necessary health care and prescription drugs. I believe health care is a most basic and essential Medical care (including prescription drugs) is anhuman need and one that should be ensured by a inelastic good/service because it is essentially im- government for its citizenry. Sadly, our impotent mune from basic economic pricing principles. In aCongress and our inept government have failed us normal supply/demand relationship (i.e., an elasticand there is no meaningful improvement in sight. If relationship), demand goes down as the price of aI were a bettin man (and I am), I would bet that we good or service goes up. In contrast, with inelasticAmericans are going to continue paying far more goods and services like medically necessary healthfor our health care than those in other countries for care, a consumers buying habits remain basicallymany years to come, yet despite these much higher unchanged even when price goes up because if acosts, were going to continue getting a significantly person truly needs the medical care, that person islower quality of health care than we deserve or going to pay any amount possible rather than sufferthan what we pay for. Perhaps (and hopefully) our medical complications or death. When a third-partyhealthcare system will one day undergo a far more (e.g., an insurance company) is paying the majoritydrastic, effective and meaningful change than the of the cost of the care, the elasticity of increases inmisnomered Affordable Care Act (Obamacare).If you have questionsprice is even further muted because the consumerAlas, until that time, I expect were going to endureabout Medicare and only feels a small portion of the overall financialhigher costs than we should and more mediocreMedigap policies or pinch through their deductible and coinsurancehealth outcomes than we deserve. would like a free copy of share. This phenomenon is worsened when anthe federal governments employer shoulders the bulk of the premium costsMedicare handbook, and the insured consumer (i.e., the patient) alsoplease visit our website becomes insulated from the financing mechanism ofat wmimedigap.com rising health care costs! or contact our office at (801) 263-8000 .S56 www.wpma.com / Summer 2024'