Unfortunately, roughly 20 percent of the people in the health care system incur 80 percent of the overall costs. Interestingly enough though, health insurance premiums really DO pay for the actual health care services. In fact, the figure is about 80 percent. What that means statistically is, 20 percent of the people who have the most health care costs use up about 80 percent of the amount on health services.
In that 80 percent yearly there are roughly 14 percent who could be Mr. Miss or Mrs. Average American and have a broken arm, a baby or gall bladder surgery. The costs of those procedures put those people into the 20 percent bracket. That’s what premiums are for, to protect people when they are in that 20 percent area.
Health care costs are so high mainly due to the lack of competition in the health insurance market. This is the result of a few large insurance companies who are able to control the market because of how doctors and hospitals charge for services. Trying to find out how much it costs to have a baby is impossible, no matter how often the question is asked of a doctor or a hospital. This means that people can’t compare quality and cost to buy health services since they have no idea how much they’re paying for anything.
It’s not hard to set a price for services, as doctors have to do it all the time for the big insurance carriers. There isn’t one doctor in the US who doesn’t set fees for case rates and per diems etc. The only way to fix the mess the health care system is in is for doctors to stop bleeding consumers to make up for the low fees given to big health insurance companies.
Doctor and hospital bills are really fictitious numbers unless there is no health insurance in place for the patient, or are not the major carrier with the good discounts. In some markets these fees are up to 5 times more than what doctors accept from the major insurance company in your area.
This kind of activity prevents all health insurance companies from competing and makes premiums higher than they have to be. If everyone paid the same amount for health care services, health insurance premiums would drop dramatically. Medical inflation is another bugaboo in the system, meaning doctors and hospitals keep charging more for the same services, and the rate they’re charging has been as high as 150 percent of the overall inflation rate.
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