They evolved from a reasonable idea into a monster that just drains our system and do not provide enough value to justify their existence in my opinion.
So health insurance remains an enormous untaxed income benefit, one that grows in importance as health care costs spiral up. As a wise person once said; If you want more of something, subsidize it. Thus our present health insurance regime.
I can't remember where I heard it, but IIRC employer-sponsored health benefits had to do with a fringe benefit that employers could give to attract employees during a national wage freeze (perhaps WW2).
I just found this timeline[1] that confirms my broken memory (@see 1943).
[1] https://www.ebri.org/publications/facts/index.cfm?fa=0302fac...
I come from a large family (8 kids). When by mom was still alive, I asked her if making medical claims was a pain. Nope, she said: tell your information to the doctor, and sometimes she'd have to pay part of it.
Now, even with "gold plated insurance", many of my families doctors don't handle insurance; we pay them directly, and we have to deal with the insurance companies ourselves. My wife spends countless hours dealing with what I assume is willful incompetence. For example, filing four identical (other than date) forms for a series of physical therapy sessions, and having the insurance company approve two and reject two because the codes were wrong. Or the it was unreadable. Followup calls get a different person every time, and when they review it they say: oh, I don't know why it was rejected, that is fine. I'll personally make sure it gets fixed. And then it doesn't get fixed. Having to call five for six times for one bill is common.
Eventually science progressed to the point that medical care was an inevitability in people's lives; which is a surprisingly recent development due to modern medications, lab tests, improved treatments and surgeries, increasing preventive care, etc. Faced with this sea change, developed nations around the world transitioned to some form of universal health coverage.
Only the United States persists in the delusion that an insurance-based system is an efficient way to provide healthcare.
I very much disagree. When I didn't have medical insurance, doctors charged me twice what they charged the insurance companies. Insurance companies have a vested interest in reducing the costs of medical care, while doctors have a vested interest in increasing them. Screwing patients out of payments is not an aligned business model, but it only becomes worse when you don't have someone there fighting to reduce costs on your behalf, willing and knowledgeable enough to know when a medical test is superfluous, or over-priced.
Doctors are still prescribing name-brand drugs when equivalent generics are available. That's some really basic stuff that we're still struggling with. Forget it when a doctor asks for a test that you don't even know enough about to say what it does, let alone if you're getting fleeced for money. Insurance companies get to be the bad guy in the middle who both doctors and patients can blame for not paying for things the patient shouldn't have to pay for in the first place.
But remove that stop-gap and you're relying on the blind trust of the doctor to do the work of appropriately minimizing costs for patients in the face business pressure to do otherwise. And if there's anything I know about human nature, is that we're capable of doing what's best for us, while honestly and truly thinking that isn't the true motivation. I've had mechanics try to sell me on nonsense that more knowledgeable friends of mine recognized as a scam. You don't want that when it comes to what is already one of the biggest expenses in a person's life.
You've identified the symptom but misattributed the cause. You ran afoul of the charge master system of billing, which is a byproduct of our insurance-based healthcare system and the laws which uphold it. In short, providers are "forced" to set their base rates high in the knowledge that insurance companies (their most significant revenue source) will negotiate a fraction of the posted rate. Meanwhile, federal law enforces (under very stiff penalty) that individuals cannot negotiate nor be given a discount from the base rate.
You are also correct to identify the inherent information imbalance in the doctor/patient economic exchange: you as the patient will never know for certain if the recommended course of treatment is appropriate. Realistically only a doctor has enough information to tackle that question. In a cash-based system you are indeed susceptible to abuses.
(In fact, this is one of the main arguments against concierge or "executive" medicine: they will frequently throw in wasteful and dangerous tests like full body scans which have absolutely no justification in medical science.)
But by the same token, insurance company incentives aren't aligned in your interest either, so there are even more abuses on that side.
I believe a single-payer system is the best compromise -- the government's incentives are best aligned to improve the health of the populace (securing a healthy workforce) at the least cost. ("Least cost?!", I can hear the scoffs as I type.) Only government systems have enough scope and lifetime to realize the long-horizon payoffs of preventive healthcare, and cannot so easily escape their failures (the way insurance companies could with lifetime caps). Many people are surprised to learn that Medicare is at least on par in terms of efficiency and above par in terms of patient outcomes and satisfaction.
https://oig.hhs.gov/fraud/docs/alertsandbulletins/2004/fa021...
It points out a pair of laws -- the Federal Anti-Kickback Statute, and the Social Security Act -- which may have caused some confusion about discounts and waivers. Hospitals, the memo assures, are free to offer discounted services under a specific set of conditions such as methodically established patient financial need, an inability to collect on bills, and given that the waiver does not in any way entice business (i.e., you can't advertise it).
But the implication is that you can't give discounts willy-nilly, as a provider, or risk federal audit.
A separate but related issue is that under-billing may be considered fraud by CMS. A doctor cannot provide a service which they do not bill for, nor bill for a code which is lesser in magnitude than the actual service provided. I can't say if anyone has ever been investigated for under-billing.
In any case it's worth adding that aside from legalities, there are severe ethical ramifications of offering discounts to certain patients and not others unless that decision is made by some impartial measure. You could imagine all kinds of kickbacks, favors, enticement, coercion, biases, and so forth rearing their ugly head if doctors are given the freedom to bill whatever they choose (less or more).
If you are talking about the US, we have several times in the past negotiated our bills down as much as 20%. It does not appear to me that there is anything illegal about that.
But it does gall that they try to charge someone without insurance and with no bargaining power the full rate, well knowing it’s a fake rate.
I should have been more careful with my terminology. I used "insurance" as a shortcut for private, for-profit insurance, excluding government insurers like Medicare.
There are other non-insurance interventions like forcing hospitals to provide emergency care.
My understanding is that benefits like healthcare were a means to attract employees by increasing their compensation without giving them cash per se. I don't know all the one and outs, but that is my understanding of the actual origin. Of course, like anything, it then evolved.
It is quite incredible that the U.S., the symbol of freedom, can't freely import drugs from abroad. Considering the rampant use of pharma specially, dropping the costs 1/2 of meds would lower the cost of healthcare overnight by an enormous amount.
An interesting bit of data that highlights just how profitable this industry can be comes from the wikipedia page for McKesson Corporation[1]:
> On June 24, 2013, The Wall Street Journal reported that McKesson Chairman and CEO John Hammergren's pension benefits of $159 million had set a record for "the largest pension on file for a current executive of a public company, and almost certainly the largest ever in corporate America." A study in 2012 by GMI Ratings, which tracks executive pay, found that 60% of CEOs at S&P 500 companies have pensions, and their value averages $11.5 million.
And no: marketing is not necessary for these products. TV commercials and other ads to public: not necessary.
Doctor pay is really high in the US and its very regulated. Its expensive to be a doctor (long schooling, expensive mal praxis insurance), license ceilings, state-licensing and effective banning of doctor importation.
Doctors get a decent share of the cost (1/10 i read somewhere), buts its still not the bulk. Nevertheless, just allowing doctors to come in and have unlimited licensing would hit costs a lot.
I'm not an economist, but it seems like a 5% margin on a $850 billion market is worth a 10% margin on a $425 billion market.
Its a big market, but insurance companies are not the ones making a killing.
First, there are a lot of tests and procedures ordered by doctors that only have some, but very small, benefits for the patients [0]. Doctors are incentivized to do this because each procedure has a set price (negotiated with insurance companies and Medicare / Medicaid) and the only way to get more revenue is to perform more procedures.
Second, patients themselves order a lot of procedures out of fear. Arguably, they can be better off without these procedures. A prime example is end-of-life care, where patients and families often want to "do everything possible" even if those intrusive medical procedures bring nothing but a few weeks of miserable living [1]. Those end-of-life procedures are extremely expensive while having questionable benefits in terms of bringing a "happy" life rather than just a longer life [2].
[0] https://www.scientificamerican.com/article/unnecessary-tests...
[1] https://www.npr.org/sections/money/2014/03/05/286126451/livi...
[2] https://www.amazon.com/Being-Mortal-Illness-Medicine-Matters...
Another relevant effect worth noting here is CYA medicine: doctors order tests aimed at catching highly unlikely conditions to protect themselves against the hypothetical lawsuit that asks "why didn't you test for that?" Whatever the truth is about malpractice suits, the perception in the industry seems to be that these cases are overwhelmingly biased against doctors if even one question can be raised about the course of treatment.
They charge whatever the fuck they want.
Also; equipment manufacturers and drug companies: who both abuse the shit out of our patent system. But even off-patent drugs are being priced ridiculously high now. Barriers to competition are still extremely high.
Since manufacturing capacity of IV bags was taken out in PR, there is a national shortage. This is NOW causing rationing (in effect). Prices are going up, but nobody's addressing the manufacturing problem - because: Puerto Rico.