How much does health care really cost?

While the Affordable Care Act (ACA) is certainly an important and potentially transformative body of legislation, in my opinion it does address the underlying problem with the cost of health care in this country.

First, let me pose a question – does your company provide free coffee?  Most companies do in fact provide some form of free coffee in the workplace, but is it free?  Of course not, you pay for that coffee in the form of lower compensation.  Sure, coffee doesn’t cost a lot – not nearly what health care costs but the issue is not one of degrees, it is the underlying concept that we, as a society, believe that if we do not pay for something directly, it is free.

In 2009, the U.S. spent $7,538 per capita on health care, 33% more than the next high spender Norway and 46% more than our neighbor Canada.  Around the same time, The Commonwealth Fund reported that the U.S. ranked last in health care quality and safety when compared against six other industrialized nations – Britian, Canada, Germany, Netherlands, Australia and New Zealand.

So why are we paying almost twice as much and getting not even half as much when it comes to quality health care?

Let’s go back to the free coffee shall we.  Free coffee is like health care in this country – it’s perceived “free”.  Sure we all know that we pay a lot in health care premiums but those costs are taken from our paychecks in most instances pre-tax so we never “see the money” to begin with.  Furthermore, a majority of workers in this country do not have an appreciation for the amount their employer contributes towards their health care premiums. Most are only exposed to the total cost of health insurance premiums if they have the misfortune of having to participate in COBRA.

While consumer-directed health plans are on the rise, a majority of insurance coverage is still co-pay based requiring the participant to pay a nominal fee each time they seek care, regardless of the cost of that care.  If you had to pay $0.50 for each cup of coffee at the office, how much coffee would you drink then?  Perhaps the same amount but perhaps not – you have been exposed directly to the cost of the coffee and now you’re an engaged consumer.  The same thing must happen in health care – consumers must engage to provide us with any hope of controlling health care costs in the future.

For now I leave you with this thought – how much does it cost to go to the doctor?  Ask yourself this question, ask your friends and co-workers.  The most common answer provided is the amount of their co-pay.  But do you really know how much health care costs?  Try asking your doctor how much your visit really costs, you may be surprised at the answer – if you get one at all that is.

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