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WSJ Makes Rush's Longstanding Point on Paying for Health Care, Introducing Market Forces, and Driving Down Cost


RUSH: There's this great, great piece.  I must have had five people send me this piece from the Wall Street Journal.  And I'm gonna be honest.  I'm gonna be a human being. I'm gonna tell you, it offended me every time I got it.  It offended me every time I received it.  But, I gotta be bigger than that.  I have to rise above my personal feelings, and I'm gonna do that.  I'm gonna get to it here in just a second, but we've been working hard.  As you know here, the art of persuasion is something that we talk about and execute. We implement it frequently, daily oftentimes on this program.  And here is the latest attempt at outreach to the Millennials. 

(playing of spoof) 

Obama's promise and expectations for the Millennials.  Rush Limbaugh.  All right.  Let me ask all of you, how many times over the course -- this is for you regular listeners -- how many times over the course of this program have you heard me tell you I do not have health insurance?  Lots of times, right?  How many times have you heard me say, "I went to the doctor yesterday, and when it was over, I said, 'I want to pay for it,' and they didn't quite know what to do, because I don't use insurance."

I wanted to use a credit card or write a check and they didn't know what to do.  How many times have you heard me describe, when I've had to go to the hospital for an overnight, and I paid for it with a credit card, and it cost, in one instance I remember telling you, $12,000 less than had I used insurance.  I remember, here I am in the sickbed, and before the doctor even came to see me came the hospital payment person wanting to know how I'm gonna pay for it.  I said, "I'm gonna give you a credit card." 

"Oh!  Oh, god, we love that." 

"You do?  'Cause the doctor's office says they don't know what to do." 

"No, this is great. This is gonna be easy.  You're gonna save a lot of money." 

I said, "I know."  And I said, "You know why?  Because there isn't any third party in the mix here." 

How many times have you heard me say that if health care were priced in a market way, much like airfare is priced or hotel rooms are priced, that it would make infinitely more sense?  How many times have you heard me say that the biggest problem with health care is there is no direct relationship between the customer and the service provider?  And therefore there's no competition for price.  How many times have you heard me advocate the whole notion of medical vouchers, where you are given whatever amount of money you pay in tax for health care a year, you're given that amount in an account, and then when you gotta go to the doctor, you go and you use that money but you shop until you find a doctor with the price you want to pay. 

We have competition in the system.  No insurance company, no third party, clean, simple, just like buying anything else in our economy.  How many times, over 25 years?  Too many to count, right?  And each time there's a different element to the story, but it always remains the same.  Over the years I've made the point that the biggest problem in health care is that the costs are totally unrelated to the patient's ability to pay, and nowhere else in American commerce does that exist. 

You look at hotel rooms, we go everywhere from Motel 6, Thunderbird overnight by the hour, all the way up to $55,000-a-night presidential suites in Dubai, or wherever.  And there's a market for every price level.  And there's no insurance company, and there's no government.  The same thing with airfare.  If you want to fly first class, if you want to fly coach, if you want to charter your own jet, whatever the market, whatever you can afford, whatever you want to do, you can do it.  And there's no third-party middleman getting in the mix.  But you have to be able to afford whatever you want, and what you can afford is available somewhere in the market.  If you can't afford first class, there's a coach ticket somewhere for you.  There are places all over the Internet that will find you the cheapest hotel room and the cheapest airfare and the cheapest resort vacation.  No matter what it is.

The same thing with buying a car. You can go out and spend whatever a Rolls-Royce costs or you can go out and buy a Mini Cooper for $24,000, whatever it is.  Point is, products throughout market are priced on the customer's ability to pay.  There are actually two areas where this doesn't apply.  One is education, higher education.  The other one is health care.  And these countless discussions have made the point that what has really gummed up the works here is the government being involved and the government and/or an insurance company being the agent who pays, insulating the customer, and so the customer really doesn't know what things cost. The assumption is that a third party is paying for it, that third party, the insurance company, also determines whether or not you get coverage or treatment based on whether or not they will pay for it. 

You're a total prisoner of the system.  I mean, I've been telling these stories and making these points for many moons.  Well, yesterday in the Wall Street Journal, there was a column by Dr. Jeffrey Singer.  He practices general surgery in Phoenix.  He is an adjunct scholar at the Cato Institute, and he writes a column that basically has every element of every story I've ever told you about this.  I had five people yesterday send me this thing.  I know I ought to be bigger than this, but, darn it, I'm human, too. 

I've been making this point for 20 years, and these people, my friends, sent it to me as though, "Wow, this is cool. You ought to see this. This makes more sense than anything I've ever heard!"  And I ask myself, "What am I doing here?"  And then I realize, "Well, I didn't write down what I said," except I did; it was on my website.  But it wasn't in the Wall Street Journal. It wasn't a column, but was on my website and it was in my newsletter.  This is a column about a guy who was treated for a condition and spent $17,000 less than he would have had he gone the insurance route. 

Pull quote from the column:  "When my patient returned for his post-op visit we discussed the experience. It was clear to both of us --" And this is the paragraph.  This is the, "You gotta read this! You gotta read this! You gotta read this!  This is great." 

"It was clear to both of us that the only way to make health care more affordable is to diminish the role of third-party payers. Let consumers and providers interact through market forces to drive down prices and drive up quality, like we do when we buy groceries, clothing, cars, computers, etc. Drop the focus on prepaid health plans and return to the days of real health insurance -- that covers major, unforeseen events, leaving the everyday expenses to the consumer -- just like auto and homeowners' insurance.

"Sadly, we are heading in the exact opposite direction. ObamaCare expands the role of the third party and practically eliminates the role -- and the say -- of the patient in the delivery of health care. Will they ever learn?" It's good to see this out there and in the Wall Street Journal.  But still.  Anyway, here's the piece. 

"Every so often I have an extraordinary and surprising experience with a patient -- the kind that makes us both say, 'Wow, we've learned something from this.' One such moment occurred recently. A gentleman in his early 60s came in with a rather routine hernia in his lower abdomen, one that is easily repaired with a simple outpatient surgical procedure. We scheduled the surgery at a nearby hospital. My patient is self-employed and owns a low-cost 'indemnity' type of health insurance policy. It has no provider-network requirements or preferred-hospital requirements. The patient can go anywhere. The policy pays up to a fixed amount for doctor and hospital bills based upon the diagnosis. This affordable health-insurance policy made a lot of sense to this man, based on his health and financial situation.

"When the man arrived at the hospital for surgery, the admitting clerk reviewed the terms of his policy and estimated the amount of his bill that would be paid by insurance. She asked him to pay his estimated portion in advance. (More hospitals are doing that now because too often patients don't pay their portions of the bills after insurance has paid.)
The insurance policy, the clerk said, would pay up to $2,500 for the surgeon -- more than enough -- and up to $2,500 for the hospital's charges for the operating room, nursing, recovery room, etc. The estimated hospital charge was $23,000. She asked him to pay roughly $20,000 upfront to cover the estimated balance.

"My patient was stunned. I received a call from the admitting clerk informing me that he wanted to cancel the surgery, and explaining why. After speaking to the man alone and learning the nature of his insurance policy, I realized I was not bound by any 'preferred provider' contractual arrangements and knew we had a solution. I explained that just because he had health insurance didn't mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man's policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn't have been able to enlighten him. Hospitals and other providers make their 'list' prices as high as possible when negotiating contracts with health plans and Medicare regulators. No one is ever expected to pay the list price."

It's the wish list priced. 

"Most people are unaware that if they don't use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the "list" price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass."  And this is exactly what happens to me when I go to these doctors' offices, "Look, I just want to pay for this."  Ultimately they see the light. They're just so conditioned to take an insurance card, that the offer of on-site payment stymies 'em.  When they figure it out, they love it.  Just like the hospitals love it when we pay off. 

So, anyway, the doctor writes, "So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a 'self-pay,'" which, on every medical form I have, that's what I am.  Self-pay.  I grew up thinking it was my responsibility. Anyway, that's another story.  "We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance."

Again, the point is, when insurance and third-party payers are involved, the hospital and the doctor, everybody sets this ridiculously high price to cover.  You know, some people do pay it, and that covers and makes up for the people that don't pay their share, patients who don't pay their share of what is owed, the copay, if you will. 

So even with the markdown for upfront cash payments, none of the providers was losing money.  At $3,000 for this hernia surgery, everybody involved made a profit.  And yet had he gone through with it with insurance at the first hospital, $20,000 versus 3,000.  If they weren't gonna make a profit, they wouldn't have agreed to the prices.  But they did.  With the third-party payer taken out of the picture, we got a better idea of the market prices for the services.  Well, yeah, it's what happens.  Pay cash when you go to the hospital, if you can, pay with the doctor and you'll find out what it really costs, and then you find out -- this is the secret, folks.  This is the fix for this.  Just market forces. 

The good old free market.  You don't need fancy alternative 3,000-page pieces of legislation that counter Obamacare.  You just need a little good old capitalism.  It's amazing.  "Sadly, we're headed in the opposite direction," and the doctor says, will anybody ever learn?



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