In their recent episode of the VALUE: After Hours Podcast, Mitchell, Taylor, and Carlisle discussed The Healthcare Tapeworm. Here’s an excerpt from the episode:
Jake: So, healthcare really has been this vampire, this tapeworm on really not just corporations, but on the average person what they’re taking home. It’s a little disheartening in this video that I got a lot of these facts from, is from 2012. We’ve made no progress in the last decade on–
Mike: I’m sure it’s quite a bit worse today than it was in 2012, to be honest with you. I’m pretty sure that’s worse.
Jake: Probably, the worst. So, here’s what’s really going on and why our system is broken. It really it comes down to Economics 101. At the margin, the decision, the point of sale, where we decide what to consume as a person in a healthcare setup that we have, the prices are set so artificially low to us with this copay system, insurance policies are become this basically sort of all you-can-eat thing where you end up with basic tragedy of the commons, this is Econ 101.
So, a perfect example of that is the spending went from 64-year-old versus a 65-year-old, and you know what happens at that age, you kick over onto Medicare. All of a sudden, you’re on the all-you-can-eat buffet, like how much does spending go up from a 64-year-old to a 65-year-old? It’s 40% more. It’s not that the people are just like, “Oh, I’m waiting until I’m 65 to get that lifesaving surgery now,” all of a sudden. Health outcomes are no different between 64 and 65. It’s just now that it’s someone else’s paying for it, we over consume.
So, what about these other places that are heralded like Canada and the UK, different systems. They don’t use a pricing mechanism to solve this problem. They use rationing instead. You queue up, you get in line, and if you want a knee surgery, it’s going to take four years from now. I’m not sure that’s much of a better system, but people seem to tout that these other systems are better than what we have. I’m not so sure about that. And there’s also this denial of care thing where they figure out like, “Hey, if it’s going to cost $30,000 this year to save your life, well, that’s over what we have allocated for that budget.” So, sorry, we’re not going to be footing the bill for that.
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