Why Health Care Costs So Much

Greg Dattilo and Dave Racer are two insurance men with lots of experience and understanding of what’s right and wrong in U.S. health care. Every couple of years they write a book, and they’ve just published Why Health Care Costs So Much: The Solution – Consumers.

It’s a rare book (actually a “booklet”) about health policy that is fun to read (Top Ten Myths of American Health Care being another recent example). Plus, at 80 pages (including drawings) and available in bulk for only $1.50 each, you can buy a box and hand them out like religious tracts.

For those with neither the time nor inclination to wade through economic analysis, this book explains how government interference has driven up costs and harmed choice in American health care.

Because of government intervention, almost no patients know how much their health care costs, so the “system” has to rely on a bureaucratic web to fix prices, which results in frustration and loss of control by patients and providers.

They illustrate this superbly with the example of prepaid automotive care substituting for auto insurance. Instead of buying a new set of tires when he needs them, the driver pays an astronomical premium to have his car insurer take care of everything.

As a result, he loses his choice of tire and tire shop. Ultimately, the auto insurer contracts with only one tire shop in the driver’s neighborhood, resulting in monopoly.

They also explain how we can take control of our health spending by buying low-premium, consumer-driven health policies coupled with Health Savings Accounts, which leave patients in direct control of more of their health-care dollars.

Importantly, they teach individuals how to buy health care like we buy other goods and services.  They advise patients to ask hospitals before treatment, “what would I pay if I were uninsured?,” before treatment, in order to avoid the insane list prices that hospitals charge.

The authors promise that this book is the first in a series of six. I look forward to the next five.

Print