Beginning in 2010, employees can expect to face even higher health care costs when their deductibles, co-payments and employee out-of-pocket limits are expected to increase. The health care industry wants patients to be “more aware of the actual cost of services” and to be “taking responsibility” before using services.
The rationale for these increases is linked to the problem of moral hazard, which some consider contributes to run-away health care costs. In health economics, moral hazard occurs when people use more health services than is necessary because insurance will cover most of the costs, which leads to a “welfare loss” (i.e., marginal costs are greater than marginal benefit). If people didn’t have health insurance or if they had to share for more in health care costs, then they would only use health care when necessary because they are now cognizant of the true costs and hence there will be no “welfare loss” (i.e., marginal costs equal marginal benefit).
However, John Geyman, M.D. considers moral hazard as the main problem of driving run-away health care costs a myth. He argues that what drives up health care costs is “technological advances, changing thresholds for defining ‘disease’ (egs., osteoporosis and hyperlipidemia), increasing prevalance of chronic disease in an aging population, wasteful administrative costs in an inefficient system, high levels of physician-induced demand, and corporate profiteering through the medical-industrial complex.” (Do Not Resuscitate, chapter 4, p69)
Dr. Geyman goes on to argue that higher cost-sharing leads to patients skimping “on necessary care, such as cutting back on expensive but important medications” which leads to “worse health outcomes requiring greater interventions later at higher costs.”
Who cares if patients face higher adverse outcomes such as higher death rates for poorer patients than affluent patients or increased emergency visits? Maybe health care companies should take responsibility themselves by finding ways to lower their own costs and then maybe they can do what health care providers are supposed to do; provide health care.