If You Slow Growth Who Gets Stunted? - Health Care

Health Care costs are rising too fast. OK, so why? What is driving up the cost and why is it increasing too fast?

Where can the cost come from? I think the list of cost-causers is generally short. How may cost-causers, let me count the ways:
A. Insurance companies
B. Doctors
C. Hospitals
D. Pharmaceutical companies
E. Patients
F. Administrators
G. US Government
H. Retirement communities / Elder Care facilities
I. Medical Device manufacturers

Might as well start at the top - Insurance Companies. Doesn’t seem logical that they would be the actual cost causers. While they come in two basic flavors: for-profit and not-for-profit. We won’t include or focus on the predatory for-ripping-you-off companies; I don’t think they are a significant portion of the market. Besides the rip-offs don’t need to raise prices, they just want to take the money and run; and they pretty much keep costs low because they deny everything.

Well then, the for-profits and not-for-profits; are they increasing the costs in any direct way? They don’t really have to. They can target a profitability level, or a covers the expenses and provides the management with really good salaries, and sit back and let the rest of the system raise the cost/rates. If you are a for-profit then if the costs that you have to cover and use to set your rates increase at any rate (high or low, fast or slow) then your profits go up accordingly. Afterall, 10% will return more money if the costs are $1 trillion dollars, then it does for $1 billion dollars. So if the executives get half the profits in bonuses and there are 10 of them; they get $5 billion dollars each if the costs go to $1 trillion dollars instead of the $5 million they get if the costs are only $1 billion dollars. Plus, if they want to nudge up their profits (or fair-market based salaries) then they can tighten the approval guidelines and decrease they costs. So no, I don’t think the Insurance companies are in the running for even third place in the cost causer category.

And we can consider the Doctors next.