Dr. Jeffrey A. Singer on Health Care’s Third-Party Spending Trap

Many doctors will gladly
substantially discount their fees in return for up-front payments
from people who pay directly for their health care. Hospitals,
ambulatory surgical centers, and urgent care clinics do the same.
Why shouldn’t they? They don’t have to pay an army of staff to fill
reams of forms and wait weeks to months to collect payment from an
insurance company that sometimes is lower than what they get from
their direct-pay patients. Yet most of these same providers have
much higher “list prices”—the official prices they list
publicly—which are used to negotiate compensation contracts with
health insurance companies and other third party payers. As Dr.
Jeffrey A. Singer points out, health insurance—private or
otherwise—does not make health care more affordable. In fact, the
third party payment system is the principal force behind health
care price inflation.

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