Know what you’re NOT paying for – Unpopular positions – Part 2

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Healthcare spending cannot be controlled unless everyone has a stake in it.  And people can’t have a stake in it unless they know what things cost.

The patients most aware of costs are those who pay themselves – naturally.  Those least aware are those who don’t.

An excellent example of this in recent years is the Medicare Part D “doughnut hole.”  In 2010 Medicare Part D will pay about 75% of the first $2830 in medication expenses.  The next $4,550 is payable by the patient at 100%.  Over $7,380 Medicare covers about 95% of drug expenses.

Many of my Medicare patients were dismayed to find they’d entered the so-called Medicare doughnut hole, the middle $3-4,000+ of drug costs for which they bore complete responsibility.  The reason for their surprise?  Their out-of-pocket expenses hadn’t come anywhere near the $2800 limit.  Little did they know that the entire cost of the drugs contributed toward this limit.

(For 5 Ways to Lower Your Cost During the Coverage Gap, i.e. the Medicare doughnut hole, visit

Had they understood, many would have planned differently.  Hitting the doughnut hole proved a great incentive to re-evaluate medication expenditures.  As long as their insurance was paying, they neither knew nor cared what the true cost was.  As soon as it became their responsibility, their motivation soared.  Suddenly, patients who had demanded brand-name drugs were satisfied with generics.

We cannot decide how to spend our healthcare dollars unless we know what things cost, both what we are paying for, and what we are not.  Spending “other people’s money” is ultimately spending our own – we’re just disconnected from the process.

We should each bear the responsibility to know and evaluate the cost of the healthcare we receive.  We have to re-train ourselves and re-train society.

It is not wrong to expect those on public health plans to contribute.  Life is not a free ride.  Everyone has to pay for food and shelter.  Healthcare is no more important than these necessities – perhaps less so.

Again, it is human nature to be concerned with saving one’s own money.  If the healthcare system is to stay in the free market, we must bring self-rationing to the table.  And there is no better motivation to self-ration than spending one’s own money.

But what should healthcare cost in the free market?  That’s the topic of tomorrow’s blog.

Potential savings on 35,000,000 Medicare recipients:  If each saved only $30/year, 35,000,000 x $30 = $1,050,000,000 annually.

© Cynthia J Koelker, MD – All Rights reserved

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