LASIK

Several years ago I went and got my eyes fried with lasers. I hated glasses and had worn contacts since the 7th grade. I spent some time in college with glasses but the moment I could ditch them I could, and the moment I had the cash in hand to get my eyes fried, I did.

Overall, it was a pleasant experience. I sifted through several different offices offering the procedure. I called the one that had a good reputation and was offering a promotional price. I made an appointment to get my eyes checked. The office was neat, clean and offered a state of the art pod coffee machine. Once I qualified for the procedure, I went and had it done. My eyes didn’t heal right the first time so the office gave me a second round of zaps at no charge. I have had 20/20 vision ever since. I am extremely pleased. I paid largely in cash and financed the rest.

LASIK is the great anomaly of the American Health Care system.

* The procedure, once extremely expensive, is now relatively reasonable because the price of the procedure has amortized over time.
* Prices are well-known and customers can shop based on reputation and price.
* LASIK treatment is subject to open, competitive market pressures.
* No insurers were called or consulted. No one was billed except the doctor to me.
* No insurers dictated which LASIK center I could go to, nor did they have to pre-approve the procedure.
* I paid in cash.

Like electronics, the price of LASIK has fallen and normalized. You can walk into the office, give them money, and get the procedure. It is subject to open market pressures. The pricing on LASIK works and the quality has skyrockted.

Let’s look at my current CT Scan. I have had real problems with my chest (left side) recently. The doctor ordered a CT scan because he was worried about what he saw on the X-Rays. Still is, in fact. However:

* I have no idea how much the CT scan cost but I’m sure I will be billed some random and obscene amount of money.
* The insurer would not allow me to get it at the time the doctor ordered the test.
* The doctor had to get on the phone and give justification to the insurer for ordering the test, causing me to wait 5 days.
* I was not allowed to go to the radiologist my doctor recommended and had a working relationship with.
* Instead I was sent to an office across town that was, to put it mildly, “hinky” and “filthy.” But it was either that or no test because the insurer demanded I see this other doctor.

Reality is this — save the interesting outliers like LASIK, US health care is not subject to market pressures, no one knows how much they actually pay for any of it, the prices for procedures are just made up fictions, and because people (hospitals, doctors, specialists, etc) can make up whatever price they want, the prices for procedures are ridiculously expensive. Hey, if I could charge “a million billion bazillion dollars” for a 15 minute procedure, I would, too!

Anyone who claims that the system is a free market system is selling you something.

Take a look at this post on the WaPo about prices in the US health system. We flat-out spend too much money on health care because consumers are completely divorced from pricing systems. I wonder how much something as simple and straight forward as price discovery on procedures and making those prices public by region and state would change the game.

But of course all we’re talking about is health insurance when we should be talking about health care.

  • Great compare-and-contrast. I especially liked “the prices for procedures are just made up fictions”. I’ve found some doctors charge _more_ if you pay cash, rather than going through insurance, because insurance ‘bargained them down’. Yet other, more sane doctors, charge you less if you pay cash because you save them time and paperwork. Short answer: even doctors don’t like the system.

    Unfortunately, medical insurance is more akin to a gated community, or a hotel that forces you to use room service, than an actuarial service.

    Good luck with your health!
    Sandy

    • The doctors and hospitals start with a very high price for a procedure. Then they go to the insurance company and the insurance company says, “I will pay X.” Then the hospital comes between the insurance and their price and they bill you for the rest. If you’re a poor sucker without insurance, you get that initial hospital quote and pay the massively inflated price for the procedure. They try to monetize and squeeze people who have no money.

      If we just had basic price discovery for procedures we won’t all be horribly overcharged. But we wouldn’t need insurance companies (except catastrophic insurance) either. So no one wants that because we love keeping the worthless middleman around!