We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Dr. Rich's explanation is true, but I believe he would also agree that the cost of money is also a factor in healthcare costs.
How long does a healthcare provider have to wait for payment from the health insurance underwriter? My wife's recent bout with breast cancer afforded me the opportunity to make some first hand observations. If the bill was less than $1000 it was usually handled within 45 days. But during cancer treatment there are very few charges that don't exceed that amount. And payment of those usually requires the provider to forward "progress notes, test results, and treatment prognosis" before they are paid 60-90 days later.
So the doctor, hospital, lab, etc, are going to expend dollars to provide treatment and then have to wait for 3 months to get paid. Healthcare is just like any other business, so they are going to charge interest on these expenditures by inflating the costs.
However, the insurer is making money by delaying payment as long as possible in order to make interest on premiums received, and/or not pay interest on money borrowed to pay claims. It’s a vicious cycle that drives costs higher and higher.
All these factors add inefficiency to the process as every level and contribute to higher healthcare costs. But thinking that government healthcare is the answer is naive - just look at the shape social security and medicare/medicaid are in.
Some of it also comes from choices hospitals have made in billing and how they cost items.
About 5 years ago, wife had an outpatient surgery. For which, I paid $75 as a deductible and insurance handled the rest. The hospital billed for $7500, (including charges such as $45 for disposable surgical light handles, sterile drapes for $300). They accepted $1200 as payment in full from the insurance company. So how much of the missing was recorded some where as a loss?
A lot of the numbers hospitals use to justify charges seem cooked.