Of all the proposals circulating in Congress on health care, Rand Paul’s make the most sense for CONSUMERS of health care and insurance.
Tort claims do relate, but tort awards in court, paid from malpractice insurance, are so high because of all the other medical costs.
Insurance claims CANNOT be discounted as also a major factor. John Stossel made this point on a program he did after he himself had to work with the health care system and go through all that for some major issue. A large part of the blame for such high medical costs for services delivered to patients is that the customer for the procedures is the insurance company, not the patient.
The insurance companies make their profit on a markup over costs and overhead, as a percentage added on to what is paid to medical services companies. Meaning, they have incentive to charge the patient as high as possible. It’s like the stock broker who makes a commission on every sale and every buy.
Another thing driving up insurance cost is the federal tax code deduction allowed corporations’ cost for subsidizing insurance as a benefit for their employees. The individual taxpayer gets almost no break at all, like the changes to HSA considerations Rand Paul is calling for.
The insurance benefit came about during the Roosevelt war-time freeze on wages and prices. Inssurance benefits became the only way companies could give raises in compensation and lure productive employees.
Government interventions in any economic transaction always puts a crimp on the general economy.