Basic concept 101
1. If you need medical service, you will have to pay for it (singularly or collectively), it’s not free yet– we are not communists.
2. There is an asking price “for PROVIDING medical service”, and there is a marketing price “for PAYING medical service”.
3. If there is 3rd party involvement - insurance, government (capitalist, communist, socialist), the exchange of service/goods are strictly just between the “PROVIDER AND RECEIVER”. “buyer and seller”.
4. Government, insurance, HMO, PPO, wealthy (pay out of pocket individuals), bureaucrats, finance, capitalist come to play, and alter the “provider and receivers” relationship. In a real world of free market, medical service providers and patients come to a “price” both sides can agree upon.
Basic concept 201
1. Insurance – is a risk sharing program. The participants put money into the pool of fund, in hope that collectively – if needed, the “collectives” will assist financially to individual receiving benefits. As a whole, the total outgoing “premium, out of pocket expense” shall equal to payments demanded by the service provider.
2. Service provider is a self sustaining entity. The money collected through donation, and fees shall be adequately cover ongoing expense – such as payroll, facility, equipment, medications etc. Regardless whether each individual transaction/medical service equates to actual payments in full or not.
Basic concept 301
1. Insurance policy – is for people going /or are willing to share the total medical expense with others (people you know or don’t know about). If you don’t want to share the financial risks, – you can always pay it out of your own pocket.
2. Everyone wants free medical service – or pay a little as possible and get as much service as he can. People rarely use medical services (young, or healthy), as a group, are paying a lot less than people use medical service often (old or unhealthy, people with medical risks).
3. Young and healthy, people are likely to afford medical expenses “collectively”, where as older, and high risks people, collectively received a lot of medical services are usually exceeds their ability to pay.
4. Every medical service providers want to make a few extra dollars too. They can setup shops, demanding “proof of financial responsibility” before rendering service. In most cases, medical service is not free. But in our society, it hard to deny medical care for others purely because of financial reason – inability to pay.
5. Medical service providers are run like businesses - completing for “good” patients who can afford their services. Getting better equipments, providing newer treatments, paying more to get more qualified staff are resulting higher costs for services rendered.
6. In the other extreme, If new breed of service providers, use second hand equipment and load up its usage, stick to older may be proven but not as successful treatments, higher younger/lower labor costs staff? Will it lower have “broader range” of good patients?
NEXT WEEK - Human Behavior and Medical expense?
