Why Did The Cost of Healthcare Become So Inflated? #1

In the years prior to 1965, senior citizens that had lived through the Great Depression were very frugal concerning the matter in which they spent hard earned dollars; one of those frugalities involved healthcare. I know that very well because I was raised by parents who lived on a very tight budget. Those persons who reached the age of 65 in 1965 had put off seeing a physician for a whole variety of reasons which they had previously deemed trivial and which they had chosen to self manage. They considered the cost/benefit ratio of seeing the local neighborhood general practice physician and chose to retain their cash as opposed to spending some of it on the treatment of aches and pains, chronic rashes, constipation, excessive belly-bloating gas, heartburn, chronic fatigue, insomnia and other seemingly trivial symptoms. The common cold was always managed in my parent’s home with over the counter medications and our medicine cabinet was replete with Band-Aids, Vicks ointment, aspirin and various agents, such as tincture of benzoic, to be placed in a bedside vaporizer to reduce a night time cough.

When the Johnson administration implemented Medicare there were no deductibles paid to the doctor and no healthcare premiums extracted from a senior’s social security check; healthcare was essentially free. The government officials who set up the senior care system had grossly underestimated the cost of that government controlled bureaucratic system of healthcare delivery. They did not take into account the reality of all those stored up symptoms and the fact that the zero cost portion of the cost benefit ratio was sending millions of senior patients flocking into physicians’ offices for treatment. They had predicted a cost of $9 billion by 1990; the program’s actual cost that year was $66 billion. After adjusting for inflation over the ensuing 25 years, the cost of Medicare became 165 percent higher than the government had predicted. Having underestimated the cost because they had failed to consider what people will do when something is free, especially something as important as the way they feel, they made a second error and blamed the rise in expenditures on physicians who had naturally billed the government for the patient‘s visit and the diagnostic procedures need to address their symptoms. In 2008 the cost of the Medicare program was $450 billion or 15% of the federal budget. Seniors now have to pay a deductible and depending on one’s income we have as little as $90, or as much as $193, removed from our monthly social security checks and on top of that we still have to pay an additional premium for supplemental insurance.

Next week I will address the egregious error government officials in the Nixon administration made in an attempt to correct the problem. Like a doctor who errs in his or her diagnosis and therefore applies the wrong therapy to cure the patient’s alleged problem, they simply added to the insidious demise of our nation’s access to affordable healthcare: A system that had previously been the envy of every nation in the world. It is axiomatic that a misdiagnosis always leads to a therapeutic failure.