How insurance encourages us not to ask questions: An example

[Warning: slightly icky medical details follow.] I have a plantar wart. If you've never had the pleasure of dealing with one (I've read that about 15% of Americans have), allow me to inform you that a plantar wart is what happens when HPV decides to take up residence somewhere on the sole of your foot. The warts HPV causes in this way are not really painful, but they can be uncomfortable. They are also tenacious as all get out. All kinds of over-the-counter remedies exist for getting rid of plantar warts. Often, as has been the case with me, they don't work. After trying and failing to kill the little bastard son of a bitch darn thing for six months with OTC salicylic acid patches, I finally gave up and headed to a podiatrist.

Podiatrist has a look at my foot, confirms that I indeed have a plantar wart, and informs me of the stronger options available to treat such things when there's a prescription involved. Fine. (Well, except for the hour and a half beyond my scheduled appointment time I had to wait to see him, which is an example for a different argument against government regulation in health care...but that's for another day.)

At this point, the doctor told me he would shave off part of the wart so that the medication he prescribed me to put on it would be absorbed more efficiently. He took out his scalpel and scraped for about 30 seconds. I thought nothing of this at the time. But, a few days ago, I got my insurance company's "explanation of benefits," a statement I receive any time I visit a doctor or hospital. The EOB, as they abbreviate it, explains what services I received from the doctor, how much the doctor billed the insurance company, how much the insurance company actually paid out (since, frequently, they negotiate lower rates than the doctor initially bills), how much of a copay I had, and if there's any further obligation on my part to pay the doctor. (Usually, since I have a pretty generous insurance policy, there isn't.)

When I got the EOB for the podiatrist visit, I saw that the doctor had billed about $150 for a "visit" and gotten paid the negotiated rate of $75. He also billed the insurance company $100 for "surgery," and got paid $53. It took me several minutes to figure out that this "surgery" was the 30 seconds' worth of shaving he'd done to my foot in the office! Would I have paid $53 for this service, let alone the requested rate of $100, if I were paying for my medical care directly? Oh, hell, no. It's something I easily could have done myself, at home, for the price of an Xacto knife. I'll admit, I probably wouldn't have thought to ask the doctor the price of such a simple "operation" before he performed it, but if he had had the nerve to try and charge me that much for it, I would have argued and, if he insisted on charging me in the end, I could have refused to see him for any further care and posted a negative review on one of the many ratings websites out there.

In any case, there would have been much more pressure on the doctor -- whether from me or from patients who'd seen him before me -- to put a much lower price on such a small service. Instead, there was no incentive at all for the doctor to charge a low price, or for me to question the bill afterward. After all, I'm not paying it -- my insurance company is. Except that, when this kind of decision is made by millions of people, guess what? Premiums go up!

Remember, we owe this distorted system to the tax policy that makes it advantageous for our employers to buy us generous health benefits rather than raising our salaries. In a free market -- free of coercive taxation -- most of us would likely buy far less comprehensive health care policies in order to save money, and then we'd scrutinize our health care expenses far more closely in order to save more money.