The real reason your health care costs an arm and a leg: cost pushers

As another health care reform proposal wends its bumpy way through Congress, George Mason University professor Jeremy Mayer has identified what he believes is the real reason health care in America is the most expensive in the world: cost pushers.

“One big reason the United States pays more health-care costs than any other country is that a huge portion of our fees go to nonmedical bureaucrats: accountants, staff doctors at insurance companies, lawyers, billers—the ninjas of medical accounting,” he said.

Those middlemen ensure that the price of any aspect of the system remains blurry. Mayer, who teaches at George Mason’s Schar School of Policy and Government, points to a typical insurance bill as an example.

“Every insurance bill is broken down into hospital charges, doctor fees, medication coverage, what your insurance covers and what you owe. It took complex negotiations to arrive at what you pay,” he said. “Most doctors have office billing experts to handle complicated insurance filings, and fight with insurers, laboratories, hospitals and patients over costs.”

There are two ways to truly fix the health care system and reduce cost pushing, Mayer said.

“Single payer, in which cost pushing declines because government pays almost everything, and direct primary care combined with catastrophic coverage, in which doctors and patients handle most common costs without insurance,” he said. “We would let individuals choose which system works best for them. There would have to be partial subsidies for those who couldn’t afford either.”

Jeremy Mayer can be reached at jmayer4@gmu.edu or 703-993-8215.

For more information, contact Buzz McClain at 703-727-0230 or bmcclai2@gmu.edu.

About George Mason

George Mason University is Virginia’s largest public research university. Located near Washington, D.C., Mason enrolls 36,000 students from 130 countries and all 50 states. Mason has grown rapidly over the past half-century and is recognized for its innovation and entrepreneurship, remarkable diversity and commitment to accessibility.