"There's something about our culture and politics that's making that happen, even in a system with centralized price-setting like Medicare"
It's not a difficult puzzle: nobody in our system is incentivized to care about costs. The insured consumer never sees the cost, the physician is incentivized to be cost-blind when choosing treatment options, and the insurance companies pass the costs back to employers, who don't get any say in treatment. The only other people who know what health care costs are unemployed and/or poor, and well...screw them, right?
You couldn't possibly choose a worse economic model for allocating health care. Medicare is much cheaper and more efficient than employer-based healthcare, but it can't overcome the structural expenses created by a system dominated by people who are almost totally cost-insensitive when it comes to their health.
And yet they don't. Do you know that the cost of prescriptions can vary greatly between pharmacies? Of course, you only pay your co-pay, but your insurance company pays the difference.
When's the last time you comparison-shopped your prescriptions or other medical services?
Drugs aren't the best example since they are inexpensive (at least the ones I've purchased). But if I had a more expensive surgery where I was on the hook for 20-40%, I might be incented to negotiate or shop around. And you'd certainly think the insurance company would be highly incented to negotiate.
"Drugs aren't the best example since they are inexpensive (at least the ones I've purchased)."
There are some very expensive drugs, and they're not uncommon. For example, valcyclovir is a very common anti-viral drug, and costs something like $300-400 per course. The similar drug acyclovir is $20 as a generic, but is more annoying to dose. As a result, doctors will nearly always prescribe valcyclovir over acyclovir. For patients with a chronic infection, that's a mundane decision with an impact of tens of thousands of dollars per year. But unless you're a doctor or a pharmacist, you'd probably never know about the choice.
Insurance companies pass these costs on to the risk pool first, then onto employers. By the time the cost increases hit you (through employers cutting or reducing your health benefits), the implications are so far removed from the initial expenses that there's no way to close the cycle.
It's not a difficult puzzle: nobody in our system is incentivized to care about costs. The insured consumer never sees the cost, the physician is incentivized to be cost-blind when choosing treatment options, and the insurance companies pass the costs back to employers, who don't get any say in treatment. The only other people who know what health care costs are unemployed and/or poor, and well...screw them, right?
You couldn't possibly choose a worse economic model for allocating health care. Medicare is much cheaper and more efficient than employer-based healthcare, but it can't overcome the structural expenses created by a system dominated by people who are almost totally cost-insensitive when it comes to their health.