Third-party payers

October 25, 2010 

Adam Searing claims that contributing to the rising costs of medical care in this country is the fact that we spend billions on name-brand drugs and pricey new medical devices despite little evidence they work any better than older models ("Pricey medicine and its price," Oct. 12 Point of View article).

What Searing leaves out is any explanation of why that might be the case. Indeed, it is not we who spend billions on such medical care but third parties, including government programs and insurance companies. We as consumers are severely insulated from paying the full bill thanks to Medicaid, Medicare and insurance co-pays.

Recent estimates suggest that nearly 90 percent of medical costs are paid by a third party. So it is only natural that billions would be spent on pricey drugs and medical devices of questionable benefit compared with older models because the people electing to purchase such goods and services are not actually paying for them.

Searing's hope that the recent health reform law will somehow reduce costs is misguided because the major changes in the law only serve to shift even more medical care payments onto third parties by forcing everyone to carry insurance and increasing Medicaid enrollment.

Brian Balfour


The writer is a policy analyst for the Civitas Institute.

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