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Who Pays For Healthcare? When Doctors And Patients Don’t Care

The essence of the moral hazard experience through a nice neighborly conversation:

Neighbor: These allergies are killing me.
Happy:  That’s terrible. I hope you feel better.
Neighbor:  I tried Zyrtec but it wasn’t doing anything for me, so my doctor prescribed ’x.’ (inaudible drug name )
Happy:  Does it start with an ‘x?’ (The drugs name is Xyzal.)
Neighbor:  Yes, it does.
Happy: Oh, that drug (Xyzal) is nothing more than Zyrtec, which the company slightly changed the formula of and now they get to sell it as a patented medication at 10 times the price for the next 10 years.
Neighbor: Oh, I didn’t know that. But you’re right. It was  $110. 
Happy:  Did it help you with your allergies?
Neighbor: Nope.
Happy: I guess you just wasted $100.
Neighbor.  I didn’t waste anything. My insurance company paid for it.
Happy:  Actually, we all paid for it with higher premiums.
Neighbor: (Walks away.)

The doctor doesn’t care — he’s not paying for it. The patient doesn’t care — she’s not paying for it. But everyone complains that their insurance rates are out of control. It’s not insurance company profits that are making healthcare too expensive, it’s patients and doctors who don’t care. 

Bundled care solves this problem because the doctor won’t prescribe a $110 medication and offer therapies with no proven benefit over less-expensive options.

*This blog post was originally published at The Happy Hospitalist*


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