Word: third
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Dates: during 1970-1979
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...assistance for the poor. There are still gaps in the coverage: the 20% or so of the bill that the typical Medicare patient must pay can be a severe burden; the long illness that exhausts inadequate insurance benefits is a terror to the middle class. Nonetheless, the system of "third-party payments" has become so comprehensive that patients today pay directly a mere 6% of hospital bills and 39% of all physicians' fees. The government picks up 55% of hospital bills and 24% of doctor bills; private insurers pick up 37% of each. (The other 2% of hospital revenues comes...
...worst result of the system of third-party payments, however, is a far more insidious one: since the government and private insurers pick up most medical bills, no one in the system has an incentive to hold down those bills. On the contrary: if a doctor or a hospital substitutes an inexpensive treatment for a costly one, he or it merely collects less money from Medicare, Medicaid, a Blue plan or a private insurer...
More fundamentally still, the system of third-party payments may be the root of much medical inflation, but the old-fashioned alternative is a kind of rationing of medical care by ability to pay that the nation now would rightly find abhorrent. Says Rashi Fein, a noted Harvard medical economist: "Medicine is a social product like education. To ration health in terms of price is not the hallmark of a civilized society. You can differentiate between rich and poor with Cadillacs and yachts, but not with medicine...
Nevertheless, on balance, the combination of third parties paying most hospital bills and the noncompetitive nature of hospital care seems to have forced costs so completely out of control that, despite the obvious risks, only the Government may be able to clamp...
...Third World War, Hackett...