For a variety of reasons, physicians in the U.S. typically can’t charge for their services what they think the market will bear.
Take Medicare in the U.S., for instance. Do you know the difference in payment for the same service by the worst and best doctor in town? There is no difference; they get paid the exact same amount by Medicare. In a free market, the best doctor would command a higher fee than Medicare pays, and the worst earns less. If you don’t want to pay the higher fee, go to the cheaper doctor.
So Medicare limits what the better physician could earn. And it rewards lazy, bad doctors. To compensate for the limits on revenue imposed by Medicare and other major health insurers, physicians look for other ways to increase their take-home pay. One of many ways is medical lab testing scams.
Larry Husten has been doing great work covering the recent medical lab testing scams. Click the link below for details. A sample:
“I have received multiple reports from industry observers, doctors, and patients about the new and troubling schemes. These new scams are all based on avoiding, or at least appearing to avoid, the key mistake made by HDL: paying doctors directly for using their services. That is a kickback. The new schemes use a variety of intermediaries– phlebotomy services, physician owned labs, and MSOs (management services organizations)– instead of direct payments. But in the cases I’ve heard about it is completely clear to everyone involved that the doctors are being compensated for purchasing these lab tests.”
Source: The Wild West Of New Laboratory Scams
Steve Parker, M.D.
PS: If you think the entire U.S. medical healthcare system is chaotic and riddled with corruption, I won’t disagree with you. Do your best to stay healthy and stay out of the system.
Paleo Diabetic 
And of course private medicine is sooo better and soooo less corrupt.
Gimme a break. I thank God we have the National Health Service in the UK. Yes it’s corrupt like private medicine with all its scams but at least in the UK you don’t die because you can’t afford the treatment for life threatening illnesses such as cancers.
Yes, Frank. The U.S. healthcare system has many faults.
Cancer patients here generally do get care regardless of ability to pay. They end up with Medicaid, which is a government program that pays for health insurance. Unfortunately, the patient may have to liquidate all their assets (i.e., spend all the money they can rustle up) before they qualify for Medicaid.
I don’t think you “die” in the US. ERs must take you. But I agree the incentives are backwards. Doctors should not want to skimp on treatment because they wont get reimbursed.
Dr. Parker, I agree with you that the government should not interfere in the market and set the price. Demand and supply should determine the correct price for medical services.
However, demand and supply should also establish the number of doctors, restricted by the AMA, creating a low supply of doctors, interfering with the free market and enabling them to charge outrageous fees,
Hi, johnn.
The freest market we have in U.S. medical care is in areas that don’t aren’t paid for by insurance or the government. Cosmetic plastic surgery and Lasik eye surgery are examples. Compared to similar surgeries paid for by insurance, those procedures are probably cheaper by a factor of five or 10. IIRC, when Lasik and radial keratotomy hit the scene 20 years ago, it was $2000 or more per eye. Now, I think you can get your eyes done for $500 each. That’s the power of free markets.
-Steve