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As further evidence that insurance is a huge reason prices are as high as they are, consider this.
I live in an area that has a large population of Mennonite and Amish (collectively referred to as the Plain Community). Most of these people do not have insurance, either because they are self-employed farmers or because it conflicts with their religious convictions, and they are among the few groups who are excluded form the Obamacare statutes due to this religious objection. As a result, they pay out of pocket for healthcare.
The primary hospital in our area found that the Plain Community had set up a transportation network to shuttle members to a nearby state in which elective procedures (like your knee replacement example) were less expensive than local providers. They actually got rides to other states to pay less money for their services. As a result, the local hospital created a cost sharing mechanism that allows card-carrying members of these churches (yes, they created ID cards for this specific purpose) to get a discount on local services to the tune of 45%.
Again, the take home being that people WITH insurance accept higher priced care because they are not actually paying the bill, they are paying their premium. Those without insurance make more frugal choices, and as a result the market prices lower to attract business.
I live in an area that has a large population of Mennonite and Amish (collectively referred to as the Plain Community). Most of these people do not have insurance, either because they are self-employed farmers or because it conflicts with their religious convictions, and they are among the few groups who are excluded form the Obamacare statutes due to this religious objection. As a result, they pay out of pocket for healthcare.
The primary hospital in our area found that the Plain Community had set up a transportation network to shuttle members to a nearby state in which elective procedures (like your knee replacement example) were less expensive than local providers. They actually got rides to other states to pay less money for their services. As a result, the local hospital created a cost sharing mechanism that allows card-carrying members of these churches (yes, they created ID cards for this specific purpose) to get a discount on local services to the tune of 45%.
Again, the take home being that people WITH insurance accept higher priced care because they are not actually paying the bill, they are paying their premium. Those without insurance make more frugal choices, and as a result the market prices lower to attract business.