Make People Spend Their Own Money

Nathan Stacy, M1, Class of 2022

In college, my parents paid for my gas. I was broke (still am), but it was nice to not have to worry about the price of oil barrels.

In college, I always drove my friends around. Didn’t matter where we were going – ½ mile or 50 miles, I was always the driver. Sometimes they would offer to give me gas money, and I’d always tell them to not worry about it.

These are related. I knew that I didn’t have to pay for my own gas. So it didn’t bother me to always drive. It didn’t bother me to turn down gas money. It wasn’t really my money, you see. It was, as I like to call it, “magic money.”

Magic money is a problem. Magic money leads to irresponsible spending. And boy, let me tell you, we’ve got a lot of magic money in healthcare. Need a prescription? Insurance will pick up 90% of the tab. Wonderful. Once-a-year physicals? Free. Wonderful. Once you hit that deductible? It’s like Oprah handing out free health services to everyone. Wonderful.

Everything is free if you aren’t spending your own money.

If people spend their own money, they spend smarter. They buy the generic. They search out the cheapest surgery option. They go to Truman Medical Center instead of KU to see the gastroenterologist. This frugality would put a tremendous amount of downward force on healthcare prices. We might be able to make healthcare more affordable, if we Make People Spend Their Own Money.

If people spent their own money directly on healthcare, health insurance could work like all other insurance – there for when something bad happens. Think about car insurance. You’re insured against the high cost of a wreck. Yet, you still pay for your own oil change. You search out the best deal for that oil change, because you have the incentive to do that. Additionally, it is a much more efficient system compared to you paying your car insurance company to pay your auto shop for an oil change. And why is it more efficient? Because People Spend Their Own Money.

If people spent their own money directly on healthcare, we would have more price transparency. Because people would demand it. Imagine if Chipotle didn’t tell you how much a burrito cost until after you ate it. People would be confused and upset, and would probably find themselves frequenting a place that openly displayed their prices, like a Qdoba. The same will happen for healthcare, if we Make People Spend Their Own Money.

Unfortunately for me, the magic money has run out. Something about growing up, getting my own place, my own dog, etc., has turned off the parental gas spigot. And it’s affected my choices. I’m wiser now. More frugal. And when I go to my yearly free physical next week, you can bet that I’m driving my girlfriend’s car.

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