There has been a horrific "evolution" in medicine over the past 40 or so years. There was a time that your medical insurance provider looked at what you needed and actually did try and do something.
In the late 1960's the corporate "big boys" of medical insurance companies began to see that technology was moving ahead faster than their ability to react to it. In order to have time to figure out if the new procedures were beneficial they started coming up with a classification called "experimental" which placed new procedures into a "gray area" and procedures placed into this area were not covered. In the early days most of these procedures affected cardio-pulmonary and in some cases new treatments for cancer. What was discovered at that time was that, "hey we can collect a premium from the subscriber, and we don't always have to pay for care." All we have to do is to start declaring everything we don't like to be "experimental". What started out as something that was fair evolved into a method of dodging payment and leaving the insured "on a limb".
By the time that we had entered the 1970's another factor came heavily into play.
The motto became:
It does not matter what the MD charges, nor does it matter what the patient needs, we pay a flat fee for everything and we don't care! We pay a sliding fee based on a percentage of the charges for the office call.
When my Stepfather who was a practicing MD passed away suddenly back in 1984 I inherited the joy of clearing the books and closing the medical practice. This gave me an entire history of this evolution.
#1. In 1970, my stepfather charged $35 for an office call. The average insurance company would pay $7.35 to $7.50 for that office time. If the patient required injections the insurance carriers would pay about 75 cents for the syringe and they would pay on average about $2.00 for the injectable medication. Depending on what it was this could be a profit or loss based on the cost of the medication. What we now had was the beginning of a trend where insurance carriers were starting to force MD's into donating medical care to those who were insured.
Now, if that same MD charged $150 for the office call or time slot he was paid about $35-45.
The next problem was that instead of submitting a simple written report to an insurance carrier the carriers wanted to cut their own costs and add to those of the MD. How they did this was to come out with huge complicated insurance "code books". Each company or carrier would have a set of procedural codes which would represent the procedures.
This accomplished a number of things. The first was it completely nuked the overhead of your MD. In order to function your MD and your local hospital had to hire huge numbers of people to sit for hours with code books. On occasion, it took as long as 2 hours to dig through these early code books to properly bill the carrier for one single patient because these codes had to be itemized. In addition, if one were to omit a digit from the code or transpose a code number they would not deny payment for the single procedure, they would deny the entire claim. This allowed these same companies to hang on to their money and to legally deny claims based on various clerical errors. By the 1990's most decent MD's were paying about $60,000 per year in order to deal with insurance carriers. This was two billing technicians working full time to manage the insurance billing for the medical practice. The MD then has to recover his costs on this so what happens? He is forced to again raise his fees to the patients and carriers.
Though there are exceptions, the income level of the average MD is in the current decade far less by percentage than it was twenty years ago.
The overhead today on a medical practice dealing with Insurance is absolutely astounding and this is part of the problem. The overhead was created by the very industry who was trying to supposedly "cut" the costs.
The next group that made a mess were again insurance carriers. These are the people who are the providers of malpractice coverage. In the mid 1970's California Governor Edmund G. "Gerry" Brown (in some circles Governor Moonbeam) completely ignored the plight of the MD when across the board at the same time every California malpractice carrier raised the cost of malpractice coverage. The average GP (General Practitioner) at that time went from about $2,000 per year to about $20,0000 per year. The MD's and surgeons practicing Neurosurgery and those in the field of Anesthesiology went from about $10,000 per year to nearly $100,000 per year. I was there for this escalation and though "Governor Moonbeam" was warned by MD's of the effects that this was going to have on medical costs for the people living in Southern California he flat refused to take action. California was only the beginning and these same things happened nationwide.
In Canada, a Surgeon making a salary of $286,000 per year is actually after taxes doing far better than the U.S. Surgeon. The U.S. Surgeon on paper will look like he is getting very wealthy. The figures you hear are for GROSS income and not NET income. The overhead has now reached the point that fewer and fewer people from this country are interested in studying medicine. It is for this reason that you are seeing a huge influx of foreign trained MD's.
A young MD is really in trouble now. These men make their exit from medical schools and are all horrendously in debt. They need the money to pay the loans. In addition, the average cost of setting up an "office practice" these days is about $350,000.00.
The Canadian MD does not pay malpractice insurance "out of pocket", the Canadian MD under socialized medicine has an overhead that is about 20% of that of the U.S. MD. Under a single pay system his paperwork is far more simple and he has far fewer problems.
There is ZERO medical systems without problems. They all have some problems. The business of medicine in the United States has evolved to where in all cases the profit
and loss statement is placed ahead of the welfare of the patient. The medical insurance carriers are responsible to their stockholders so they short patient care and dump costs to the MD's. The MD's are caught in the middle and have to pay both their staffing and billing costs as well as other overhead. The whole thing right now places the profit first and the patients needing care last.
There is no simple fix for this. As long as the structure of the system remains the same there is no manner in which it can be fixed or repaired. The only way to fix this is to scrap it and do something else.
scale. 
