There just seems to be a tremendous mental block people have about paying cash for health care. Megan McArdle is surprised at how strong this bias is in some of her readers. I'm not, as I see it in my wife and friends all the time.
Several years ago we switched to a high-deductible catastrophic health care policy. We save a TON of money with this policy, such that year in and year out, even with fairly high out of pocket expenditures, our total health care expenses have been lowered.
Generally, I go ahead and wash all of the charges through the policy so I get credit for them against the cumulative deductible. But since we have never hit the number, I am increasingly less attached to this approach. Particularly since a number of doctors and other providers are offering cash discounts now for bypassing insurance and paying cash.
Here is an example -- my son has had some elbow pain pitching lately, so seeing all the kids who are having to get Tommy John surgery before they are out of high school, we decided to make sure everything was OK. We took him to a GP who specialized in sports medicine and works with a number of MLB pitchers as a team physician to the Brewers. For cash, he charged me $50 and spent nearly 30 minutes with my son. Then he sent us downstairs for some x-rays of his elbow, and the radiology group there, again for cash, charged us $35 total for three x-rays. There are people who pay more for a pedicure.
Nothing is ever going to improve in health care costs until individuals take more responsibility for the cost-benefit tradeoffs of the services they receive.