Myth # 2 – You can cut costs by cutting the price you pay for healthcare services:

Let’s go with an analogy on this one. Let’s say we buy carpet from the same people that tell us how much carpet we need to buy. We elect to reduce the price we are going to pay per square yard. Are they going to sell us a) more carpet b) the same amount of carpet, or c) less carpet? If you picked anything other than a) then you’re a moron.

The problem is the fee for service model encourages over-utilization and no, it isn't the result of defensive medicine driven by the fear of lawsuits. Not that we don't need litigation reform (we do) but until we eliminate the fee for service model and go with something based on diagnosis we're not going to get a handle on costs. Either that or pay physicians a flat salary.

The bottom line is that as long as the people providing the carpet are paid by the yard you're always going to get more than you really need and anyone that claims otherwise really is a complete moron.