What if automobile repair shops had to function like a medical facility?

What if automobile repair shops had to function like a medical facility?

Assume you are the owner of an automobile repair facility. You carefully calculate your prices based on your overhead costs, employee wages and benefits, part prices, and other miscellaneous expenses.

At the end of the month you have receipts of $100,000 and expenditures of $94,000 which leaves you with a profit of $6,000. Enough to pay your bills, feed your family and a little left over for savings and entertainment.

What would happen if the government dictated how you managed your business; just like health care? Presently 13 percent of people in the United States do not have health care insurance. Many within this group are young and choose not to have insurance. A little less than half are in the country illegally, and the rest just don’t have coverage for a variety of reasons.

Medicare and Medicaid, both government managed insurance programs presently reimburse health care providers at about 65 percent of cost and represent about 35 percent of doctors clientele.

Let’s apply these numbers to your automobile repair business. Thirteen percent of your customers will not pay for their car care; in this case the total will be $13,000. Thirty-five percent of your customers will reimburse you $22,750 for $35,000 worth of repairs for a net loss of $12,250.

Using the government model your monthly receipts will be $74,750.

What do you have to do to remain in business? You could layoff some employees or raise your prices. You decide to raise your prices; by doing some simple algebra you determine that you must increase your prices by 34 percent to stay in business. The oil change that was $35.00 is now $46.90, and the brake job that was $300.00 will now set a customer back $402.00.

People: Health Care is broken not because of the business model. It is broken because government is passing laws that force businesses (medical facilities) to give away their services.