At this point, thousands of pages of legislation have been devoted to reforming America's health care system. Though, as stated previously, only very recently has there been a primary shift away from access in favor of a focus on cost. Tomorrow, March 1st, Medicare is scheduled to reduce physician payments by 21%. Claims are going to be held for a couple of weeks to allow Congress an opportunity to enact another solution. Meanwhile, Doctors are being asked to refrain from dropping out of the Medicare program, on the hope of a fix. While all of this is going on, the American people have little clue to the real issue, the issue of price.
Free-market economics is predicated on the idea that people make informed choices about what they consume through prices, which signal the value of goods and services. Unlike the markets for books, cars, groceries and other goods, pricing for health care procedures is done behind the scenes by insurance companies, medical providers and the government.
Doctors, hospitals, medical device manufacturers, and pharmaceutical houses determine "list" prices, but hardly anyone pays those fees. Rather, they pay their portion of a rate negotiated by their provider and insurer. If the insurer is Medicare or Medicaid, government sets the rate.
Patients typically have little idea how much medical stuff actually cost and how much their insurance is willing to pay until they receive the bill in the mail. Doctors and hospitals don't have to compete to provide good care cheaply. While government is able to simply set price, private insurers and provider systems alike are in a race toward domination to market power in order to negotiate a “best price”.
Actuaries suggest the physician 21% payment cut in Medicare will cause physicians to want at least a 4% increase in payments for non-Medicare services in order to stay at break-even. But what the American people are missing in all of this is the fact that their precious health care access and cost is being controlled at a level way beyond their own ability to have an impact. There is a lack of transparency regarding real prices, a lack of accountability of providers to patients, and a lack of accountability of patients to seek out good values from bad.
This lack of transparency increases costs for those with and without insurance, particularly if you have insurance with large deductibles, co-payments, and co-insurance responsibilities. Expensive diagnostics, like MRI’s, CT scans, and cardiac caths, are lucrative for doctors and comforting for insured patients, who can ignore much of the high costs that ultimately get redistributed through higher premiums. Getting hit with a co-payment, a deductible, or a co-insurance payment does little to cause most patients to really ask the tough questions needed for market forces to have the desired impact.
Can Congress fix any of this? To an extent. Consumer surveys could be conducted and results posted by region or by provider number, looking for the best examples of value. Best practice guidelines could drive government benefit design, rather than only unit price, allowing providers to gain consent and balance bill the member for additional or substitute services at variance to the standard benefit design. Provider information could be made available to the consumer as to the frequency and under what benefit areas providers are most likely to request payment for services that don’t align with published guidelines. For example, older adults with expanding abdominal aneurysms are recommended to be followed every 6 months with either CT scans or ultrasound studies once the aneurysm is 4.0 cm in size. Some doctors routinely want to follow patients every 3 months, and some of these same physicians insist on more expensive MRI studies, when often less expensive ultrasound studies would suffice. Medicare can certainly make the consumers aware by refusing to pay for studies every 3 months and refusing to pay for MRI scans. However, if doctors and patients agree more frequent studies are warranted, let the member pay the difference and engage in the needed conversations with their providers, a necessary element of market force. This type of information will eventually empower the consumer and will push providers toward more standardized practices and prices.
There is no real hope of having market forces play a role in controlling health care costs until the market is empowered to act. In the early days of Medicine, before large third party government and private payers, market forces were in play despite the shortage of physicians and hospitals. While third-party payment schemes have played a huge role in the overall growth and development of the health care economy, it has gone too far in removing the consumer from what is an essential element of their own ability to function independently. Health care reform is about the prices and costs we pay, first and foremost. Empowerment of the individual consumer with information and personal responsibility is the path toward creating a solution that benefits the greatest number of Americans, at the highest value. Congress can help.
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The 13.9% of Americans without efficient healthcare is a high number. I say efficient healthcare because any American can go to an ER and get treated. Not efficient, but care nonetheless.
Must be the high premiums that keep these people from getting any kind of coverage. Well with a 9.7% unemployment it's not hard to envision most of these people being unable to afford individual/family health insurance much less being able to afford gas or groceries. If you take the 13.9% who don't have health insurance and take off the 9.7% unemployed you're really looking at 4-5% of the population without health insurance who could get it but don't. Seems to me we're cutting off the arm to spite the pinky.
Several people point to Canada or England as proof of a system that works. In truth it works great if you're not sick. Otherwise long wait for care occurs because the provinces control the money flow and set the prices. So you have several hospitals which can't perfrom surgeries any longer as the reimbursement isn't there. What used to be several choices for surgery have condensed and the Canadian health system still doesn't cover dental, vision, cosmetic, Rx or home care.
How far would someone in rural Nebraska need to go for a carpel tunnel surgery under this system? In a state with 50 facilities capable of perfroming this surgery under the Canadian system you wind up with 10? 8? less? and with a limited pool for reimbursement these facilities spend most of their profit trying to convince the state they should get most of the money. In a vicious political battle for funding, the patients will lose.
I totally agree that transparency would go a long way to weeding out the overcharging and underperforming. Would you rather pay the expensive doctor who runs battery after battery of tests to make sure you know exactly what you have or will have, or the doctor who has the lowest instance of follow-up care or re-admit to the hospital?
Seems to me the words of Spock ring true "The needs of the many, outweigh the needs of the few or the one" The majority of Americans don't need health insurance they need a useful expendinture of their money. In this case those things that money has little effect over - network of doctors - instance of reinfection - selection of services available close by, become concerns.
The president said something profound last week, "Food prices would be so much cheaper if the FDA wasn't there." I don't see why anyone should think that adding the government as the middle man between you and your doctor is going to lower prices. Which the CBO confirmed by stating the current plan on the table would raise premiums by 10-14%.
Maybe instead of funding a health plan, employers could instead fund a HSA for each employee and allow them to spend their money as frugally or as wastefully as they saw fit. That would be the kind of mass education that could rattle a marketplace. The free market at its best.
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