FIXING THE GAME

Ideas from the insurance industry and its supporters

Fixed Rule:

In other words, you should be personally responsible for bringing the skyrocketing cost of health care down.

This is the ideology behind so-called “consumer-driven” health care that the insurance industry and others are pushing through "products" like high-deductible plans and health savings accounts.

Jeff Jacoby’s column in the Boston Globe on October 19, 2008, exemplifies this believe. He claims that “with someone else picking up the tab, Americans got used to consuming medical care without regard to price or value.” Jacoby thinks that is why prices for health care keep rising. His vision of health reform is that if “millions of empowered consumers began focusing on price, price competition would flourish.”

Jacoby, and the others like him, believe health care is just another consumer good. They want you to shop for health care the way you would a refrigerator or sneakers. But when was the last time your life depended on your choice of sneakers?

As Ezra Klein put it in his American Prospect blog:

“This sentiment is widely shared, and very weird. Think of how an individual consumption decision traditionally works. You, the consumer, decide you need a desk lamp. You make a decision about where to purchase a desk lamp. You transport yourself to the Desk Lamp Emporium and compare different desk lamps. They're too expensive, or too ugly, and you have overhead lighting anyway. You don't buy a desk lamp. Maybe you'll purchase one later.

“Now think of how an individual consumption decision in health care works. You, the consumer, go for an annual check-up. You feel fine. Your doctor says that you exhibit various risk factors for heart disease, and he'd like to schedule something called a "coronary angiography." He'd like to do this because it's possible that doing it will keep you from dying. You say okay. You endure the invasive and unpleasant and expensive test, because you don't want to die. The results return, and are explained to you by a cardiologist. He recommends double-bypass surgery. Otherwise, he says, you might die. You don't want your sternum cracked open and a surgeon's hands deep in your chest, but you accept the diagnosis because you really don't want to die. Health care is not a normal good.”

And just who is it that will choose the "cheaper" doctor, hospital or treatment if their life depends on it? If you bring it all down to costs, people will usually assume more expensive is better. “The specialist who charges the most must be the best and so I want to see that doctor.” The most expensive is not always the best, but how are we to judge that?

But forget common sense—research shows this doesn’t work. A 2007 report from the National Bureau of Economic Research found that patients who are asked to pay more of their health care costs deferred, neglected, or opted-out of doctor’s visits and drugs when the price got too high. This short-term cost reduction led to long-term increases, as their hospitalization rates were significantly higher than other patients suffering from chronic diseases. Immediate savings ultimately led to a greater—and otherwise preventable—use of more expensive care.

Fair Rule:

• A public alternative to insurance company coverage that is accountable to us.
• Fair regulation and oversight of insurance companies, with government as a watchdog.



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