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The call for Lawyers to join health-reform efforts was a not so subtle reminder to me about how "free" our health care market is currently. We can’t really pretend that the cost of services or the services rendered are determined by patients and providers. In fact, they are not even determined by a combination of patients, providers, and insurance interests.
Malpractice lawsuits, whether as threat or reality, skew a provider’s treatment decisions to the legal safe side, members of the Legislature’s Health Care System Reform Task Force were told Tuesday. That approach, in turn, adds to the amount of redundant testing and is a significant but so far unaddressed factor in the reform process.
The cost of malpractice-insurance premiums for providers also is rising rapidly, Rep. Gregory Bell, R-Fruit Heights, and an attorney, told fellow task force members.
We have developed a pricing and practice environment based on a staggering concoction of laws, medical knowledge, middlemen, and advertising. Patients may demand unnecessary services or medications based on what they hear from advertisements. They may also have unreasonable expectations regarding how flawless our medical system is or should be – in other words, they may feel entitled to compensation for unavoidable tragedies. Governments step in to define what "unavoidable" means by specifying standards of practice which may bear little connection to medical necessity. Insurance companies can, by choice or accident, inflate the costs by demanding standards of practice and levels of compensation that can’t possibly take into account all the factors that should define the practice of health care and the commensurate compensation for care.
Care must cost more when malpractice insurance rates rise. Prices will increase when the salaries and profits of insurance companies must also be covered in the process of receiving health care. Checks against unnecessary care will disappear when those receiving care are not sensitive to the costs of individual procedures. Medical decisions will be skewed when manufacturers provide kickbacks to doctors and advertise their wares directly to customers who have no medical background.
While we use the Brass Serpent (the Nehushtan) as the symbol for the field of medicine we might find it convenient to use the Hydra as a symbol of the cost of health care.
Hydra – photo by Craig Stephen
Somehow we need to slay this monster but while the sword of government may have a place in the battle it is not sufficient to complete the task – by itself the sword of government makes the monster more dangerous.
4 replies on ““Free Market” Health Care”
Unless government uses its power to ensure consumer freedom in medicine, it can only act as a gatekeeper and a redistributer — essentially the same roles played by insurers. As you noted, each player in the market takes a slice of the pie. Unless they are ensuring consumer freedom and innovation, they are not making the pie larger. This necessarily means that the net result is less or lower quality medical care overall than would otherwise be the case.
Gatekeepers may reduce overall costs on the surface by restricting services. That’s basically all they can do. But as you noted, they are actually part of exacerbating the problem of higher costs.
Too many people still seem to think that the strategy of cutting off the heads of Hydra will eventually work. Cutting heads is all the government sword can do.
We need to find our firebrand that will enable us to scorch the neck stumps so they won’t grow back larger. It seems to me that the only firebrand is individual consumer price-consciousness. Even with insurance consumers need to pay attention to the costs of services before opting in. They have to do it while realizing that they are making the choice on services – not their HMO.
I think the closest thing we have currently is an HSA.
That’s exactly why I’m such a big fan of HSA compatible plans. Of course, I’m all for finding even better tools where possible, but right now I think more people need to cone to understand the real value of the HSA – that it encourages consumers to become price conscious.