Health Care rationing is in everyone’s future- The only question is whether or not the rationing will come via nationalized/socialized medicine (a “Single Payer” system like Medicare), or if the health care rationing will come via self-discipline (Consumer-Driven or High Deductible Health Plans).
I’ve read a few decent books touting the virtues of High Deductible Health Plans with Health Savings Accounts. The first book is “Skin in the Game” by McKesson CEO Paul Hammergren. Hammergren’s key point is that there is zero transparency in true health care costs under the current system, and that consumers have no ‘skin in the game’ unless they are on a high-deductible health plan or consumer-Driven health plan.
The second book is “The New Health Insurance Solution” by Paul Zane Pilzer- which is a pure blue-sky libertarian’s encouragement for us all to go on Consumer-Driven health care plans. An entertaining read, but not as informative as the first book.
I agree with Hammergren’s recommendations, but the Achilles Heel with Consumer-Driven or High-Deductible health plans is that consumers (you and I) have zero visibility on health service costs until we receive the bill.
To illustrate my point, let’s compare how purchasing your next TV would go if the process was run like our current health care system in the States…
Scenario: The projector bulb on your circa-2005 Sony WEGA KDF-E42A10 42-inch rear projection TV has gone dim. You are trying to price out the option of replacing the projector bulb vs. purchasing a new TV. You get in the car and head to the local big box electronics retailer…
Greeter: “Hi, welcome to BuyBest! How may I help you?”
Me: “The projector bulb on my Sony WEGA 42-inch TV has gone dim. I’d like to replace the bulb or buy a replacement TV set. I attempted to find some info about replacement bulbs or new TV sets on your website, but there were no components or prices listed. May I see a list of new TV sets in the 42-inch size?”
“Sure. We can help. A hardcopy of our ChargeMaster (pricing) catalog is available if you request it in writing from our corporate headquarters. You will need to allow 2 weeks for delivery. In the meantime, please hand me your employer’s insurance card and have a seat in our waiting area. Who is your employer?”
“I work for CitiBankOfAmerica.”
“Oh, that’s good- they have a good TV purchasing insurance plan. Lucky you don’t work for Bank of Communicable Diseases- I’ve heard bad things about their plan.”
30 minutes later…
Clerk: “Ok, Steve from the TV department will help you now, please follow him to the back of the store.”
Steve: “Hi, I’m Steve, How can I help you today?” (I make a mental note that Steve is wearing a BuyBest Employee ID card that has his photo on it).
Me: “I’d like to replace the projector bulb on my Sony WEGA KDF-E42A10 or purchase a new TV set.”
“Wow, lots of choices. We probably have the right projector bulb available, and here are some of the TV sets you could buy to replace your old one.” (Steve points to three TV sets that have black tape over the manufacturer name and model numbers).
“How big are these TV sets? Will they fit in the cabinet built in to my wall?”
“They should be the correct size.”
“Are they LCD or Plasma? What are the reliability ratings on each TV?”
“You can go look that up on the internet- There are consumer forums online where our products are rated by consumers like you.”
(In case you have not guessed, my patience is beginning to wear thin. I opt to replace the bulb and keep my old TV, since my old TV is meeting my viewing demands just fine right now.)
“Steve, I think I’ll just buy the the replacement bulb for now and take my chances with the old set for a few more years.”
“Ok, Here’s the replacement bulb. Please check out with the clerk on your way out.”
…2 weeks later, I receive the ‘Statement of Benefits’ in the mail from my insurer, cataloging the charges for my services at BuyBest.
There is a charge of $52 for the replacement bulb (a discount of 30% off the retail price of $75), plus an additional $100 charge for the services of “Television Repair Consulting Providers, LLC”. It appears that Steve (who wore a BuyBest employee ID card) was actually an ‘Out-of-Network’ service provider working inside the BuyBest ‘Preferred Network Provider’ store!
How Bass Ackwards is this? Would you put up with buying a new TV in this manner? No Way!
But that’s how we purchase Health Care in the States- You’re not the consumer, your insurance company is. This is the fundamental flaw in our health system- Zero transparency to the consumer.
Yes, I understand that some Health Care decisions are not like the choice to repair or replace your TV- Life presents emergencies when you need a shot of Anti-Venom right away to treat the rattlesnake bite you received while hiking the canyon near your house.
However, with most of the health services we purchase, we have a choice- But little or no information upon which to base the choice.
Someone needs to upset the apple cart and develop a ‘ChargeMaster’ app- kind of like the ‘GasBuddy’ app for gas prices at local gas stations. The first person to develop this application- Where health care consumers self-report prices by procedure and provider (and somehow keep the data anonymous)- Will strike it rich.
Other developments in health care technology (like the Lab-on-a-Chip developments mentioned in the book ‘Abundance’) might reduce future health procedure costs from the top-end, but our health care system needs to become a true free-market in order for free-market forces to reduce costs.
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