Health care: If it’s free, why not?
One of the unfortunate aspects of the way we manage health care in this country is that many people who can’t (or don’t wish to) spend money on routine care put it off. They then sometimes end up in emergency rooms with urgent issues.
Yesterday, I was working with an amazing group of women CEO’s, one of whom runs a company that manages care for companies, reducing their costs by overseeing the way medical expenses are used (for instance, seeing a general physician rather than a specialist, which statistically has been shown to cost 30% more). She pointed something out to me that I hadn’t really thought about, which is that if everyone is insured and has ‘free’ access to health care, that utilization rates for all kinds of procedures will dramatically increase across the board. In other words, cost projections based on current utilization rates are likely to understate actual future costs by a wide margin.
What a conundrum - on the one hand, you certainly don’t want people failing to look after themselves properly. On the other, how can you possibly plan for dramatic increases in utilization of medical services without some kind of baseline to examine? I guess the Massachusetts example will continue to be as good as we can get for the time being.
Another issue that I find absolutely baffling is that it is nearly impossible to get a price for medical services in advance in this country. Among the oddities is that the same service is charged differently depending in some cases on the insurance status of the patient—less for those without insurance, more for those who have it, in order to compensate for losses on the uninsured. I can’t think of any other market in which the price of a good is so opaque.
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- Posted: Saturday, July 25, 2009
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Rita, nice post. You write that it’s impossible to get a cost of service in advance but the paradox is the service scope varies too! That article in Economist brings comparative analysis (http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13899647) showing that spending more (in US) doesn’t mean getting healthier. I’m compelled by the reasons and thing that the if any reform is required in US it should be on the way we ask, pay, and measure the output of medical services, read - reforming the incentives of the players. I feel that adding that argument and agreeing that the system is flawed and required some tune-ups will solidify the anti-Obama camp and convince the opponents requiring a change based on the increasing cost of the services.
I do agree with this article, it is our basic need which should be have to each and every person.
Thanks folks for the ideas. That Economist article is fascinating!
I don’t see how you can have a functioning market for health care until you have some way of trading prices and quality. It’s also interesting to me that in the segments of the health care business that are not regarded as ‘necessary’ such as Lasik eye surgery or orthodontics, providers compete for customers, prices have come down dramatically over the years, quality has gone up and a market has essentially been created.
You are right - It always seems like it takes someone, or a family, an emergency room visit before they decide to get healthcare. Hopefully things will start changing soon.
Your math my be sightly off. Your conclusion is based on a scarcity model. When people have enough they don’t take more than they need. Example is farmers giving way produce, many want to pay something even though it is free. We need to teach a different model - this is not socialism, this called balance. With no competition the insurance industry never takes any real risk of losing the principal only the reduction of the interest. they always buy insurance from someone - usually the government, to underwrite any looses that would exceed the interest not the principal. The insurance industry needs a wake up call, Airplane pilots make less than air traffic controllers, and your local automobile mechanic. Who is really taking the risk - they are in the same plane. As someone that goes to sleep praying I am healthy when I awake because I don’t have insurance (lost job) It’s time for the protected market of insurance melon to be split open on the ground of life and if sprouts so be it. No one gets a protected market forever - we don’t make buggy whips any more.
Its true that most people don’t do anything until there is a problem. It is unfortunate that is the case but it is just human nature.
Here in Canada we have our own issues with the health care system. Many take advantage of the loopholes and leave other tax payers to pay for it. There are downfalls to every plan I guess.
Great topic. We should all be aware of this. Thanks for sharing.
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I am trying to think of a title for a multidisciplinary studies major that I have come up with concentrating in health care…I am staying away from the clinical aspect (aka biology, chemistry, etc) but am taking anatomy and basic clinical lab science, and am staying away from management and administration. Any suggestions for a title for my major?
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I with you agree. In it something is. Now all became clear, I thank for the help and I hope to see more such articles.
