Monday, August 17, 2015

Missing the Point on Healthcare

The frustration continues as I listen to politicians argue about what they refer to as healthcare when all they are really talking about is insurance.  They act as if making the insurance affordable will solve the problems of increasing healthcare costs, the need for consistent quality and making the process easier for everyone involved.  The answers to those assumptions are:  doubtful, not likely and definitely not.

First, making it easier to pay for something never brings down the cost.  It increases the demand, which is sure to raise prices unless supply increases correspondingly. 

The government and insurance companies can insist that prices drop by setting limits and restrictions, but that may backfire on the quality side.  As this article points out, one current requirement that hospitals are rated on customer satisfaction is driving some hospitals to “focus on making people happy, rather than making them well.”

Additionally, insurance does not make it easy to do business with hospitals or doctors.  It establishes the dynamic of insurance companies standing between you and your doctor.  You go to the doctor and possibly pay a co-pay charge at the time of the visit.  Then you wait for weeks to receive an explanation (EOB) from the insurance company.  It tells what the doctor usually charges, how much they have agreed to pay, how much the insurance will pay and how much you owe.  If you disagree, you must negotiate with your insurance.  Otherwise you wait a few more weeks until the bill arrives from the doctor and hope it corresponds with the EOB.  Otherwise you negotiate with the doctor’s billing department.  (Don’t complain to the doctor because he or she is busy helping other patients and usually has no clue about the billing process or pricing.) 

This is unlike any other transaction in our lives.  We receive a service without any indication of how much it is going to cost and then wait to see if all the paperwork matches up.  Usually no one can tell you how much it is going to cost and you have no opportunity to “shop around” to other providers based on reputation, services or pricing.  In fact shopping around is discouraged, because the insurance company has negotiated contracts and if you go “out of network” or to a doctor not covered, even if that doctor is cheaper and more experienced, it will cost you more.  (They show you this right on the EOB.  The same is true of dentists, by the way.)

The answer is to reduce (not increase) the role insurance (both government and private) plays in healthcare, to open it up to the consumer (patient) in the same way we buy our food, electronics, auto repairs, airline tickets, haircuts, mortgages and so many other goods and services.  For all these we know the cost up front, our friends and neighbors share their experiences, and if we are not satisfied with any aspect of the transaction, we can go elsewhere without penalty.  Because of this ability to compare and shop around, the price and quality of these are in better control.

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