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Throughout the misguided and misleading debate on how to “fix” the health care system in the United States, a fundamental fallacy continues to assert itself: that patients who require treatment are somehow like shoppers who want a new pair of shoes or a handbag.
This pernicious notion invariably emerges around the discussion of whether to tax high-cost insurance plans in order to help pay for this so-called insurance reform. The plan proposed by Senate Finance Chairman Max Baucus, D-Mont., would tax plans that cost more than $8,000 per individual per year or $21,000 per family per year. Now House Speaker Nancy Pelosi says the House is also considering such a tax.
For instance, any media account of the subject will include at least one statement like this one in a recent AP article: “Proponents of the insurance tax, which President Barack Obama has endorsed, say it would help to lower health care costs by encouraging people to become more cost-conscious health care consumers.”
This statement is a shorthand version of the theory that has come to be known as consumer driven health care.
This theory contends that an individual, already in the position of requiring treatment because his health is endangered or damaged, will, if faced with greater personal expense, somehow make not only different but better decisions about what treatments to purchase. Furthermore, these decisions will somehow lead to a lower overall cost of treatment for the patient’s condition.
The not-so-subtle point is that the patient is the one who is responsible for the high cost of health care. It’s all about the individual. It’s the health care industry application of the blame-the-victim subterfuge that is commonly employed when major players in our winner-take-all economic system find a need to divert attention from the true causes of the disasters they have wrought. It’s akin to the effort to assign equal blame for the sub-prime mortgage crisis to both the banks that set up the system of soliciting and re-selling bad loans and to the poor suckers who took out the loans.
Only this blame-the-victim scheme is even more reprehensible because the decision of what to do to restore health when you are sick is not like deciding what neighborhood to live in or how many bedrooms you need.
Consumer driven health care discounts the role of the physicians, hospitals, drug companies and insurance companies in the high cost of health care. It disregards the fact that physicians most often either make or greatly control health care decisions, and at the very least closely control the options presented to the patient. It disregards the considerations the physician may bring to the process, including the frequent need to over-prescribe and over-test to prevent malpractice claims, or the need to satisfy insurance company requirements. It overlooks the fact that some physicians over-prescribe because they are paid by the number of services they perform (the fee-for-service model). Yes there are significant savings (perhaps as much as $700 billion per year) to be had in reducing the number of tests conducted and other unnecessary procedures. But patient decisions are not the primary force behind the blizzard of over-testing. Nor can patients be held responsible for unnecessary insurance company bureaucracy and profits or artificially high drug costs.
And the patient-as-consumer propaganda also conveniently ignores the fact that it simply is not possible to “shop” for health care.
Consumers in most markets have few choices between health insurance companies. In most major metropolitan areas one or two companies dominate the market. Depending on what kind of insurance plan they have, patients have limited choice of doctors and hospitals.
Regardless of how big a list of doctors a patient can choose from, it’s getting increasingly difficult to even find a doctor who is accepting new patients.
In Boston, the average wait time for an appointment with a family physician is 63 days, according to a recent survey of 15 metropolitan markets by the national physician recruitment firm Merritt, Hawkins & Associates in Irving, Texas. The 15-city average was 20.3 days.
Boston’s long wait times may be a result of Massachusetts’ 2006 health reform legislation, which expanded health insurance coverage to nearly everyone in the state. If Congress expands coverage to tens of millions more people nationwide, more patients will be seeking appointments with the same pool of physicians. Wait times for appointments could increase dramatically. If a patient must wait 20 days for an appointment to deal with an illness, how many can be expected to wait even longer for treatment while they shop around.
If shopping for doctors is difficult, how about comparing and selecting treatments?
In many cases the generally accepted standards of treatment for a particular condition are well established and most physicians will follow the same protocols. Often is little choice to be had among types of treatments. (Unless you consider alternative medicine, of which most forms are not covered by insurance.)
Just as patients can’t really shop for product, nor do they have the option of shopping for providers or product on the basis of price. In most cases patients have no way to find out in advance what the cost of their treatments will be. To say that providers and insurance companies are reluctant to quote prices is an understatement. At best a patient may be able to obtain a range of prices that will be so broad as to be meaningless.
Providers may explain this lack of transparency by saying that they cannot be sure exactly what procedures will be needed. Insurance companies may simply state that they do no divulge proprietary contractual information for competitive purposes. Some of these reasons are simply maddening examples of a non-competitive market in action.
And some of this reluctance to quote prices is appropriate. No doubt some free market disciples who would reduce patients to consumers would likewise prefer to monetize the art of healing and the complexity of human health in terms of definable units with static values that are measurable and marketable. It’s simply not that easy.
So for reasons both good and bad, price comparison shopping in health care is simply not possible for most people most of the time.
Consumer driven health care makes even less sense when you consider the fact that some 75 percent of all health care costs are accounted for by the treatment of just five conditions, heart disease, diabetes, prostate cancer, breast cancer, and obesity.
As pointed out by Sen. Tom Harkin, D-Iowa, a member of the Senate Health Committee, in an op-ed piece earlier this summer, the real opportunity for savings in health care is that these five diseases are largely preventable and even reversible by changes in nutrition, physical activity, and lifestyle.
Unfortunately, Harkin adds, 95 percent of all health care spending is for treatment of illnesses and conditions after they occur.
Harkin’s point: improving health and saving money is more about prevention than how much you charge people after they are ill.
Consistent with Harkin’s contention, long-term studies conducted by major private employers have found that reducing the barriers to care by reducing or eliminating co-pays and deductibles for certain common chronic conditions actually reduced the long-term costs of treating those employees. They found that when faced with higher co-pays, patients tended to make worse health care decisions, such as postponing care or skipping routine care in order to save money.
The consumer driven model undermines the concept of the doctor-patient relationship that should form the basis of our health care system, where the doctor truly knows his or her patients and is involved not only in the treatment of their illnesses but in the maintenance of their health. This model’s proper functioning can only be realized in a regime of low barriers to access, or in other words, a system based on prevention of illness as a means to minimize costs, rather than a system of cost reduction based on making better decisions after one is already ill.
After all, even with the Internet, is it possible for patients to gather enough information to presume to know so much about medicine that they will routinely make decisions counter to the advice given by their physicians. If that is not what we mean by consumer driven health care, then why pretend that the patient is or should be primarily responsible for critical health care decisions, or that the cost of visits or procedures should play an important role in these decisions, no matter who makes them.
As for the high-cost insurance plans that are purported to epitomize this rampant consumer abuse of health care, who is it that enjoys these plans?
Is it highly paid executives just enjoying another perk? Perhaps in some cases. If this were the root of the problem, the rich can be taxed on income to pay for this so-called luxury. But the fact is that everyone should enjoy this level of coverage as a right and it would cost us less if that were so.
More likely these kinds of costs will be seen in companies where the work force includes a disproportionate share of older workers, or in union plans where the stress, difficulty and danger of the work wears down the health of the workers over time.
And who was it that conceived of this consumer driven theory in the first place? Well, it was the insurance companies.
The idea emerged and took hold over the last decade as insurance premiums took off. As employers became less able to shoulder the annual double digit increases and remain competitive, they began to shift more and more of the cost increases to employees in the form of either increased payroll deductions or larger co-pays and deductibles.
Insurance companies and consultants latched onto the consumer driven story to justify the shift, to make it seem a reasonable and effective strategy to combat the problem of rising costs. With its core message that consumers/employees were somehow responsible for the cost increases, it gave employers some cover for an unpopular practice, but more importantly it shifted the attention and the blame away from the insurance companies, doctors and hospitals and drug companies, where it rightfully belonged.
No doubt some employees have probably begun to doubt their own experience as a result of the propaganda and begun to question their own legitimate use of health care. Because it resonates so beautifully with the zeitgeist of a nation in thrall to free market ideology, where the individual is always responsible no matter the behavior of large corporations, its message may seem more cogent.
Certainly it has its followers, and promoters, inside the D.C. Beltway, where Congress is about to enact a misguided reform relying at least in part on this faulty and health-endangering premise.
Jeff Sher lives in the Bay Area. He can be reached at: email@example.com