Excellent post. Just one sample:
A version of this notion came home to me not long ago when my wife’s employer announced that they were changing their healthcare coverage. It used to be that our entire family—my wife, daughter, and I—were covered under her plan, which provided great insurance for fairly low cost. Very old school. Then the employer announced that from now on any member of the family—i.e., me—who was eligible for coverage from their employer would have to use that insurance first. But, and here’s the kicker, if that insurance didn’t cover some particular procedure or doctor’s visit, then my wife’s insurance would cover it. So now, on certain procedures or visits, I have to submit two claims: one to my insurance, and then, once they refuse to provide coverage, one to my wife’s insurance. And then, because we have one of those health care accounts that makes the right so giddy, I can submit a third claim to that company (in the event that my wife’s insurance does not provide full coverage).
One procedure, three claims, all to get what, in more mature democracies, would be mine by right. That’s some freedom.
That comes by way of Robin’s post at Crooked Timber. Like Robin, “I’m not interested in arguing here over what was possible with health care reform and what wasn’t; we’ve had that debate a thousand times.” I too would like single-payer. I too think it would just be radically simpler. You pay your taxes, you get your services. Done.
I’m feeling this lately in particular. Our insurance has decided to emphasize “consumer-directed health care,” which means “making the user of health insurance pay more attention to how much things cost.” (We’ve also been offered a new, low-premium, higher-deductible health-insurance plan, paired with a health savings account. An HSA is like a 401(k) for your medical expenses. I hate 401(k)s and love Social Security for the same reason that I hate HSAs and love Medicare.) Two things to note about this:
- Most of us are not responsible for most of this country’s health-care costs. Getting me to buy a generic medication rather than a name-brand one is just not going to solve any problems. So when a health-insurance company tells me that it’s “consumer-directed,” that’s when I reach for my revolver.
- There are numerous points of negotiation in the health-care system. There’s the insurer negotiating with the provider (refusing to pay for certain services, say). There’s the insurer negotiating with the health-services consumer (refusing to cover certain procedures). There’s the health-services consumer negotiating with the provider (insisting on generics, or opting for a CAT scan at a scan center rather than at a hospital). And then there’s the government interacting with all the other parties. “Consumer-directed health care,” as I understand it, only works on the provider-consumer side. I’m not convinced that there’s very much negotiation to be had there.
Health care in this country costs more because it’s more expensive. This is not a tautology. For a given unit of care, we pay more for it. You can break down costs in various ways, but basically (total health care cost) = (cost per unit) times (number of units consumed). We don’t consume more units of care; we use hospitals less, in fact. We just spend more for a given unit of care than other countries do. One very obvious way to pay less for a given service is to change the balance of power between the provider (the doctor) and the insurer. If there were only one insurer out there that paid for all of your medical services, it could strong-arm the doctors. This is not rocket science; it’s how Wal-Mart offers low prices. It’s how Medicare offers low prices.
So whose problems is the insurance company solving when it makes me negotiate more with my doctor? It’s not solving the health system’s problem as a whole. It’s not likely to lower my prices. A priori, my assumption is just that this is a disguised way for the insurer to make more money, by covering a smaller fraction of my costs with Obamacare’s blessing and with a friendly pat on the back while they tell me I’m on my own. If we had perfect price transparency, then maybe our negotiating power would have some teeth. And maybe Obamacare has some innovations to push in that direction; it certainly is filled with experiments that may really pay off. And Medicare is putting price data for individual providers up on the web. It’s not consumer-friendly at the moment, but it’s a start. With that sort of transparency, maybe we could actually make some use of “consumer-directed health care.” Even then, I’d still prefer that someone else — someone who spends all his or her time working to get good deals on health care — do this for me. Someone like my employer, say. But then, why would my employer want to do this? My employer is good at building software; there’s no reason to expect that it’s any good at judging which tests the doctor should give me. Let’s centralize the bargaining.
Incidentally, I’m also convinced that, within my employer, everyone is going to end up on bronze plans, or what would be called bronze plans if we were buying them through the exchanges rather than through our employers. Imagine that you have a choice between a high-deductible, low-premium plan and a low-deductible, high-premium plan. People who believe that they’re not going to need much health care (the young, the healthy) will opt for the high-deductible plan. Those who are more worried about their health will opt for the low-deductible one. This will lead to something that looks a lot like the classic adverse-selection death spiral: since the high-deductible plan is getting the healthy people, the low-deductible plan will have higher costs this time next year, which means it’ll have to raise its premiums. But then more people (now a somewhat sicker group) will rationally decide that the low-deductible plan doesn’t make financial sense for them, and will opt for the high-deductible plan. And so on.
I don’t know how much of this was planned ahead of time, but it seems perfectly obvious now. The cynical but, I’m afraid, probably correct take on it is that we now have two choices:
to be ground down a bit at a time by technocrats who either won’t admit to or do not understand the ultimate consequences of the policy infrastructures they so busily construct or to be demolished by fundamentalists who want to dissolve the modern nation-state into a panoptic enforcer of their privileged morality, a massive security and military colossus and an enfeebled social actor that occasionally says nice things about how it would be nice if no one died from tainted food and everyone had a chance to get an education but hey, that’s why you have lawyers and businesses.