Something everyone can Agree on
Let’s take a look, shall we, at a plank in the Democrats election proposals. There are a lot of proposals in the mix, no mistake. One that I think both parties can agree on, though, is the astronomical price of health care. If you’re in a family that doesn’t have a horror story, you are indeed a lucky family. For most families however, healthcare is a number one worry. Healthcare for serious issues can bankrupt a family, pushing them out onto the streets, homeless due to the sky-high costs of trying to care for critically ill members.
Recently I read an article, https://www.marketwatch.com/story/the-us-can-slash-health-care-costs-75-with-2-fundamental-changes-and-without-medicare-for-all-2019-08-15?siteid=yhoof2&yptr=yahoo, by Sean Masaki Flynn, associate professor of economics at Scripps University. He proposes a two-step change to current healthcare that can be implemented quickly, and better yet, save a huge amount of money for everyone involved.
That sounds good, right? But we all know that if it sounds too good to be true, it probably is. It’s my contention that this may be the thing that proves to be the exception to the rule. The two steps, if you’ve read the above article, are to put a public price tag on each medical procedure, and to provide deductible security.
The first one is something everyone has complained about for decades. Even if you do have insurance, you never know how much the procedure costs overall or how much you will have to pay. Next door neighbors, same gender, same illness, could come out of the hospital with wildly different bills. I imagine you can name instances of this yourself from your own list of friends and family. That’s just crazy. Why should one person pay $2,000 for a procedure that their neighbor had to pay $10,000 for? Nuts, right?
Making all procedures carry a price tag means that a patient can shop around. If your local hospital charges $10,000 for a broken leg and the one in the next town charges $2,000, you’d go to the hospital in the next town. It’s a no brainer. The best thing about this is that we’re actually engaging in the competitive, capitalist economic system our Republican brethren and sisters claim is the best way to do business. Win-Win! Besides, doesn’t the secret price thing really chap your backside?
The deductible security thing was a new concept to me. However, Professor Flynn notes that the state of Indiana has implemented this policy and it is saving the state buckets of money. It works like this; a person pairs their health insurance policy with an annual deductible with a health savings account that is funded each year by the policy’s sponsor with an amount equal to the annual deductible.
In the case of the state of Indiana, the state funds the HSA. If you work for private industry, your company would fund it. Indiana has studied the result. People still get their preventative health check-ups, because there’s now money set aside in the HSA for them to do that. Better yet, people spend that deductible security frugally, because any unspent money goes to them at the end of the year. State employees changed their behavior in one example going to lower cost 24-hour Urgent Care Centers rather than higher cost hospital emergency rooms. They also opted for generic medications rather than brand-name. The state of Indiana noticed 35% lower health care costs, according to the article. That’s a huge savings.
Now think if you combine the two steps. Everyone knows how much a back operation is going to cost and they have the deductible set aside to help take care of the out-of-pocket costs. The article noted that Singapore has implement both steps and they believe they save an overall 75% of what their consumers had been paying for healthcare. Best of all, they have much better health outcomes than previously.
In addition to better health outcomes for everyone, there was a noticeable decrease in the size and costs of health care administration. Everything was simplified because there was no more back and forth between doctor offices and insurance companies. I’m sure your doctor can appreciate that. The competition also forces providers to lower costs and improve quality because consumers now know what every procedure will cost, and they can search out the best provider for them.
The article didn’t talk about drawbacks. I tried to think of some. Rural locations may still be left out of the picture as there aren’t hospitals in their areas. Indigent populations still need to be covered and the article does suggest that the government provide the deductible and insurance for that population. Overall, though, this sounds like an extremely practical idea and I, for one, would like to see more of our candidates pick this up and run with it.
Many thanks for Market Watch for publishing the above article and Professor Flynn for bringing it to the public’s attention. This looks like something everyone can get behind.
