Holiday Shopping for Health Care

With Black Friday done and out of the way, one cannot help but wonder if any Americans were bargain hunting for health coverage.  After all, barring exigent circumstances, in the current health care market, shopping around to compare prices seems like an economically sensible thing to do.  Individual health care plans have been charging higher and higher premiums; the rate of uninsured Americans is increasing, and those who are insured increasingly face greater deductibles and out-of-pocket expenses. Price can make a real difference.

One uninsured women in Seattle used PriceDoc.com to comparison shop to see which health care providers in her area provided the cheapest gynecological exam.  She said that the only real comparisons she made while searching for health care was price.  In the end, the Seattle woman was able to access what she considered to be quality care at a price she could afford.  But there is that old joke about the perils of looking for bargains in parachutes and brain surgeons to consider. A sheer price comparison implies fungible service.

Congress members are currently in the process of doing their own bargain hunting for health care that won’t break the country’s bank.  While Republicans are said to fear that insurance premiums will increase under the proposed health reform models– partly due to increased taxes on insurers, Democrats counter that the strict regulations to be imposed on insurance companies will drive costs down.  Democrats further talk about the benefits of the health care exchange model, in which the individual market will not be able to deny coverage or charge higher premiums based on preexisting conditions, age rating, or gender rating.  The Center for Studying Health System Change says that these rules, if set in place, will directly lower the premiums that people with medical problems and women will pay.

The Obama Administration has commended the House and Senate bills for incorporating cost-cutting tools.  As a guideline for measuring the cost-effectiveness of the health reform proposals, the Obama Administration has identified four pillars– as found in Ronald Brownstein’s “A Milestone In the Health Care Journey.” Those pillars are:

1.      Taxes on high-end health insurance plans;

2.      Payment reforms that focus on incentivizing doctors to provide quality, coordinated care;

3.      An independent Medicare commission to contain costs; and

4.      A bill that is at least deficit-neutral over the next ten years.

The House and Senate bills incorporate each of the pillars to varying degrees, with the Senate bill thus far the most inclusive.  Congress members say that such principles–and specifics– will be heavily discussed in the coming weeks of debate.

While Americans wait for reform to ring in easier times, they may, however, be left to fend for themselves.  In case you were hoping to give the gift of better health care to a loved one, check here to compare plans, and use these helpful tips to save money on health care.  And don’t forget to schedule necessary appointments to  use what’s left of your current health care allowances before benefits get taken away by the start of a new year!

“15 Years or 7 to Pay Off Your Debt. . .”

I have been watching the Alex Gibney documentary film version of Maggie Mahar’s book Money-Driven Medicine. It’s fascinating, and I’ll definitely do a few more blog posts on it. For now, I’d like to reflect on a quote from early in the film, from a Dr. Berwick who’s been a keen observer of the US health system. He notes that physicians who are specialists do lots of compensable and specific procedures, and therefore usually earn much more than primary care doctors, leading to an artificial glut of specialists. I’d known this for some time, but Dr. Berwick makes the fact particularly compelling by comparing the concrete choices faced by med students: “15 years or 7 to pay off” their educational debts. It’s no wonder there are so many specialists.

The quote reminded me of Jesse Larner’s recent idealized “health care speech” for President Obama, which would promise a “publicly paid medical education for qualified medical students, researchers, and other health care workers so that the profession is open to all who are bright and dedicated, regardless of financial resources.” Just as our tax code pushes the average citizen toward unnaturally high levels of debt via the mortgage deduction, medical education financing currently is biasing physicians toward unsustainable debt loads that ultimately drain the public weal by fueling an entrepreneurial mindset in a profession founded in the public interest.

The US already has some limited loan forgiveness programs for physicians who work in underserved regions. It is time to expand these subsidies to cover more physicians working in primary care.

More Institutional Health Economics, Please!

Elinor Ostrom with Indiana University president Michael McRobbie at press conference announcing her Nobel Prize. Photo by aschweigert via Flickr

Today’s Nobel Prize award for institutional economists Oliver Williamson and Elinor Ostrom is a welcome step toward methodological pluralism in the profession. Both have looked outside markets to understand the organization of economic life. Ostrom is not even an economist–she is a political scientist by profession. As Bob Shiller observes:

This award is part of the merging of the social sciences. Economics has been too isolated and too stuck on the view that markets are efficient and self-regulating. It has derailed our thinking.

According to the NYT, “The Nobel judges, in their description of Mr. Williamson’s and Ms. Ostrom’s achievement, said that ‘economic science’ should extend beyond market theory and into actual behavior, and the two award winners, in their empirical work, had done this.”

There is a great need for more of this type of work in health economics. Joe White’s Markets and Medical Care: The United States, 1993–2005 is one good exemplar of needed work here; he eschews “discussions of how economic theory can be applied to medical care production and delivery” and instead “focuses on ‘the market’ in its actual, not theoretical, form, as it existed in the United States.” White describes case after case where consolidation, not medical need, drove industry structure. He leaves the reader with a clear and convincing image of a space where varying levels of provider and insurer power, not productivity, is the key to understanding changes in the profitability of services. I’ve seen few better brief explanations of rising medical costs than the following: Read more

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