A Healthier Way to Pay For Care
A proposal by Sen. Warner and others would enable patients to compare health care costs directly.
Sen. Mark Warner has joined 10 colleagues in pushing an amendment to health care reform that would set up a system to let patients compare medical costs. It is an intriguing idea, but it doesn’t go nearly far enough.
“What Travelocity and some of these sites did to airline fares, we hope to do with health care,” he said. “That got rid of the stuff in the market that doesn’t work.”
It’s good to know what something costs before you buy it. The problem is that bypass surgery isn’t a trip to Cancun. A bypass isn’t discretionary, and it’s not something most people buy on price alone. Even if a patient knew the cost down to the last nickel, the selection of a doctor, surgeon and hospital would still be based on quality, comfort, convenience.
Oh, and history of results.
That’s where Warner is on to something.
In the absolute hysteria surrounding health care reform, one very simple concept has been lost: The way we currently pay for medicine is itself the biggest part of the problem.
Essentially, insurance companies – private or public – pay for services a patient receives. Get a CAT scan and the cash register rings. Blood tests? Ka-ching. Surgery? That’s money to the doctor, the surgeon, the hospital and others.
Those checks may be smaller than they should be, but in modern medicine, everyone gets paid, regardless of whether the surgery was successful or even competent, whether the chemo beat back the cancer, or even whether the test was medically necessary. The industry gets a check for how intensively it treats you, not for how well it helps you.
And that payment structure, combined with defensive medicine practiced by doctors worried about lawsuits, means that some Americans get more medicine than is good for them while others don’t get much, if any.
If the nation is ever going to get health care costs under control, the system will have to stop paying for medical care that doesn’t work.
It’s called evidence-based medicine, and last month’s flap over mammograms was an example of how hard change will be.
After looking at new data on the risks and benefits, the U.S. Preventive Services Task Force recommended against routine annual mammograms for women younger than 50 and suggested doing the test every two years after that. The guidelines – and that’s all they were – sparked violent reactions from all over the political spectrum but especially from conservatives suspicious of reform efforts and from the medical industry.
The panel was designed specifically to be insulated from politics as it made decisions on best medical practices. In the end, its counsel on mammograms is calculated to reduce the real harms of over-testing, including unnecessary biopsies that can cause debilitating anxiety and surgery to remove slow-growing tumors that would otherwise never pose a threat.
Whether the recommendation is right, the reaction – including the decision by the secretary of Health and Human Services to distance herself from the guidelines – says something about how difficult it will be to convince Americans that more medicine isn’t necessarily better medicine. Sometimes, it’s just more expensive.
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Health Care is an odd market to begin with. For a society that loves comparison shopping as much as ours, we’re largely insulated from the true cost of health care. For those of us with health insurance, our prime cost decision comes down to which insurance company is going to give us the best deal. All we know is that health care is expensive, so we pay somebody else to pay for it.
That creates this closed loop of costs centered around our health needs, but we have no idea what amount of money is going where. We have no specific hand in it. The hospitals and insurance companies come up with their own costs and then tell you to pay whatever combo of premiums and co-pays they feel suits them. And we just trust them on this because the costs – created by the hospitals – are too big to shoulder without insurance.
Imagine buying a car under the same system. We would know that cars are expensive, but wouldn’t shop around for a good deal. In fact, we’d have no way to compare costs. The only hand we’d have in the process is choosing which third party we want to pay to pay for our car.
Would you trust a dealership and a shady third-party to make your car buying decisions for you? No – so why do we do this with health care?