A free-market approach to health care
Medicare reform should focus on better health outcomes rather than saving money
With the election of Donald Trump and the dominance of a Republican-led Congress, health care reform has moved to the top of the national agenda. Aside from scrapping and replacing the Affordable Care Act, many Republicans such as Paul Ryan and Department of Health and Human Services nominee Tom Price hope to radically alter Medicare, advocating for a more privatized system. Proposals like Mr. Ryan’s “A Better Way” offer seniors vouchers to buy private plans, encourage Medicare Advantage programs, and use Health Savings Accounts (HSAs) to give consumers pre-tax health spending dollars so they can make better health care choices. But is this approach truly conservative, and will it lead to lower cost and higher quality of care?
There are, in fact, two faces of conservative reform. First are those who want our health care system to reflect the free market where consumers have genuine choice and can make good decisions. Then there are those who use similar verbiage but who bow to special interests, who fear political reprisals if they disrupt the medical landscape, and who do not want to alienate their allies who have financial stake in the current system. Medicare’s dysfunction persists because it feeds hospitals, pharmaceuticals and specialty doctors — powerful lobbyists on Capitol Hill — while labeling any efforts to curb excess medical spending as “rationing” that hurts consumers of care.
Thus, both Republican and Democratic reforms have tried to remedy Medicare’s financial collapse not by assailing the roots of wasteful spending and those who are being enriched by it, but rather by dancing around those realities and leaving the gut of Medicare intact. The fact that most private insurances and Medicare Advantage plans simply mirror Medicare’s payment methods, which encourage hospitalization and procedure-oriented specialty care, means that privatizing Medicare will not help promote a functional free market for health care. Rather, most private plans practice business as usual with a different face.
As a working primary care doctor and someone who has studied and lived within our Medicare system, I believe that a free-market medical system would not use financial incentives but rather health-outcome incentives to help patients negotiate the health care morass. Because our current health care system squanders an estimated $750 billion annually on care that is either harmful or wasteful, and because much of health care spending falls into the hands of hospitals, specialists and pharmaceuticals for what experts consider low-value medical interventions, effective reform needs to remedy the root problems that prevent patients from engaging in free-market medical decisions. From my perspective, there are four such barriers, all of which can be remedied by a free-market medical model that promotes patient choice and is not afraid to clash with special interests:
• Home care for the elderly is not an option under Medicare or most private plans, all of which encourage hospitalization when people are too sick. Studies show that this approach is costly, ineffective and not what many elderly people want.
• Specialists and hospitals are financially rewarded to perform tests and procedures that are often detrimental or unnecessary, while primary care doctors are paid very little to interact with patients to discuss individualized risks and benefits of medical interventions. Our payment system is scripted by a small, non-transparent committee within the American Medical Association and not by the free market. Patients cannot make sensible health decisions in a specialty-dominated atmosphere that rewards and proliferates overtreatment, which dissuades doctors from encouraging more sensible solutions, and which is costlier and less efficacious than a primary care model.
• Patients are not privy to sufficient information to make educated health care decisions necessary for them to partake in a free market. They often derive their facts from the press, drug ads and doctors who are incentivized to encourage an aggressive approach to health care.
• Public and private insurance companies force doctors to use generic protocols when caring for patients, something that is a salient barrier to individualized share decision-making.
To fix Medicare in a conservative way, we should build a system predicated on a medical free market that allows patients to be treated at home if that is what they prefer; that pays doctors more to think and discuss, and less to perform tests and procedures; that assures patients can access accurate information before being forced to make profound medical decisions; and that eliminates protocol-based treatment.
A true free market in health care provides patients with medical options that they can assess with their primary care physicians to maximize their own health outcomes with the least amount of risk. To do this, Republicans and Democrats must confront powerful special interests who are now calling the shots and who would be financial losers from genuine changes. The results of such conservative reform are likely to benefit everyone else and to keep Medicare alive for many decades to come.