A free-mar­ket ap­proach to health care

The Washington Times Weekly - - Commentary - By Andy Lazris

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, non­trans­par­ent 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. Andy Lazris, a physi­cian, is au­thor of “Cur­ing Medi­care” (Cor­nell, 2016), and co-au­thor of “In­ter­pret­ing Risks and Ben­e­fits” (Springer, 2015).


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