The emerg­ing new face of af­ford­able health care

Lodi News-Sentinel - - OPINION - CONOR NOR­RIS

The cost of health care con­tin­ues to grow, cre­at­ing se­ri­ous hard­ships for pa­tients and fam­i­lies. In 2017, health care spend­ing ac­counted for al­most 18% of U.S. gross do­mes­tic prod­uct, or $10,739 per per­son. It in­creased an ad­di­tional 4.4% last year, nearly twice the in­fla­tion rate, ac­cord­ing to govern­ment es­ti­mates. What can be done to bring these costs un­der con­trol? And who’s best equipped to do it? If you think Wash­ing­ton holds the key, you might want to think again. While fed­eral govern­ment poli­cies can help ex­pand ac­cess to care, there is rel­a­tively lit­tle Wash­ing­ton can do to re­duce costs with­out trig­ger­ing other ill ef­fects. Health care is ex­pen­sive, in part be­cause we ex­pect it to do dif­fi­cult things. Treat­ments that didn’t ex­ist a decade or two ago are to­day ex­tend­ing pa­tients’ lives beyond what was pre­vi­ously imag­in­able. But such ad­vance­ments re­quire sub­stan­tial in­vest­ments; sav­ing lives costs money. Wash­ing­ton’s most re­cent at­tempt to ex­pand health care cov­er­age while con­trol­ling costs — the Af­ford­able Care Act — did lit­tle to shield pa­tients from large “co­pays” and de­ductibles or to stop pre­mi­ums from in­creas­ing. Some of the ACA’s fail­ure is due to its de­sign: In­creas­ing health care us­age and re­duc­ing costs are op­pos­ing goals. How­ever, an equal if not greater prob­lem is the lack of trans­parency and com­pe­ti­tion in health care. To lower costs, there re­ally are two op­tions: pro­vide less care or pro­vide care more ef­fi­ciently. The first op­tion — ra­tioning — is un­de­sir­able. The sec­ond — mak­ing health care more ef­fi­cient — can be ac­com­plished by putting pa­tients at the heart of the sys­tem. Cur­rently, the costs of treat­ments are hid­den from pa­tients. You don’t see any prices un­til you get the bill — or a state­ment from your in­surer show­ing what it was charged. By mak­ing prices trans­par­ent, as they are in a fur­ni­ture or auto show­room, we can stim­u­late com­pe­ti­tion, which grad­u­ally will help lower prices. Can this work in real life? Look no fur­ther than Lasik eye surgery, used to cor­rect near­sight­ed­ness, far­sight­ed­ness and astig­ma­tism. Be­cause Lasik surgery isn’t cov­ered by many in­sur­ers, Lasik sur­geons ad­ver­tise and com­pete on price. In the first decade af­ter its in­cep­tion in the 1990s, the price of such surgery fell by 25 per­cent, while the qual­ity im­proved sub­stan­tially. Com­pe­ti­tion based on con­ve­nience and af­ford­able pric­ing is tak­ing hold else­where in the health care mar­ket as well. Liv­ing up to its slo­gan of “al­ways low prices,” Wal­mart re­cently opened its first — of what even­tu­ally could be hun­dreds — Wal­mart Health clinic next to one of its re­tail stores in Ge­or­gia, of­fer­ing an ar­ray of ser­vices from ba­sic pri­mary care, to X-rays, den­tal and men­tal health coun­sel­ing, at low, well-ad­ver­tised prices. Re­tail phar­macy chains CVS and Wal­greens also are ex­pand­ing the out­pa­tient health ser­vices they of­fer. Given their suc­cess, oth­ers are sure to fol­low. What this means is that pa­tients in the not-too-dis­tant fu­ture will have sev­eral choices for their health­care needs — their fam­ily doc­tor, an ur­gent care fa­cil­ity, a chain store or in­de­pen­dent clinic, a hospi­tal or emer­gency room in cer­tain cases — and will be able to make those choices based on need, cost and con­ve­nience. This com­pe­ti­tion, if it isn’t sti­fled by reg­u­la­tors, is what will drive down costs, not the heavy hand of govern­ment. The emerg­ing new model of com­pet­i­tive, af­ford­able health care is dras­ti­cally dif­fer­ent from the cur­rent sys­tem, where costs are hid­den and pa­tients pas­sively fol­low providers de­ter­mined by their in­sur­ance net­works. While pa­tients must be con­fi­dent their providers are knowl­edge­able and their treat­ments safe and ef­fec­tive, overly strin­gent reg­u­la­tions can sti­fle in­no­va­tion and new, cre­ative ways to de­liver care. As Google co-founder Sergey Brin told an in­ter­viewer re­cently, ex­plain­ing why Al­pha­bet (Google’s par­ent com­pany) isn’t heav­ily in­volved in health care, “Health is just so heav­ily reg­u­lated ... it’s a painful busi­ness to be in.” That may be so but change is com­ing. As Wal­mart and other in­no­va­tors are start­ing to re­al­ize, the best way to lower health care costs is by en­cour­ag­ing trans­par­ent pric­ing and com­pe­ti­tion — and plac­ing the pa­tient at the cen­ter of the health care sys­tem. The surest way to ac­com­plish this is by get­ting govern­ment out of the way. Conor Nor­ris is a Cat­a­lyst Pol­icy Fel­low with the In­de­pen­dent In­sti­tute, Oak­land, Calif., and re­search an­a­lyst with the Knee Cen­ter for the Study of Oc­cu­pa­tional Reg­u­la­tion at Saint Fran­cis Uni­ver­sity, Loretto, Pa.

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