3 health care questions we should ask candidates
U.S. health care is a mess. One of the root causes is lack of price transparency. Lack of price transparency causes what the economists call “inelasticity.” In layman’s terms, this means the inability to compare and choose services by the actual cost and value of the service. What other service would Americans buy without knowing the price?
In an effort to address this problem, President Donald Trump recently issued an executive order requiring the posting of prices for health care services. This fol- lows an earlier executive order requiring television pharmaceutical ads to disclose the price of the drug being advertised. This is a good start, but it is not enough to “bend the cost curve.”
Here are three health care questions all candidates should have a position on:
1. What is your approach to price transparency?
Why should the cost of health care be a secret? Why shouldn’t I know if different providers give greater value (in health care, value is the combination of clinical effectiveness and cost) for the same or even a lower price? You wouldn’t decide to buy a car without knowing the costs. For something as important as health care, shouldn’t we all know what is being charged? Why wouldn’t you want to know the approximate cost in advance and whether that service provider is providing the best value?
2. What is your plan for making providers and payers more responsive to the cost of health care?
For years there have been discussions about the moral hazard of insurance. Moral hazard is the incentivization of risky behavior or activity by eliminating or reducing the economic consequences. In the context of health care, this translates to using more tests and procedures than may be necessary because the government or insurers pay the bill. As a wise man once wrote, “there is no free lunch.” And this is the essence of the moral hazard in health insurance. Physicians and insurers need to play an important and changing role here. As agents of the patient, they have a duty to provide care that yields the best value. This is most efficiently done if physicians and insurers share the economic risk of their actions. This is not possible when these economic consequences are unknown or ignored.
3. What is your position on using new business models such as EHealth, Medicare Advantage Plans and accountable care organizations to improve access, quality and lower cost?
E-Health is the umbrella term used to describe telemedicine, remote video conferencing and the use of personal apps to help patients stay connected to their doctors and nurses. E-Health needs to be more broadly reimbursed. It has demonstrated an ability to be very cost-efficient.
Medicare Advantage Plans are operated by private insurance companies. In this model, the insurer assumes the economic risk for all care. By focusing the patient and their physician on early intervention in chronic diseases and on long-term care needs, the overall cost of care is moderated. From these efforts, hospitalizations, re-admissions and the unnecessary use of emergency departments are being reduced, resulting in significant savings. Medicare Advantage Plans now cover a third of all Medicare eligible citizens.
Accountable Care Organizations are a relatively new business model. The ACO is designed to share the moral hazard of insurance but in this case with an organized group of physicians. A group of physicians provide all care for a fixed monthly fee. Savings are achieved by having all care managed by primary care physicians. Referrals of patients are made to a select group of specialty physicians who provide the greatest value (cost plus clinical outcomes). Efforts are made to avoid the use of emergency departments (the most expensive site of health care) and by managing the use of hospital admissions and readmissions. Annual savings are shared between the federal government and the providers as a group.
Some ACOs have demonstrated millions of dollars in annual savings. Shouldn’t we encourage the creation of even more cost-saving ACOs?
At the heart of many of our nation’s health care issues are policy decisions that were unduly influenced by various special interest groups. What can the average American do about all this?
We need to elect representatives who will take the time to understand our very complicated system and propose changes to improve it. As electors, we need to ask them questions about how they propose fixing some of the problems. We also need to hold them accountable for their decisions.
Isn’t that how a representative democracy is supposed to work?