Monday, August 10, 2009

Real Health Care Reform

Unlike all the government control options put out by Democrats and the Obama Administration, there is a system that would bring costs down and doesn't involve a government takeover of health care. It's called consumer driven health plans.

Consumer-driven health plans (CDHP) rely on health insurance to cover larger medical expenses and preventive care. And they are usually paired with a tax-free Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) that can be used to pay for smaller and routine health care expenses. Employers usually provide part of all of the money in the HSA, and, because the money belongs to the employee, they have a reason to be a value-conscious shopper in the health care marketplace.

One of the reasons for skyrocketing medical costs is that everyone demands the best care, but no one knows what that will cost until after the procedure (or at the time the copay is required). If people had more control of their expenditures, they would probably make better choices and help control their own costs. They might opt for a low-cost procedure for something that's elective, saving their dollars for more necessary things. And if people had to pay out of pocket for doctor's office visits, for example, they might not want to run to the doctor for a cold, or expect expensive tests for everything.
For example, a study in the Journal of the American Medical Association found that people in consumer-driven plans have 10% fewer emergency room visits overall and 25% fewer repeat visits, almost entirely for nonsevere conditions. Regence Blue Shield found that people decreased their use of hospital emergency services by 32% when they switched from a traditional insurance plan to a consumer-driven plan compatible with a Health Savings Account (HSA).

This isn't to say there aren't times when the E.R. is the best choice; of course there are. But you might just wait to see your regular doctor for your fever or cough if the money comes from your pocket, not the insurance company's.

President Obama has said that containing and controling medical costs is a primary goal of his plans. But the only way to control costs is to reduce usage among patients. CDHPs provides one way of doing this, by allowing consumers to make more of their own decisions about their healthcare. The other way to control costs requires someone else deciding for you what your options will be. We usually call this rationing.

Thanks to Chuck Serio for steering me to this article.