The fee-for-service model does not provide cost reducing mechanisms and I too am a fan of the Kaiser model, also the Mayo clinic has some interesting thoughts (and successful I might add) on how to structure a health care facility. Do you think at the bottom of the issue is one of norms (much harder to change) or regulatory failure?
Hmmmm……not sure either.
In any urban area, the variation on the cost of a procedure from provider to provider will vary as much as 100% or more. Your insurer has no way to “steer” you to the lower cost providers. So, they have to assume as part of the underwriting process that you will use the higher cost providers and price you accordingly. And since those higher cost providers are generally part of hospital networks that are very convenient for the patient, they often get used.
The integrated care model insures financially that you will choose the integrated provider, since anyone else is out of network. This (theoretically) lowers the cost of care and the insurance rates.
It also lowers the rate of redundant testing. For example, my brother in law is a geriatric cardiologist in a medium sized town. He often gets referrals from other hospitals and practices because his practice is closer to where the patient lives. It is very common for him to want a particular test done, and the patient informs him that they just had that very test done a few weeks or months previously. Regardless, my BIL will order the test again, because it could take weeks or months to get the results of that test from the other provider, and he needs the test results NOW in order to treat his patient. This would not occur in an integrated care model.
As for HSAs, I assume the argument most people can’t balance a checkbook much less save for health emergencies and lack the initial resources to begin reaping benefits from them would fall under ideological?
That’s a horrible argument, and if anyone is really that cynical about Americans, they shouldn’t be involved in politics; you should never want to govern people you don’t respect.
The obvious solution is to have the HSA automatically funded by payroll withdrawal in an amount appropriate for the patient’s risk category, a la the SS and Medicare payroll taxes. The patient may put MORE in if they wish (and it would be smart to do so, since it’s another tax-free investment account as well as a prepaid medical account) but they must put in their minimum contribution.
The core contribution of the HSA is that the individual now pays for care with their own money. They are incented to use less, because using less will result in more money for them when they hit Medicare age. So, the HSA also takes pressure off senior social programs. Double win for the U.S. of A.
Do you think looking for a mechanism to tie the taxes to the cost of healthcare so cost goes down, taxes go down too and the money is not siphoned elsewhere would be wise, or is that getting too fancy?
I don’t think they’ll ever go DOWN, unless a combination one-two-three punch of integrated care plus HSAs gets us a one-time premium. What we want is for them to inflate only at the rate of the Social Security COLA. Historically, we’re double that.
2. Are we sure that healthcare works the way other free-market services do? I have a pretty good sense of what I want when I buy car insurance, but my life is hard to put into $$ terms of its value to me.
We’re sure that the desire of the individual to save money if possible will work. Obviously, in a life threatening situation, even the best saver will have to empty the HSA account, perhaps. But emergency life-and-death encounters that force an immediate financial decision are very, VERY rare (although the TV programs would have you think otherwise). There may be an issue here at the margins that needs to be addressed, perhaps by an accidental injury or death insurance rider included with the policy that could fund the HSA in an emergency. Those policies are pretty cheap, for the reasons mentioned above.
But more broadly, no, I don’t consider the “healthcare is not the same as other goods” argument to be a very good one. Healthcare is NOT the same as other goods, but there is no reason why those differences affect the funding mechanisms.
3. Would you consider funding an investigation into where exactly the money goes from healthcare and who is actually profiting off of it? I know that there is a decent amount of flab in our national healthcare, but TBH I’m not 100% sure where it is, and everyone seems so busy convincing me it’s someone else.
Well, this is part of what I do for a living. :-). There are tons of actors in the system, and MOST of them are (a) well paid individually, but (b) not making huge profits as businesses. The insurers profits are down there with grocery stores at about 2%; I think if you got rid of the insurers in a single payer system, your fraud losses would be higher than their profits, because the insurers are damn good at rooting out fraud, and the government sucks at it.
Most hospital chains are not making huge profits, although they pay their people well. Same with doctors and their practices. Pharma makes big profits, but they’re a feast or famine business — — if you stop them from feasting, they might not survive their next famine.
The inefficiencies within each actor are huge and each actor has no reason to control costs. The number of handoffs between the actors is huge, and everytime you hit a handoff point, there’s an inefficiency cost that gets paid. This is why integrated care has such promise, because it streamlines the system and removes the handoffs.
Hope that helps. There’s a lot of people who know more about it than I, I should add, and there are lots of good cost control ideas kicking about.