Driving off the health care cliff

One popular health care idea among conservatives is consumer-drive health care, which is meant to reign-in care spending by requiring consumers to pay high deductibles before insurance coverage kicks in. While many of these plans won't pay for benefits until some amount, say $2,500 is paid by the consumer, some of these proposals would cover preventive benefits before that threshold. That's an important exception, because it admits the lack of seriousness in these proposals as cost-containment proposals.

With chronic disease accounting for about 75% of health care costs and 10% of patients accounting for 70% of health care costs, there seems to be little reason to focus so much on disincentivizing the first couple thousand dollars of an individual or family's health expenses--unless this can be done by merely deterring unnecessary expenses, while having no effect on necessary ones. However, one survey found that, in general, participants in consumer-driven health plans, "do not report behaving as more informed, better shoppers than people in more traditional employer-sponsored health plans." That same Kaiser Family Foundation survey found that,

"While people in [consumer-driven health plans] are generally satisfied with their plans, on a variety of measures they report feeling somewhat less protected and more vulnerable than people in more traditional employer-sponsored plans, and they report more problems accessing care due to cost."

In fact, while those participating in consumer-driven health plans are less likely to receive unnecessary medical care and treatment, they are also significantly less likely to receive necessary medial care and treatment as well. Unsurprisingly, when compared with those in more traditional employer-sponsored health plans, those in consumer-driven health plans are 50% more likely to say they would be at least somewhat likely to switch plans if given the opportunity and are twice as likely to try to switch plans if they developed a chronic condition requiring more care. Based on all this information, a non-free market ideologue might come to the conclusion that preventing and managing chronic disease would be a more serious way to contain health costs. As Paul Krugman says, "Consumer driven' is a nice slogan, but it turns out that buying health care isn't at all like buying clothing."

(Hat Tip: The Progressive States Network, which has a nice, concise discussion of "Wringing Costs Out of the Health Care System")

Here is a differing perspective from the Republican Policy Committee in the United States Senate.