Monday, October 20, 2008

READ: I Care, You Care, We All Care About Health Care

For an issue I know and care so much about, I have neglected health care suspiciously on this blog. This neglect partially stems from the fear of boring the reader; much greater part of this hesitation is really my appreciation for the complexity of the issue that is preventing me from trying to spit out quick and dirty entries I could never consider complete or comprehensive enough.

But I guess I have to give in at some point and we can thus consider this the virtual popping of my health care blogging cherry. And it all started when Ezra Klein pointed me to an op-ed in the Boston Globe today by Jeff Jacoby saying that health care shouldn't be linked to employment. The premise of the piece is that the skyrocketing costs can be attributed to the hidden true costs of care and lack of consumerism in health care. Break health care away from employment and voila - the patient-consumer seeking cheaper better care will magically curb the growth in health care costs.

Ezra, while agreeing with the idea of de-linking employment and health coverage, objects to the notion of consumerism by pointing out that there is a great asymmetry of information between the patient and the provider. While that is a valid point, I do think there is a role for consumerism in health care. For one, even if the patient has to rely on the doctor to figure out what his health care needs are (ie, he cannot - in a truly consumeristic manner - simply decide what he wants and needs), encouraging consumer-driven approaches to finding the best and most appropriate sites of care (ie, the $500 surgery center vs the $5,000 hospital surgical suite) should not be dismissed entirely.

My problem is with the implicit assumptions behind Jacoby original thesis, namely that (a) de-linking health care from employment is necessary to induce consumerism, that (b) lack of consumering in health care is the sole (or biggest) cause of rapid growth in health care costs and (c) the individual somehow has greater power or incentive to drive down health care costs that his employer doesn't. Addressing these points one by one:

(a) consumerism in health care is entirely feasible even under the current employer-based system and is actually quite explicit in many plans based around flexible spending account.

(b) many other culprits can be name that lead to rapid growth in health care costs, among them the cost of new technologies, cross subsidization of less profitable payments in health care and rapid growth in the key health care input such as nurse wages.

(c) under the current arrangement the employers actually exercise a lot of negotiating clout on their employees behalf when negotiating insurance premiums of providers rates, which individuals would never be able to obtain on their own in the market place.

I just reread this entry and I see how it's both too technical and too superficial at the same time but I will develop these ideas further in the next few days but right now work is calling.

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