The February 17 Wall Street Journal includes an opinion piece by J.D. Kleinke, The Myth of Runaway Health Spending, it says in part:
Much of this change got off the ground around 2001 as managed care (i.e., the hated “HMOs“) gave way to a renewed era of unlimited consumer choice and access—for a price. Those with insurance were suddenly free again to choose whatever health care they wanted, but this time with their own money. Higher deductibles, new co-payments, Health Savings Accounts, “tiered” drug plans—these were all rolling out between 2000 and 2004, the same years that health-care inflation was starting to cool.
Suddenly, a $5 generic drug might work just as well as a $50 branded one. People concluded that going “out of network” for an extra $100 out of their own pocket might not be worth it. It turned out that a nurse practitioner in an urgent care clinic can spot an ear infection for $30 a whole lot faster than an emergency-room physician can for $1,000. There were many new drugs available, many others going generic and some, such as Tagamet for ulcers and Claritin for allergies, even going over the counter.
These developments were augmented by other disciplining forces, like the nonprofit National Committee for Quality Assurance, which measures and reports to employers and other buyers of health care on how well insurers’ provider networks manage chronic disease and practice preventive medicine.
Mr. Kleinke and others who see a trend in lower health care costs are dreamers who put their faith in market forces as if average people enter the health care system as consumers of televisions and then choose the best deal for cable, a DVR and pay per view. What he really alludes to is cost shifting not utilization management. All this shifting may avoid an occasional office visit, but most of our costs are incurred by 20-30% of the population who are really sick.
Such perspectives often cite the use of generics as evidence of choosing lower costs. Ok, it’s pretty much a no brainer that once you have a script in hand spending the least money makes sense. The real decisions relate to going to the doctor, which doctor and whether to even take a drug. In addition, employers have been pushing and providing incentives for generic use for decades. Some states have long required a script be filled with a generic when available unless objected to by doctor or patient.
Going out of network is not a major issue. Rarely do people start by going out of network unless they are driven by specific concerns or they believe the out of network doctor is somehow the best and then the extra $100 will have no consequence.
As for those OTC drugs, consumers are not stupid all the time, they figure out that paying the OTC price is far more than their plan co-pay so they have their provider write a script for a drug that does not have a OTC version. Even if the consumer did purchase the OTC drug, costs didn’t go down, they just weren’t reported.
My favorite misobservation is this one, “how well insurers’ provider networks manage chronic disease and practice preventive medicine.” Here’s a news flash, doctors in a provider network are not a coordinated system, they don’t work together or even talk to be another about your care except when making a referral, if then. They are in the network because they signed a contract to accept a certain fee for providing care to the customers of your insurer and nothing more. That’s why you will find one doctor in the network for six different health insurers and why the same doctor may be in-network for traditional coverage, but not for the PPO – they pay differently. This lack of coordination is also why you now see a push for Accountable Care Organizations and the concept of Medical Homes that hope to bring the coordination and efficiency that is now absent.
Any moderation of the health care cost trend is due to a cycle that occurs ever so many years plus all the attention currently directed at health care; the growth in costs will be back. Just wait until 2014 when millions more Americans will have coverage along with subsidized premiums as well as subsidized out-of-pocket costs – can you say demand going up?
Oh yes, and let’s not forget the impact of the scores of new mandates for “free” services and the expansion of coverage requirements added by the Affordable Care Act.
“Consumers” of health care, ah!
Related articles
- Making patients “consumers” is the wrong focus (quinnscommentary.com)
- Health care benefit regulations creating unprecedented burden on employers (quinnscommentary.com)
- Consumer driven health care is a myth and aiming at the wrong target (quinnscommentary.com)
- Patients in Consumer-Driven Health Plans Show More Cost-Conscious Behavior (quinnscommentary.com)
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