You can save a lot of money by shopping around for your new phone or television. Retailers clearly compete for your dollars.
Can competition in the free market work the same way to bring down health care costs? Republicans in Congress are banking on it as they promote health savings accounts and suggest that a good way to reduce insurance costs is to have high deductible policies so that consumers spend their health dollars more wisely. The problem with this approach is that health care purchases are very different from most other consumer choices. When we decide to make a major purchase, most of us do shop for the best price. With health care, that is virtually impossible.
Costs for the same treatment from the same hospital depend completely on whether you have insurance and what rate the insurer has negotiated. Costs for the uninsured are usually far higher than those paid by insured consumers. Costs aren’t made public. And sometimes, total costs are unknown until after diagnostic work; even then, the first tests may require more tests to figure out what is going on. So, shopping around for health care is tough at best, especially if you are uninsured.
Perhaps the most important distinction from other consumer purchases is that you are probably making the biggest and most important health purchases when you are sick. The last thing you need to do during a major illness is worry about cost comparisons. Those of us who have had major illnesses or helped family members through them know that most people are not thinking very clearly when they are seriously ill. It is hard to simply take in the various treatment recommendations, let alone stop and ask about the costs of each. When hospitalized, consulting physicians that patients have never seen before come and go throughout the day. Most patients don’t even know their specialties, let alone whether they are “within plan.”
In other words, the traditional free market model just does not apply. Unfortunately, our congressional leaders are trying to solve the health cost problem by assuming it is just another consumer choice. We need Congress to rethink this approach.
Rather than rushing to make changes to the Affordable Care Act based on a flawed approach, Congress should convene health care experts to review the current system and make recommendations for bringing the cost of care down. This is a time that politicians should step aside and let those who understand this hugely complicated system come up with a strategy based on what works, not ideology.
Margret Straw makes her home in Warren County. Prior to retirement, she was a senior research fellow at AARP. She has been following health and long-term care issues for many years.
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