We’ve reached a pivotal tipping point – or more likely a breaking point – when it comes to our nation’s health care system. No matter where you fall on the political spectrum, most of us agree the current model must change.
According to the Department of Health and Human Services, health care spending surpassed $10,000 per person for the first time last year – which will outpace the growth rate of our national economy in the coming decade. To fix this problem and make health care feasible and accessible, we have to find a way to cut to this figure in half.
Today’s health insurance premiums are clearly putting health care out of the reach of the middle-class. This was apparent during the presidential election, but it came into sharper focus when insurance companies notified their members of big premium increases just weeks before the election. Republicans have blamed the problem on the Affordable Care Act and have long called for repealing the law. Now they’re scrambling to find a replacement.
But here’s a secret: If the aim is to reduce costs, improve patient satisfaction and deliver better outcomes, the free market can accomplish these goals dramatically better than government. As it stands, today’s health care system is high on government regulations and low on transparency. Consumers are shelling out more and more cash without really understanding what they’re buying. Simply put, they don’t know their options – they may not know that they even have options.
It’s a long-term problem that is growing worse by the day, creating a widespread sentiment of cynicism, hopelessness and even desperation across the country.
Here’s another secret: Consumers don’t know they’re pawns in a health care system that incentivizes status quo players to drive prices up.
Hospitals are buying up independent doctors and practices like never before. According to the Medical Group Management Association, losses in excess of $200,000 per hospital-employed physician are not unusual, but these doctors promise a huge ROI in the form of quid pro quo. Physicians who work for a hospital refer their patients for treatment in that same hospital or in a hospital-owned facility, where the cost of care can be five- to 20-times more expensive. Consumers don’t know this – most people don’t know the price of services until they receive a bill – and most heed their doctors’ instructions, no questions asked.
One alternative is a health care system run entirely by the government. This will undoubtedly be the solution if Republicans fail to solve the problem over the next four years. The time is now to allow the free market to address the issue and develop real solutions.
In fact, the free market is already spurring innovation in the form of self-insurance – and it’s turning the health care world upside down. Businesses across the country are utilizing a self-insurance model to provide benefits for their employees. They are actually increasing health care services for their employees while dramatically reducing costs – in a world so disillusioned about the health care system.
Employers have opened their eyes to the waste, overpricing and excessive administration that’s rife in traditional insurance. They have learned that where their employees seek care or fill prescriptions makes a huge impact on cost. They are now demanding cost transparency and making educated choices that ensure their workers receive quality care without paying needlessly high prices.
We have the opportunity to create real solutions to move the needle and transform health care for all Americans. To be successful, any upcoming “replace” effort must:
- Protect an employer’s right to self insure under federal law. Rules that differ by states present challenges for employers that operate across borders.
- Distinguish health care from health insurance. Insurance shouldn’t prevent people from easily and affordably accessing basic health care services, such treatment for a cold or sprained ankle. We need to support initiatives, such as Arizona Direct Primary Care, that enable primary care providers to provide basic health care directly, without unnecessary red tape.
- Ease the ability for telemedicine to operate from state-to-state. We live in an increasingly mobile, tech-savvy world that extends beyond state lines. Our health care system needs to support our personal and professional lifestyles.
- Provide greater transparency. We need to provide consumers and employers with easy paths to identify the true costs of health care so they can make their own educated decisions on how to best handle treatment, especially when it comes to hospitalization.
- Cut the red tape. In addition to transparency designed to give consumers choices, the federal government needs to eliminate regulations that drive up costs and make it difficult to navigate the system.
Our nation is at a crossroads, and we know this coming year will be pivotal. The good news is that free-market solutions like self-insurance put health care first and insurance last, giving even small businesses the opportunity to be creative, to innovate and to find solutions that reduce their costs and provide quality health care to their employees.
Paul Johnson is the CEO and co-founder of Redirect Health (www.redirecthealth.com), which helps entrepreneurial companies build health care plans using a partial self-insurance model.
The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.