Sheila Kennedy has a good post on why Gov. Pence’s embrace of “market driven” health care is misguided.
When Pence announced his negotiated one-year “deal” with the federal government to continue “Healthy Indiana” in lieu of expanding Medicare (a “deal” that leaves some 400,000 Hoosiers without healthcare), he insisted that “Consumer driven healthcare is the path to the future.”
She notes, “Economists define a market transaction as one involving a willing buyer and willing seller, both of whom are in possession of all relevant information.”
The consumers in these transactions very rarely have all the relevant information. Sheila also observes that it is not the patient and doctor negotiating the transaction; rather that it’s the insurer and the doctor negotiating the transaction. I’d go a step further; often the doctor isn’t negotiating the transaction either – it’s a hospital or a doctor’s group representative — I don’t remember the last time a doctor gave me a straight answer in a deposition about the cost of anticipated future surgery.
Consumer driven plans probably work tolerably well for straightforward, elective procedures. But in most cases, the decision to get health care services is made under duress. What is really happening, I believe, is that Americans are being priced out of health care, their utilization rates are dropping — not because they don’t need the help, but because they can’t access it — and their health is suffering.
For citizens whose wages have been stagnant for decades facing health care prices that have been rising dramatically over the same period, this is how they can be made to bear the cost when they are out of money: by, almost literally, contributing their pound of flesh.
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