Home > Health care, Truthiness > The “market” can’t fix US health care

The “market” can’t fix US health care

High-deductible health plans are touted by those who favor “market-driven” improvements to the US health-care system. If people have to pay directly for health care, they’ll only buy what they really need, the theory goes. But a large-scale study of how Hi-D plans affect spending finds that people enrolled in these plans cut back on preventive care as well as on unnecessary care.

That’s not the only imperfection in the health-care “market,” of course; it’s also wickedly asymmetrical – with sellers in control, supply tends to drive demand. [More on this below the fold.]

Health spending did drop 14% for those whose health insurance had deductibles of at least $1,000 per person, compared to families with lower deductibles, the study found. But some of that money should have been spent — on childhood immunizations, cancer screenings, and routine tests for diabetes. Having “skin in the game” doesn’t always result in good decisions, no matter what the “free market” advocates claim.

“We saw that patients reduced preventive care, and if this persists, it is likely to have health consequences in the future,” study co-author Amelia Haviland said. “These cutbacks could cause a spike in health care costs down the road if people end up sicker and need more-intensive treatment.”

Some key findings:

  • Overall, health spending grew for people enrolled in both Hi-D and traditional plans, but grew more slowly in the Hi-D group.
  • The drop in preventive care happened even though Hi-D plans waive deductibles for preventive visits; either these plan enrollees did not understand their policies or something else discouraged them from seeking preventive services.

Meanwhile, that pesky asymmetry between sellers and buyers puts doctors on one side prescribing, patients on the other following doctor’s orders. When doctor-sellers steer the purchase decisions of patient-consumers, nurse David Perlo explains,”‘health care reform’…makes no difference. Prices will keep going up; unnecessary services will keep proliferating.” Seller-dominated markets never control costs, he adds.

Our society can decide that everyone is entitled to appropriate medical care, or not. But we can’t provide care to any except the very rich under this topsy-turvy anti-system. Costs will continue to spiral if sellers set the prices and make the purchasing decisions. Eventually we will run out of money, and eventually came about twenty years ago in the US. We’ve been paying medical bills on credit ever since.

Bill Sez: Thanks to Maggie Mahar’s Health Beat Blog for the link to David Perlo’s comments. The Dartmouth Atlas research shows how much treatment patterns vary from region to region; when a region has lots of hospital beds, it also has high rates of hospital admission; wherever there are lots of cardiologists and cardiac surgeons, there are high rates of cardiac procedures — variations far beyond what can be explained by patient conditions or characteristics.

Categories: Health care, Truthiness
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