It is time to unleash the power of the American consumer on health care costs. In the midst of this health care reform debate, there is little discussion about engaging consumer action on health care costs. Americans know how to shop. We shop for food, clothing, cars, homes, appliances, furniture, technology and entertainment. We even shop for our education, religion and politicians. So why not shop for health care?
We are worried about skyrocketing health care costs as well as the growth of our federal deficit. We know that we cannot afford higher premiums, higher deductibles and higher health care costs without some ability to manage our health care spending. Collectively, we need to become consumer activists to cut health care costs.
Unfortunately, a great many of our best and brightest consumers have succumbed to complacency and stagnation—someone else provides for their health care needs more than amply. Lulled into a false or at least momentary sense of security, these folks have been “disabled,” neutered of any desire to change the health care system, and they are understandably cranky when the subject comes up.
To begin the conversation we should draw a distinction, often overlooked: the difference between shopping for health care and shopping for health insurance. Shopping our health care certainly won’t replace the need for health insurance. There will be always be unforeseen emergencies and unexpected instances of complex or long-term care; that is the precisely why we need health insurance and why we’ve set up Medicaid and Medicare.
Shopping for health care is different. Have you ever stopped to ask about your health care costs before you receive care? The first question asked when you enter a clinic, hospital or doctor’s office is who your insurance carrier is or what coverage you have. Presently, unless you are worried about your out-of-pocket costs or your percentage of the deductible, that is usually the end of the discussion. Shopping becomes more attractive to those with high deductibles where the incentive is to avoid, limit or reduce costs.
Last year when my father was hospitalized for a broken hip, the charges for his surgery and care for one week in the hospital was over $87,000 in the last weeks of his life. While I am grateful for the procedures and care he received and for his Medicare coverage, I cannot fathom how his hospital bill could be so high. We were unaware of the costs he would incur until we got the bill from the hospital about two months after his care. Talk about sticker shock, I was amazed. I’d look for someone to thank, but I can’t help feeling like a sucker, because some of those dollars are not going to be available for our roads and bridges, our children’s education, our federal deficit, or even our own health care.
One small provision in the recent proposal offered by the Senate Finance Committee would require hospitals to provide a list of their standard charges for services. That provision ought to be extended to doctors and clinics as well. Wouldn’t you like to know how different doctors, clinics and hospitals charge for different services?
The system of payment for services has become incredibly complex with negotiated rates that are different for the various insurance providers as well as for Medicare and Medicaid. Uninsured individuals are off another rate card altogether—one that allows them as much as a 20 percent discount or more from the standard rate to assist them with more affordable coverage. Hospital charges vary widely over a broad range of negotiated procedures with little or no consumer engagement.
Spending nearly 18 percent of GDP on health care is unacceptable. If health care costs had simply grown at the rate of inflation since 1970, our annual costs would be reduced by about $5,000 per American. That is about 10 percent of today’s median income. I think we would all rather have higher incomes than higher health care costs.
As a nation, we cannot afford to spend an ever greater percentage of GDP on health care and remain an active competitor in the global economic arena. We must do better. We must do our part. We must do all we can to beat back health care spending by living healthier lives and making better and more informed health care decisions.
We do need systemic health care reform, but it ought to include incentives that encourage us to get out there and shop! We’ll show them how to cut spending!