Now that consumers can generally make an efficient health insurance purchase at HealthCare.gov and most of the state-run exchanges, we can finally get to the real question.
Are the healthy uninsured going to buy it?
The big health insurance changes Obamacare made to the individual and small group market were arguably done in order to get everyone, sick and healthy, covered in a more equitable system.
To be clear, no one I know of wants to go back to the prior health insurance market that excluded people from being covered because of pre-existing conditions.
But what if most of the uninsured literally don’t buy Obamacare?
Then people will question whether or not all of this change was worth it: Why did those who were in the old individual and small group market have to accept all of the expensive changes, narrower networks, higher deductibles, and fewer choices if the uninsured largely don’t want it?
Are we moving away from a system where only the healthy could buy health insurance to a system where only the sick want to buy it?
We’re not quite there yet. But there is a new website that is getting close.
A small, emerging online service called MediBid is creating an actual market that puts doctors together with patients who need care.
Here’s the best thing about it. Patients who use this service can cut their health care costs in half. No, that’s not a misprint. Patients who obtain care through MediBid pay about half as much as BlueCross pays. Ditto for all the major employer plans as well as the other big insurance companies. Patients frequently pay even less than what government pays under Medicare.
Here’s the worst thing about it. Once ObamaCare kicks in, entrepreneurial ventures like this one will probably be nipped in the bud. That’s because the Obama administration doesn’t believe that patients can or should be able to buy care in an open marketplace. In fact, once they get through implementing the 2,700-page bill with 159 regulatory agencies and 10,000 pages of regulations, patients are unlikely to ever see a real price for any type of care.
At least for the time being, however, a market for medical care is emerging. Here’s how it works.
Patients who are willing to travel and able to pay cash, can request bids or estimates for specific medical procedures. They fill out medical questionnaires and they can upload their medical records. The patient’s identity is kept confidential until a transaction is consummated. MediBid-affiliated physicians and other medical providers respond by submitting competitive bids for the requested care.
I can’t even count the number of articles and blog posts I’ve seen asserting that markets can’t work in health care. Or that they work very imperfectly. Or that they suffer from serious “market failure.” In every case, the writer just assumes that government can remedy these problems.
Yet when Gerry Musgrave and I wrote Patient Power, we concluded that our most serious health care problems stem from bad government policies, rather than from markets failing to work. In other words, “government failure” not “market failure” is the source of most of what is going wrong.
Why is our perspective so different from so many other health policy analysts? I think the answer is: the vast majority of people in health policy do not understand the concept of “government failure.” For example, health economist Austen Frakt, following Nobel Laureate Joe Stiglitz produced a list of “market failures” in health care and in health insurance at his blog recently. These include imperfect competition, unequal access to information, external costs and benefits for others generated by private activities, etc. He then offered this observation:
In principle, government intervention can increase that benefit (economic welfare) in such cases. In practice and in some cases, it’s debatable.
How does Austin know that government “in principle” can solve these problems without a model of government decision making? He can’t. Moreover, it turns out that many of the factors alleged to cause “market failure” also contribute to “government failure.” In fact, in the political sphere their impact is much worse. Here is the bottom line: There is no model of government decision making in health care (and in most other areas as well) that shows that government will reliably improve upon the market. (At least a real market.)Continue reading…