Health care ‘experts’ are coming out of the woodwork like termites after fumigation. Former Sec of State George Shultz and Stanford professor John Shoven are two of the latest emergent experts; they have written a book on reforming social security and health care – I haven’t read the social security part and after reading the health care section I don’t think I will.
One of the authors’ primary contentions is that involving the consumer in health care is a key to reforming the system. One of the bases for their argument is the history of laser eye surgery – Shultz and Shoven contend that the consumer’s involvement in selecting and negotiating for laser surgery demonstrates that consumerism can reduce costs while improving outcomes.
This because health insurance does not pay for lasix, forcing consumers to, well, be consumers. The huge differences between buying eye surgery (a pretty basic decision, with a tightly defined problem and expected outcome and easily measured result) and figuring out how to buy, or more accurately if you need to buy, health care for your child with an undiagnosed neural disorder are not addressed – at all. I find this to be an unforgivable error, an oversimplification of monumental proportion.
They call for risk adjustment as the way to spread risk and require insurers to take all comers for Medicare and Medicaid members, and seem to advocate universal coverage, but don’t adequately address, or I would argue even minimally address the issue of adverse selection. This issue – adverse selection – is central to the problem of health insurance today – people who need insurance buy it, and the sicker they are the more they are willing to pay, and the more expensive it is, the fewer healthy folks will sign up (because the cost:benefit doesn’t make sense). This is the death spiral – a current example is Humana, currently getting murdered in Part D (they are one of the only payers still offering a rich option, others have dropped the Cadillac plans because, surprise, the people who bought them were the ones who needed the most, and the most expensive, drugs.
What does this mean for you?
Listen to people like Bob Laszewski, Uwe Reinhardt, Alain Enthoven. People who know of what they speak.
Apr
21
