Monday, March 10, 2014

Cost Conscious Health Care

Health Care Policy and Marketplace Review has an interesting article on how few of the uninsured are signing up for the new ACA policies. The bottom line is that the exchanges are offering a deal that meets government requirements but not the requirements of the people signing up. People were promised a dashing charger to take them away to the prince's castle of improved health care and they find themselves being overcharged for a broken down nag that can barely hold itself up much less provide real help.

The fundamental problem is that there are multiple layers of poor pricing practices in health care. Where there are treatment choices, a cost conscious system would start by examining what is the lowest priced treatment that might work in this patient and try that, following up with progressively more expensive treatments until one of them worked. Too often what's actually happening is a doctor with a full panel and a waiting list of patients wanting to see him just prescribes the best treatment that has the highest chance of success. This reduces the number of return trips but also makes treatment much more expensive. The ACA doesn't fix that.

We have the wrong number of doctors due to restrictions on residency slots due to the AMA capturing the residency slot authorizing system. We have the wrong mix of doctors due to poor pricing decisions that have been going on since the 1970s in the Medicare price lists. Our pricing system is unnecessarily opaque due to the AMA holding copyright on the codes needed to document the pricing system. All this combines to create a system that is too expensive and trending the wrong direction on costs. Government insurance with plenty of coverage mandates just makes the problem worse.

Until we fix healthcare pricing things will continue to degenerate. Obamacare is just speeding up a pre-existing condition that has been bleeding the US medical system out for decades.

HT: The Glittering Eye