The most important (and biggest) change of all must come from insurers. Medical insurers need to move back to the model of other insurance agencies. You don’t pay a copay to your car insurance company when you get an oil change, and you don’t expect your homeowner’s insurance to cover your new ceiling paint, so why do you expect your medical insurance to cover your basic doctor’s visit or prescription for antibiotics? Medical insurance companies have embedded themselves in to every health care transaction – they have established a strange symbiotic relationship. This symbiosis has massively increased costs, as there is an additional layer built in to every transaction. Two simple examples might illuminate the problem:
First, when an insurance company is involved in every medical transaction, additional time and paperwork is added to every transaction. The insurance employee must be paid, the doctor’s office worker must be paid extra for the extra paperwork he or she has to fill out, additional letters must be printed and mailed, etc. Instead of simply handing over cash to pay for my treatment, I have added a layer of significant additional costs.
Second, this layer of insurance hides the real costs of my medical care. If a visit with a primary care doctor or specialist costs me only a $20 copay, I am likely to go more frequently than if it costs me $100. I am even incentivized to take advantage of this “cheap care,” because I feel like I am “getting my money’s worth” from the high premiums I pay my insurance company each month. The incentives become perverted quickly – particularly when insurance plays a role in every transaction.
Medical insurance must return to its original form. It ought to be insurance against catastrophe. Then each consumer would pay a much smaller premium to insure themselves against a crippling catastrophe that would cost thousands or tens of thousands of dollars. For typical, recurring visits, you pay out of pocket. This approach shows the wisdom of health savings accounts – an innovative approach that is, unfortunately, likely to slowly disappear under a brave new world of government-mandated “standards” for health insurance plans.