Inkwell: Authors and Artists

    

The comparison to car buying sets a low bar at least for many I know.
If more than a small minority read Consumer Reports reviews (for example)
incuding expected repair rates, get Consumer Reports (or other) real
cost information to bargain with and so forth, I'd be very surprised.

And health care is seriously more complex.
  

    
And, at least at the low end of the consumption spectrum, it is
seriously hard to make smart decisions when you are scared and in pain.
  

    
> it is seriously hard to make smart decisions when you are scared and
in pain

First: Everyone goes there, imagining that the moment you are making
these decisions is when you're being scraped off the highway or have a
fever of 106. No, for emergencies you're making these decisions ahead
of time about what your insurance will cover — will you take the chance
of a huge expense if you go to an out-of-network ED? For the fever,
you are making the decision what kind of system to sign up with, what
kind of after-hours primary care support they have, does your insurance
cover urgent care centers, and so on.  
  

    
> If more than a small minority read Consumer Reports reviews...

If I mention to you a Ford F-150, a Mercedes 500, and a Kia Sport,
would you have any difficulty identifying the pickup truck, or the
luxury sedan? We are saturated with such knowledge. And people
regularly look at TripAdviser to see what other people thought about a
hotel or restaurant. That level of information is all we need, and we
will be getting it from lots of sources, crowd-sourced and supplied
through our insurance. And many types of insurance will make it
seriously advantageous to find out: This high-quality place to get your
MRI will cost you no co-pay, this equally high-quality place will cost
you a $1200 co-pay. Given such incentives, people will quickly learn
how to look it up.
  

    

Well, I know the difference between the local community hospital which
is understaffed, overworked and deals with the uninsured (at least until
recently) versus the high quality nearby hospital.

But my complaint was at one level deeper. If you asked me which hospital
in the surrounding 50 miles is better when dealing with cardiac surgery,
I would have no idea and have a hard time finding out. You need to be
stronly motivated and most aren't.

I'm not saying that knowing the price is not very helpful because it is.

An example happened recently with a good friend of mine who was concerned
about general anaesthesia caused cognitive disturbance/dementia because
she's not 100% mentally sharp any longer. She was strongly motivated to
look around and find a doctor and hospital that would do some surgery
not under general. Cost was utterly not a concern in her case.
  

    
The whole idea that our bacon will be saved by people becoming highly
discriminating health care shoppers is a fantasy.  But it will keep
everyone looking in the wrong direction for a while so that the health
insurers and the drug companies can continue making billions at our
expense.
  

    

There does seems to be a freight train on the tracks and rolling at high
speed. Here's another example of switching away from fee-for-service:


Maryland's Bold Hospital Spending Plan Gets Feds' Blessing

  Maryland officials have reached what analysts say is an unprecedented
  deal to limit medical spending and abandon decades of expensively
  paying hospitals for each extra procedure they perform.

  If the plan works, Maryland hospitals will be financially rewarded for
  keeping people out of the hospital -- a once unimaginable arrangement.

  "This is without any question the boldest proposal in the U.S. in the
  last half century to grab the problem of cost growth by the horns,"
  said Uwe Reinhardt, a healthcare economist at Princeton University.

  After months of negotiations with state and the federal officials,
  the hospitals also agreed that their revenue from all sources --
  private insurance, government, and employers -- will rise no faster
  than growth in the overall state economy.
  ...

http://www.medpagetoday.com/Washington-Watch/Reform/43749
  

    
Thanks for that article, Jerry. I have been following Maryland for
some time. It is one of those states, like Vermont and Hawaii, that
seem to be able and willing to try new methods of reform. 

Sorry for dropping out of the conversation for a while. In the last
two weeks I have been speaking and advocating for serious change in the
industry at conferences in Orlando (a software company's clients),
Fresno CA (a local hospital group), Copper Mountain Colorado (an
insurance company and its top brokers), and Miami (a national hospice
and palliative care group). Next week I head to San Diego to speak
before some more insurance folks. Then I finally have a few weeks for
writing before the next foray.
  

    
> The whole idea that our bacon will be saved by people becoming
highly
discriminating health care shoppers is a fantasy.

This is obviously the big question. But there are several good reasons
for optimism. 

1) All the new customers brought in through the exchanges pay some of
the cost themselves. Even if their premiums are 100% covered, the
"Bronze" participants pay 40% of the cost, the "Silver" pay 30%. So any
time that they have a choice (that is, they are not unconscious or
otherwise unable to choose), that their are places to choose among, and
they can find out about them, they will be in serious shopping mode.

2) Increasingly, employers are changing their health plans to similar
"participation" plans. These are obviously unwelcome to the employees,
but there is little doubt that they do change the behavior of the
employees and make them vigorous shoppers.

3) Health plans, the government, and employers are all getting
vigorous about supplying the information that people need to make
"shopping" choices — and the variations in price are so huge that no
one can afford to ignore them.

4) Employers are doing a lot of "shopping" themselves, through direct
contracts with major, high-quality providers at lower than the median
price; through reference pricing, which effectively cuts the high-end
price outliers out of the market; though "cost+" contracts; through
local buyers groups; through bill auditing — it's a full-court press.
Most of these are things that a small minority of employers have tried
in the past few years, but a big majority say they are going to try
this year. It's going to have a huge effect on the market.