Effects of Consumer-Driven Health Plans Debated
The Wall Street Journal on Monday published a debate among three experts over issues related to consumer-driven health plans. Debate participants included Joseph Antos, former assistant director for health and human resources at the Congressional Budget Office; John Goodman, founder and president of the National Center for Policy Analysis; and Robert Reischauer, president of the Urban Institute and vice chair of the Medicare Payment Advisory Commission.
Summaries of their statements appear below.
Most U.S. residents "have health insurance that pays for nearly all of the cost of health services," and, as a result, consumers "purchase more health services than they would if they were fully aware of the true cost," Antos said. He adds that "health care providers have little incentive to limit the use of services that may make only a marginal improvement in a patient's condition, knowing that a third party is paying the bill."
According to Antos, consumer-driven health plans "could break this health inflationary spiral by making consumers more aware of costs." He also said that "we should redirect government subsidies so that they are better focused on those who need that help the most," adding that a cap on the "federal tax exclusion for employer-sponsored coverage would be an important step in that direction."
"Consumer-driven health care is not about shifting costs to employees," but rather "about shifting money from employers to employees, so that employees can manage their own health care dollars," according to Goodman. He adds, "CDHC is all about patient power -- having patients make the often-difficult choices between health care and other uses of money instead of having those choices made by large, impersonal bureaucracies."
In addition, Goodman said that "patients are mainly paying for their care with their time, not with money." He said, "Rationing by waiting has special disadvantages for the chronically ill," adding that, "under a system of price rationing, providers would vigorously compete to solve problems that are too often ignored under the current system."
"To be both effective and equitable, CDHC requires educated consumers, a sophisticated information infrastructure and complex mechanisms for subsidizing premiums and determining contributions to individuals' health spending accounts," Reischauer said, adding, "None of these exists now."
He said, "Widespread adoption of CDHC would almost certainly do a bit to restrain the growth in costs for many services, pharmaceuticals and devices because it would curb demand," but he adds the "impact is likely to be small and most evident for lower-price items that are billed separately and not components of larger service packages." Many "things we buy in health care are pieces of larger packages," and consumers "could select the doctor to visit on the basis of price and quality but that is no guarantee that the package of tests and treatments that resulted would be the lowest cost or highest quality," Reischauer said.
In addition, he said that "the costs of really expensive treatments would be largely unaffected because those needing major interventions are usually in no condition to 'shop around' and their incentives to do so may be quite limited because, at the margin, their costs would be picked up by their catastrophic policy."
The Journal also conducted an online poll on who should cover most health care costs. Among 2,623 respondents, 60% cited consumers, 28% cited the government and 13% cited employers (Wall Street Journal, 1/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.