Consumer-driven health care has reached the “tipping point” of 20 percent of the under-65 population. Virtually the entire individual market is in high-deductible plans these days.
Some critics call an employer-sponsored HDHP cost-shifting, saying mean and nasty employers are making employees pay for services that used to be covered by their workplace health plan. But employees pay for the health plan either way, in the form of reduced wages. It doesn’t much matter if the payment for the health service comes from the health plan or directly from the employee; workers are paying for it either way.
The real difference between the two approaches is this: It is far more efficient to pay small claims directly than to go through an insurance mechanism. In addition, the opportunity to save money changes patients’ behavior in positive ways. They become better-educated and more reluctant to waste money than they are when somebody else is paying the bill or seems to be.
Consumer-driven health care empowers individuals by taking money away from third-party payers and putting it in the hands of consumers to spend as they wish. Now that we have 20 percent of the population paying some of their own bills, we should begin seeing a profound effect on the service side of the ledger.
Every physician, hospital, and pharmacy will have a fair number of cash-paying patients and will have to adjust their billing procedures and customer service departments accordingly. Service providers will become literally invested in serving a cash-paying retail market. They will want to defend their investment. And that changes the political dynamic substantially.
This is a whole new reality, and one that Washington will not be able to tamper with lightly.
Greg Scandlen ([email protected]) is director of Consumers for Health Care Choices at The Heartland Institute.