President Trump understands that the basic way to fix the health care system in America is through competition. That’s why he is making it possible for insurance companies to come up with new products that offer consumers the choice to insure themselves only against certain conditions, or only for catastrophic health care problems and not others. That’s why he’s making it possible for large groups of consumers to negotiate with health insurers for coverage to suit their own needs. And that’s why he’s making it possible for health care insurance companies in one state to sell health insurance to Americans in other states.
Think about it this way: Why shouldn’t a group of, say, 50,000 Americans who agree to never use illicit substances, and who are more than willing to be randomly drug tested to prove it (and to lose their insurance if testing positive), be able to contract with a health care insurance company for premiums calculated without the expected burden of drug rehabilitation in some number of them? Why shouldn’t non-smokers be able to band together for a lower rate? Why shouldn’t folks who aren’t obese, don’t smoke, don’t use illicit drugs and who have a history of low health care services utilization be able to form a group and take bids from insurers on their coverage?
The answer has been that when healthier people break off from the general public and negotiate lower health care insurance rates, that those less healthy people left behind will have to pay far more than before. Their premiums will be sky high. But, that negates the fact that many of those folks will choose to alter their behaviors and risk factors, in order to pay less. And for those who cannot change the fact that they are inherently expensive to care for, the government could always decide to offer them a tax credit or another means of helping them out.
First, though, we need to find out how unleashing a competitive marketplace in the health care system affects pricing. Because until we know that, we have no idea what the value of health care services truly is. They have been grossly inflated because consumers have little or no responsibility or power to control their health care costs.
That’s apparently about to change.
Imagine if 100,000 Americans within driving distance of Boston, who are relatively fit, non-smokers, who don’t use drugs, formed a consortium—call it the Liberty Savings Health Alliance (LSHA)—and approached 10 health insurance companies for a monthly premium. The 100,000 members of the LSHA also agreed to each pay the first $2,500 per year of their general health care costs and the first $5,000 of any surgery or cancer care.
Insurance companies would compete for the LSHA contract based on estimations of how much it is likely to cost them for the rest of the medical care for these 100,000 people. And as part of the deal, what if the insurance company made Mass General, New England Medical Center, Lahey Clinic and five other hospitals submit competitive bids for office visits and other health care services, including potential ER visits and surgery to care for those 100,000 people?
And what if a health insurer offered LSHA the lowest monthly premium of all, but threw in the demand that all consumers watch a Webinar once a month on new preventive health strategies?
You get the picture. Patients would be economically incentivized to stay healthy. Insurers would be economically incentivized to offer the lowest-priced premiums and most creative health care plan options. And health care providers would be incentivized to keep their prices competitive and the quality of the services they provide high.
Thank you, Dr. Trump. The treatment for what ails our nation’s health care delivery system has finally begun.
Keith Ablow, MD