Tuesday, March 6, 2012

High Deductible Insurance Does Not Restore Pricing Mechanism

High Deductible Insurance does not restore the pricing mechanism, nor does it restore the doctor/patient relation.

Even though a person has high deductible insurance and is pays some bills directly out of pocket, all of the payments must conform to the standards of the insurance company to qualify for the deductible. This means the insurance company is still the controlling factor in the negotiation of price and services.

High deductible insurance does nothing to control prices because the price breakdown is most pronounced in the high price services that are above the deductible.

The only way to restore the doctor/patient relation and pricing mechanism is to create a system where the consumer controls the negotiation of services from the first dollar.

At current rates, the average American pays a half million or so in insurance premiums and deductibles.

If you put the bulk of that money in a savings account, you would find that Americans can pay some hefty medical bills. A person with $400,000 can pay that hefty $30,000 doctor bill that everyone fears. We should not consider supplementing health care until a person has problems that clearly go beyond the norm.

The Medical Savings and Loan starts with the first dollar and has people self-funding their care until their medical history demonstrates that they have problems that fall outside their ability to pay. (There is a health care advocate who helps people with planning)

We can restore the pricing mechanism in health care and we can restore the doctor/patient relation. The secret is simply to see the individual as a whole being. Contrivances like Health Exchanges and High Deductible Insurance, which try to abstract off risk, fail to see people as whole beings.

1 comment:

  1. High deductible plans lack many things, but they do put the patient in semi-control of spending, and for those that do not want to go without the insurance component, they can lower premiums substantially.

    HDPs could be an important step for the consumer to become comfortable going from pure insurance, into a savings account.