"We have to break people away from the choice habit that everyone has"….yes, that's an actual quote from an insurance executive only a few days ago – Only in this warped upside down lunacy of a non-market can such a statement make sense. While every single other industry that caters to its customers is focused on offering choice and value, insurance and health system execs are busily finding ways to restrict choice for health care consumers. The rationale, apparently, is that less choice means better value because, presumably, the insurer can negotiate better discounts with the selected providers. Following that same logic, Amazon would only ever provide consumers with one type of any product, and same with Home Depot or Lowe's…or even your local supermarket. It's so absurd and yet that's what these folks are suggesting. This warped logic starts with the premise that consumers are idiots and can't possibly decide for themselves, and hence the decision to keep most prices obscured. As one reporter tells it, after 26 futile steps to get a simple answer on the price of a bone density test, she gives up. And that's in a state that got a B on our recent transparency report card. Think about all the other consumers in the F states that are looking for information on which to base their purchasing decisions. But wait, they need not worry….insurance and health system execs have solved the problem for them: restricted networks of a few providers that are presumably the best value for all health care services they might require. Trust us, we know what we're doing and besides, it's too complicated for you to really understand. When will this bullshit stop?
What this means to you – The answer cannot and never will be about forced restricted choices, nor does it have to be. Next week, with CPR, we're hosting a webinar on price transparency to clear up what is and isn't possible in creating a real market for healthcare services. The bottom line is that it's completely possible but shakes the foundation of the paternalistic top down approach this industry has espoused for decades, and the agents of the status quo can't stand to see their quiet and profitable world disrupted. And yet it's happening, too slowly for my taste, but still, it's there. Look for example at the work accomplished in NJ and Arkansas, and soon to be joined by TN and possibly OH and other states. Providers are getting together to offer better quality through negotiated episodes of care payments. These negotiated payments are all-inclusive prices that can be communicated to plan members. And there you have it: a real market for health care services at a level that matters to individuals. The consumers can make an informed choice knowing what the price of the episode will be, up front, and they can select any provider they want. Smart benefit designs, like the MESAs we have described in a prior post, can then help to move market share to the higher value providers. Restricting networks is idiotic, but if some think they can actually break the consumer's habit of choice and run counter culturally to Amazon and every other consumer shopping experience, go for it, and let's see what happens. And make sure you buy a comfy cushion because you'll need it once you get your ass kicked from one coast to the other.