Midlands Voices: Policy-makers should support ‘private option' for health reform

The writer, of Scottsbluff, Neb., is a policy adviser to the Platte Institute and the Heartland Institute, two Midwestern think tanks.

While many politicians tell us that only a government-run “public option” can bring down health care costs and ensure competition, another power is quietly achieving those very same goals.

Thanks to this unsung force, health care consumers can now (1) get more affordable care from the doctor or hospital they already know and trust, (2) shop around for the most affordable provider and (3) get a second opinion on their medical bills after they receive care.

For example, in the past it has been hard for consumers to know whether they were getting their health care at a fair price.

Today, however, online tools such as Healthcare Blue Book make it easy to see what providers are typically paid for a given treatment, and to make fair arrangements for care in advance. These tools save consumers money and give providers incentives to compete on cost.

Consumers willing to try a new provider in order to achieve savings have even more options:

— Health care shopping tools like PriceDoc.com are becoming broader and more sophisticated.

— Medical tourism has be- come so popular and effective that domestic hospitals are re- ducing rates to avoid losing patients to rival hospitals in other countries.

— Retail clinics allow consumers to save on basic services like vaccinations, sports physicals and treatments for minor accidents and illnesses.

— Through telemedicine and virtual clinics, what used to require a visit to the doctor can now be taken care of by phone, e-mail or online chat.

— And network discounts aren't just for insurance companies anymore. Thanks to services like Medilinq, even uninsured consumers can enjoy discounts and other benefits of being part of a group.

— Finally, budget-friendly medical practices are introducing new models that offer significant savings. PATMOS EmergiClinic in Greeneville, Tenn., for example, offers basic doctor visits at $40 and a strep test for $10.

All of these innovative firms save consumers money and create competition. The root of all this consumer-focused competition on price, of course, is private enterprise — the “private option,” if you will.

Private enterprise would have created many more services like these, and much sooner, if not for an odd characteristic of the U.S. health system: Only about 11 percent of all health care expenditures are paid directly by the people who receive the care. Most are paid for by insurance companies or the government.

As a result, the person in the best position to seek out value — the consumer — usually has little incentive to do so.

But as overall health care expenditures grow, the relatively small piece borne directly by health care consumers has grown, too. It's expected that by 2012, consumers will spend more than $350 billion out of pocket for health care, either because they don't carry insurance or because their insurance has cost-sharing provisions like deductibles and co-insurance that keep premiums low.

Because this group is paying for their own care, they tend to look for value. And as the firms and services described above illustrate, consumers' demand for good value in health care is being met with a growing supply.

Lawmakers can support the private option by allowing expanded use of health savings accounts and the high-deductible health plans that go with them. This expansion would increase the portion of health care expenditures paid directly by health care consumers, which in turn would lead to more competition among private firms to offer consumers more choices and greater savings — all without new taxes, entitlements, deficit spending, oversight boards or mandates. Imagine that.

Private firms competing in a free market — the private option — can truly remake our system for the better. Our representatives in Washington, D.C., should focus more on supporting the private option and less on pushing a “public option.”

« Columnists

Share