A few thoughts about the health-care marketplace

Filed Under: Costs, Patients, Providers

BrillTimeMagCover

Is it time for rate-setting in the health-care marketplace?
Is it time for single-payer health care? Or an end to the entire for-profit system of mis-aligned incentives? Or transparency?

Can we continue in this vein?

The article Steven Brill wrote in Time magazine’s current issue about the rising cost of health care, “Bitter Pill,” has brought a great deal of attention to the problem of rising costs. And, predictably, there are a number of reactions.

Insurers are certain that providers (doctors, hospitals) are to blame. Providers blame insurers. Everybody’s upset with Big Pharma. Government comes in for its share of criticism as well — and, it seems, no one has a suggestion for a certain way out.

Perhaps this is true because none of the parties in the marketplace want to give up their piece of

the pie. After all, each of those entities has a vested interest in business as usual, or even better business that grants that entity a bigger piece of the pie.

And each of those parties wants to continue relationships with current suppliers and service providers: for hospitals, let’s say, suppliers of gauze and bandages. And consultants to advise on how to make sure bills are fully categorized, itemized and paid. Not to mention doctors, nurses, porters, and receptionists. Billing clerks and valets. Light bills, fuel to run the boiler, venetian blinds … And, yes, more consultants to analyze pay rates.

Beyond that, providers and payers are happy to blame people who are patients (or consumers, depending on which phrase you like). This narrative has patients taking all the health care they can get, an endless stream of health care, because they don’t pay for anything and therefore can have as many MRI’s as they want.

So what’s to end this endless spiral of rising prices? Could it be rate-setting? Some people think that’s the only way out: the government fixes prices.

There are a number of examples of rate-setting in this marketplace: the state of Maryland, Medicare and Medicaid, the Veterans Administration for example. In Massachusetts, rate-setting is being put into effect, with mixed success so far. And yet I wonder: if you set rates suddenly, tomorrow, then don’t you have the existing parties in the marketplace fighting harder and harder in complete opacity for an ever-shrinking piece of an ever-shrinking pie?

So that leads us to sunlight and transparency: if the rates were set and the marketplace was transparent, and everyone knew what they were going to pay, would that solve the problem? Would the patient have any idea whether the existing for-profit entities were, in complete transparency and with set rates, acting for the good of the patient? After all,  a for-profit entity exists to make profits, and that can be at odds with the goal of curing illness and preventing disease.

Nonprofits in this marketplace, we have observed, often commit acts more mercenary than the for-profits. (I could name names, but I won’t.)

So let’s remove the profit motive, then, and make all the entities in the marketplace nonprofits, with complete transparency and set rates. That starts to sound more like a case in which the incentives are aligned, sunlight has disinfected the dark places of the marketplace and the prices are set so no doctor or hospital, say, is making more than another doctor or hospital for the same service.

And about the patients: When patients are knowledgeable, engaged and confident, they feel better and do better. Studies have shown this, but more than studies, it’s just common sense. The engaged patient movement, led by revolutionaries like e-Patient Dave De Bronkart, Jamie Heywood of PatientsLikeMe, and Natasha Gajewski of Sympleapp, is at the forefront. That’s the most important part of the equation, after all.

That starts to sound like a solution.