Thursday, July 1, 2010
Today’s Health Insurance Has Perverse Incentives
Since we have “prepaid” care, we have no incentive nor does our physician to look for ways to reduce the costs. Yes, we may have a co-pay or a small deductible but that does not really get us thinking much about what is being proposed for our care.
Take drugs. Let’s say you need an acid suppressor for reflux esophagitis [acid reflux or GERD.] Your doctor could tell you to go to the grocery store and pickup Prilosec for about $30 for a months supply. Or, he or she could give you a prescription for Nexium. It would cost about $150 for a two week supply and is no better than Prilosec. But your insurance will pay for it except for your co-pay of, say, $15. So your doctor will probably suggest Nexium since it will cost you less. But the overall system is paying out a huge amount more than necessary. What a perverse incentive.
Much better if we all had insurance with a high deductible. [In practice this might mean a general insurance policy and a separate medication insurance policy as with Medicare; but each would have its own high deductible.] In that situation we pay less for the insurance and self insure for the deductible, just like car collision insurance. Now we are focused on cost effectiveness. We would purchase the Prilosec at $30 and save $120 off the cost of Nexium. Better still would be having the physician actually spend time with us to talk about preventing the reflux in the first place. Here again, if we were paying out of pocket for our routine primary care, we would expect our physicians to spend the time with us to review the following – don’t eat just before going to bed; avoid caffeine before bedtime; cut back on alcohol; avoid spicy foods; and put the head of the bed up on 4 inch blocks. These don’t cost anything and generally will solve the problem without the need for any medications. Now that is real cost effectiveness.
Praise for Dr Schimpff
The craft of science writing requires skills that are arguably the most underestimated and misunderstood in the media world. Dumbing down all too often gets mistaken for clarity. Showmanship frequently masks a poor presentation of scientific issues. Factoids are paraded in lieu of ideas. Answers are marketed at the expense of searching questions. By contrast, Steve Schimpff provides a fine combination of enlightenment and reading satisfaction. As a medical scientist he brings his readers encyclopedic knowledge of his subject. As a teacher and as a medical ambassador to other disciplines he's learned how to explain medical breakthroughs without unnecessary jargon. As an advisor to policymakers he's acquired the knack of cutting directly to the practical effects, showing how advances in medical science affect the big lifestyle and economic questions that concern us all. But Schimpff's greatest strength as a writer is that he's a physician through and through, caring above all for the person. His engaging conversational style, insights and fascinating treasury of cutting-edge information leave both lay readers and medical professionals turning his pages. In his hands the impact of new medical technologies and discoveries becomes an engrossing story about what lies ahead for us in the 21st century: as healthy people, as patients of all ages, as children, as parents, as taxpayers, as both consumers and providers of health services. There can be few greater stories than the adventure of what awaits our minds, bodies, budgets, lifespans and societies as new technologies change our world. Schimpff tells it with passion, vision, sweep, intelligence and an urgency that none of us can ignore.
-- N.J. Slabbert, science writer, co-author of Innovation, The Key to Prosperity: Technology & America's Role in the 21st Century Global Economy (with Aris Melissaratos, director of technology enterprise at the John Hopkins University).