Affordable Healthcare
This week I listened to a lecture given by Dr. Sean Flynn about the potential benefits instituting a free market direct to consumer approach in healthcare as opposed to the third-party payment system that the United States currently uses. In doing so, he discussed the current healthcare system that has been implemented in Singapore to great effect, and then further discussed how American companies and states could potentially institute a few of these policies. After listening to Dr. Sean Flynn’s thoughts, I must say that I found myself in agreement with what he proposed. It was very encouraging to hear that not only is there a different option between third party provider and socialized governmental healthcare, but that this free market-oriented system has been successfully implemented in different areas both internationally and domestically within the US.
Consumer Choice Leads to Higher Quality
I know the primary controversy around healthcare systems lies in price, but what stood out to me the most was the quality of Singaporean healthcare when compared to the United States. The fact that a nation could have an infant mortality rate seven times better than the US and yet have healthcare costs be a quarter of what the US spends seems preposterous. I have friends in Canada. There, healthcare has been entirely socialized and is run by the government. In fact, it is illegal for a doctor to have a private a practice in Canada. What I have observed from the struggles that my friends have faced is that the quality of this care is horrendous. With no cost to care, demand is artificially inflated leading to excessive wait times in emergency rooms, ridiculous wait times for life saving surgery, and a low standard of care. Since the government pays the doctors, the incentive is to do what is necessary to please the government. In the United States with the third-party insurance system, doctors’ incentive is to do what is necessary to please the insurance company. In a system where people are the ones who individually pay the doctor, doctors’ incentive is to do whatever is necessary to keep that person’s business be it increase care quality, create a more specialized care plan, or just decrease the price. Additionally, the doctor does not have to be as limited in the type of care that is administered. Often the treatment that is given in the United States is not what the doctor thinks will be best for the patient, but it comes down to what is covered by insurance. In the case of my Canadian friends, it often comes down to what a bureaucratic several thousand miles away has determined to be an acceptable treatment. Since both policies are supposed to cover thousands of people, they cannot be specific enough to make sure the needs of a single individual are fulfilled correctly. All that can be done is to ensure that in most cases, most people have most of what they need- which in turn leads to poorer health outcomes for some people.
Incentivizing People to be Healthy
Dr.Flynn advocated very strongly for the use of health savings accounts in conjunction with high deductible insurance policies. The idea behind this is, that a company puts the amount of that deductible into a health savings account. At the end of the year, if an individual does not use all of the money in that account for their healthcare the money is then theirs to spend however they please. One of his key points was that this incentivizes people to shop around and find cheaper places for healthcare. A great example of this is opting to take the similarly effective but far cheaper generic version of a medication rather than the name brand. I think that this has additional potential beyond even what Dr. Flynn mentioned. While I don’t think it would be as strong of an influence, I think this financially incentivizes people to make better decisions regarding their health. For instance, if I have $2500 dollars that could be mine at the end of the year, and filling a cavity costs $1000, I have a direct financial interest in brushing my teeth every night to prevent that. I think this could be said for a lot of other lifestyle choices that could lead to overall healthier outcomes.
Checkups…
I do think that there is a potential for a downside. I think that the high deductible insurance that people receive should still cover annual physicals and cleanings without people cutting into their health savings accounts. If this was not the case, and people were directly responsible for paying for their yearly physical with their “own money” it could incentivize people not to go to them. Annual physicals have been proven time and time again and instrumental in preventative medicine. I think insurance companies would be incentivized to pay for them as it may lower their chances of a significant payout even with a high deductible policy.