Health Care Consumers Will Ultimately Control Health Care Costs

Consumption is the sole and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.

Adam Smith (1723-1790), an Inquiry into the Nature and Causes of the Wealth of Nations (1776)

October 19, 2012 -   In the health system, physicians produce health care goods, and patients consume them.

In the American system, however, the middleman, Medicare, Medicaid,  and health plans, and the regulations and restrictions they impose, account for much of the cost to both physicians and patients.

This is not widely understood.  The public and policy makiers  tend to think physicians, under a fee-for-service system, generate the bulk of the costs by setting their own fees, always adjusting them upwards to generate personal wealth or to maintain a life style, and by performing unnecessary procedures or ordering unnecessay tests

Gregory E. Polito, MD, a urologist from Whittier, California, sets the matter straight:

“Fee-for-service medicine (FFS) expired many years ago when Medicare instituted price controls on physicians’ fees and hospital charges, and then all the medical insurance companies followed suit.  Providers may feel free to bill for any amount they wish but they are only going to get paid a present amount.  The only FS practices remaining are cosmetic surgeons and those physicians who accept cash only.  Look for those numbers to increase.

Polito goes on:  we must “put patients back in charge of the care rendered them by having them write a choke of it, subsidized though it may be.  This remains the most effective control mechanism FFS inevitably controls all other economic transactions, and it needs to be restored to its rightful place ion medicine as the ultimate arbiter of excellent. " 

But how?

Professor Michael S. Ellis, MD, an ENT specialist of the Tulane School of Medicine recommends these solutions:

“Real solutions include high-deductible major-medical insurance policies with health savings accounts for minor expense (both provided for the indigent), add a sliding scale for others.  What we need is true transparency of actual “cost” data and for all providers and meaningful tort reform, in which, ideally, the loser pays as in every other country.

Rick Parkinson MD.a dermatologist from  Provo, Utah, chimes in:

"Let doctors do what do best – cure patients.  Let patients cure health-care costs by doing what they best in a free market – shop wisely.  I can attest from over 30 years in practice that self-pay patients always ask what my services are going to cost, and they  typically make wise and cost-savings solutions."

Tweet: In the long-run, it will only be health-care consumers, spending a portion of the bill with their own money, who control health care costs.

Source:  Letters to the Editor, October 19, 2012, Wall Street Journal