Who Bent the Health Care Cost Curve?
The health reform debate is entering a new phase where compromise is in the air. The outcome continues to be of national importance, and the stakes are high for all sides of the health care equation.
The most perplexing question of the debate is how do health care policy makers slow the inflationary tendencies of the health care system, otherwise known as “bending the cost curve.” It’s not an easy question when there is so much debate on what causes health care inflation to outpace the general cost of living in the first place.
An article in the recent edition of Slate Magazine raises provocative questions about whether court rulings intending to open professional services to market competition had the effect of unleashing a commercial frenzy that drove up costs in the health care market. One of the primary questions asked within this article is whether a commercial motive is inherently inconsistent with health reform.
Ultimately, the end game is a search for the combination of best health outcomes at the lowest cost. Competitive forces can help get there if incentives are in place to keep people on their health plans for a long enough period of time to allow a plan to invest in that person’s health outcome.
Most reform proposals require insurers to provide coverage without regard to a person’s health condition. Plans will have to find ways to ratchet down the cost of expensive cases, and the regulatory structure will need to make sure that standards of care are in place. Consumers will also have to take responsibility to follow medical guidance, and financial carrots and sticks for taking responsibility are a foreseeable outcome of reform. Those of us in the business of advising consumers need to make sure they have sufficient information to guide their decisions.
Buying health care is not a market akin to laptop computers, and it is naïve to expect it to work in that manner. However, there is an opportunity now to “bend the curve” in part by using the strength of market forces and there’s a lot riding on the success of the effort.