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No Reform Without Skin In The Game
By PAUL D. TORTLAND | Posted Thursday, August 27, 2009 4:20 PM PT

The scenario is all too familiar, and plays out daily in my office. After evaluating a patient I recommend a particular course of treatment. More often than not, the first question from the patient is not, “How effective is the treatment?’ or “How safe is it?” Rather, the refrain is “Will my insurance cover it?” If I tell them, yes, your insurance will cover the treatment, their eyes glaze over and they couldn’t care less what their care will cost. If, on the other hand, the procedure is not covered, the bargaining begins: “Do you give cash discounts?” “Can I set up a payment plan?” Or, “That’s too much right now.”

It’s easy to spend someone else’s money. It’s a different story when your wallet is on the table. Currently, patients largely have no incentive to control health care costs because they do not directly bear the brunt of these costs. Sure they bear it indirectly. But we have become coddled into thinking that if we are not directly writing a check or forking over cash, then we’re really not paying. In reality it’s the insurance companies and the government currently that are the purchasers of health care, not patients. In addition, patients have become indoctrinated into believing that, simply because they have health insurance, every band aid, office visit, medication and procedure should automatically be covered. They have come to equate health insurance with health care payment.

Yet not one patient would think of filing a claim with their auto insurance for an oil change. Or billing their homeowner’s insurance for power washing the siding. Of course we don’t — we don’t want our premiums go to up! So why are people content to pay as they go for routine auto and home bills, yet not their health care?  By the same token, doctors have little incentive to control costs. Our first priority is, of course, consideration for the safety and welfare of our patients. Behind that comes concerns over liability and then maximizing revenue. Few patients realize that doctors by and large do not get paid what we bill. By virtue of the contracts we have signed with insurance carriers, we agree to a reduced reimbursement, allegedly in return for the promise of having access to that insurer’s patient pool.

Therefore, our motivation with regard to the insurance companies is to get the maximum reimbursement to which we are entitled, not to control costs. This certainly does not mean, contrary to the pablum spouted by President Obama, that we perform needless tests or procedures in order to pad the bottom line. Hardly. Rather, it means that physicians are not incentivized to keep costs down. Why would I charge $50 for an office visit for which an insurer will pay me $75? The bottom line is that neither patients nor physicians have “skin” in the game, to use a popular sports phrase, with regard to controlling costs. The patient has no stake if the care is covered by their insurance. And the physicians stand to lose more if they don’t seek the maximum reimbursement allowed.

Only when patients are the true consumers, paying for their health care out-of-pocket, and physicians, hospitals, and pharmacies are competing with one another for the patient’s dollar, can true reform and reigning in of costs occur. History is compelling — it is competition in the open market that drives prices down and quality up. State-controlled industries inevitably fail.

Granted, there are those among us who can ill-afford to pay for such care. For those (estimated to be between 12 and 15 million Americans) it would be far cheaper for the government to issue health care vouchers, enabling those persons and families to shop around for the plan that best meets their needs, than it would to commandeer one-seventh of the U.S. economy. It would also result in much better and cost-effective care.  Such a voucher system would also force those patients to be judicious in how they spend their voucher dollars. Free public health clinics and emergency rooms are overrun with patients seeking care for a simple stubbed toe or a little tickle in the throat, visits that one would be much less likely to make if there were skin in the game. Both access would improve and costs would go down.

Sadly, the current administration seems less interested in improving care and access, and reducing costs, than it does in controlling an ever-growing portion of the lives of Americans. It wants more of our own skin, with no skin off its own nose.

Tortland is a sports medicine physician practicing in the Hartford, Conn., area and former president of the Connecticut Osteopathic Medical Society.

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