Thursday, July 29, 2010

Walking Away From Health Insurance

Given what I wrote in my last post about how many out-of-network health care practitioners I see, why do I bother having health insurance? I use it more than I let on: for every prescription drug that would be $270 without insurance coverage, I pay $40. My $1,200 lab bill ends up being $23. And God knows I couldn't afford hospitalization without health insurance.

I am supremely grateful that I have health insurance and that our premiums are very low in exchange for ridiculously high deductibles. However, I would really like to see the United States move away from this model of health insurance. Normal insurance is not for everyday things: it is meant to cover large costs when catastrophe hits. We don't get car insurance to cover oil changes, but car accidents. Health insurance as we know it is an anachronistic concept; it was born during World War II when companies had to freeze wages, but wanted to attract employees. Thus, health insurance was invented. It didn't cost the companies much since health care was so much simpler, and people were just more likely to die if they became seriously ill. Another reason to abandon our current ways is that insurance companies are for-profit entities that care above all about earning money. That's not necessarily evil, but when it comes to a contest between making shareholders happy or patients getting the care they need, insurance companies can't be expected to advocate for their customers. It's against their interests. The system is completely adversarial: I want my claims paid, my insurer has a strong incentive to dick around and deny it, or cover a paltry sum.

I would like to see health insurance function more like car, long-term care, and homeowners insurance: used to cover extraordinary, high-cost events. I would like to see all other health care priced for and offered on an open market. I'd like to be able to go to a web site for Radiology Clinic A and see how much they would charge me for an MRI of my cervical spine and compare it to the price of Clinic B. Cost is only one factor that I consider when choosing my health care, so that's not all the information I'd need. In this example, it would be helpful to know whether Clinic A or B has the most powerful magnets, and yes, they differ widely in the Washington area. One clinic in particular, owned by radiologists, has invested in higher-end MRI machines that yield clearer images. In this change that I'm proposing, clinics A and B -- and pharmacies and laboratories and every other player in the health delivery system -- would be competing for my business the same way every other part of the commercial sector does. I could use all of the resources at my disposal to compare the variables meaningful to me and make a choice about where I get my care. After all, we are not just patients: we are health care consumers, which is why drug marketing directed at the public is called direct-to-consumer advertising, not direct-to-patient advertising. Let us be educated consumers and consume!

I used to take a prescription vitamin for acne that was amazingly effective, but not covered by my health insurance. My jaw dropped when I inquired about the price at my local CVS pharmacy, and I thought, "I have to be able to do better than this." I found a pharmacy in upstate New York that sold me the same drug at a fraction of CVS's price. It was a much smaller business than the behemoth CVS, so theoretically CVS should be able to use its bargaining power to get the vitamin more cheaply; instead it imposed a higher markup, and I took my business to New York. Wal-Mart took this type of price discrepancy to heart and started manufacturing and selling its own brand of insulin several years ago to sell it at a much lower cost than even generic insulin already was retailing for.

I think the model that I'm advocating will allow the advantages of a free-market economy to prevail: health care providers who give the best service and who keep their prices competitive will be rewarded with business. It would also lift the ridiculous veil of secrecy around medical pricing. Once, I called the office of a neurologist who has opted out of insurance to ask how much a consultation with him cost. I was told between $400 and $900. That is a big, big difference. Doctors can't reasonably know everything that a new patient visit might entail, but they should be able to narrow the gap by more than $500.

Perhaps best of all, doctors would be freed up from the bureaucratic red tape of insurance companies that tie up their valuable time and resources. They would no longer be beholden to insurance companies' rules that they will not compensate doctors for visits longer than a set period of time, or bully doctors into changing their patients' medication for the convenience of the insurance companies. I'd like to think that removing the insurance barrier would make health care more accessible to all. Without our current system, don't you think it would allow clinics like CVS' Minute Clinic -- an in-store, walk-in clinic staffed by nurse practitioners (NP) or physicians' assistants (PA) who treat common illnesses -- to proliferate? Not everyone can afford health insurance premiums, but many more people can afford the $30 the Minute Clinic charges to test you for strep. I envision many stand-alone clinics staffed by PA's and NP's who have substantive medical education, are authorized to prescribe pharmaceuticals, and who are thoroughly trained to refer patients who need to see a doctor to an appropriate caregiver. Savvy operators of this type of practice would be open late into the night to accommodate people who find it tough to make it to appointments during business hours, and it's that kind of service that would make such outfits stand out from their 9-to-5 competition.

Obviously, in my proposal, insurance companies would shrink dramatically if they only covered catastrophic care, and I think that's a good thing.


Steven said...

Thank you, Sarah, for this very thoughtful and serious post, which deserves to be read widely and discussed respectfully. I'll vote for it. I look forward to seeing you healthy enough that you can campaign actively (if that's something you want to do, of course).

Too bad we live in a country where government policy is made and paid for primarily by the finance, insurance, and real estate industries.

Steve Shafarman

Elise said...

In order for this to work, we would have to find a way for insurance companies to offer catastrophic care *and* not have any say in what patients (consumers) owe for day to day care. Otherwise the price distortions would continue. My husband has a catastrophic health insurance policy but what he pays his doctors for checkups and his pharmacist for prescriptions is still dictated by his insurance company. It sounds like you're in the same situation since you have high deductibles yet your prescription prices are low due to your insurance company's intervention.

Or perhaps we have two different ideas about what catastrophic health insurance means? To me it's insurance that doesn't kick in until I've spent some set (very high) amount. There are at least three proposals floating around that peg catastrophic insurance (government underwritten) to a "deductible" that is a percent of a person's income. I've written a lot about these proposals and about ways to implement some type of catastrophic insurance (which I think is the best path forward) on my blog under the categories "Catastrophic Comparison" and "Five Health Insurance Issues".

elanit said...

I'm not sure this model would work well for some types of services, like pre-natal care and infant care. Pre-natal care is vital to ensure the health of mother and baby and going without it can lead to all sorts of bad things. Infant care as well- babies usually have 2-, 4-, 6-, 9-month visits, etc., to ensure they get vaccinated and are growing and developing the way they should. That must stay affordable. At least with health insurance (not all, I know), pre-natal care is basically "free", covered with your first co-payment and in the fee the doctor charges after you give birth. I can't tell you how many phone calls I received from BCBS during my pregnancy to make sure I was visiting my OB on a regular basis and asking me about my general health. I was actually quite shocked.

Sarah said...

Elanit, I hear your point, but I disagree. Prenatal care is definitely not free through traditional health insurance, even if you don't connect it to the high premiums your employer pays. But I get that it feels free to you. Because prenatal care is considered so vital, there are many government services that provide it at no charge, so women unwilling or unable to pay could still get care (see In the case of someone like me, I can totally see shopping for an OB practice based on the same criteria I laid out in the post. That's what my friend did who I wrote about changing from mega-practice to boutique practice. It's also interesting to note that the insurance reimbursement structure for prenatal care often is different than for other health care, in that it's outcomes-based, not fee-for-service.

Renee said...

Excellent reasoning!

It's time we learned from other countries - Denmark, Sweden, Germany, France, just to name a few - who manage to provide outstanding and widespread preventive care as well as access to medical treatment for illness without the real threat of bankruptcy that accompanies chronic and/or catastrophic illnes or ordinary old age in the U.S.

Good work, Sarah!