A certain segment of the political left is, shall we say, lazy in its critique of letting consumers control their health care dollars and decisions.
For example, I recently wrote about my experience using my health savings account (HSA) to pay for medical care after I tore my anterior cruciate ligament. When my orthopedist learned that I faced a high deductible, he helped me weed out unncessary expenses that would provide little benefit. In particular, we skipped an X-ray because I didn’t hear or feel any bones break, and he agreed there (probably) would be no harm in doing so. The only reason I shared that information about my injury, indeed the only reason we gave the X-ray a second thought, was because I had a financial incentive to do so: I was paying for the X-ray.
Big deal, says Ezra Klein:
That’s all for the good, when it’s all for the good. On the other hand, that’s just a hop, skip, and a jump away from “She had shortness of breath, but no radiating arm pain, so she decided to wait through the weekend because she couldn’t afford the ambulance ride. She died.”
Here’s why that’s lazy.
Klein knows that when people face additional cost-sharing, some patients will forgo some medical care and some of those patients will end up less healthy. But he also knows that when people have HSA-like coverage, on balance, people do not end up less healthy.
That’s right: for every lady who loses her life because she didn’t call an ambulance, someone else’s life is saved because he or she kept the doctor away. (Remember: guns don’t kill people, doctors do.) So it’s no refutation of HSAs to note that some people who forgo care will suffer.
Klein’s critique is of course more nuanced than “HSAs…bad!” After all, he himself supports cost-sharing – if done smartly, by people with expertise. If cost-sharing is devised willy-nilly, he says, people get hurt. For example:
A recent study looked into what happens if you increase cost sharing on pharmaceuticals in Medicare. In other words, what happens when the patients have what Cannon calls a “financial incentive to avoid unnecessary spending.” The answer? “[S]ubjects whose benefits were capped had higher rates of nonelective hospitalizations, visits to the emergency department, and death. In addition, subjects whose benefits were capped had lower pharmacy costs but higher hospital and emergency department costs, with no significant difference in total medical costs between the two groups.”
Here’s why that’s lazy.
First – and I’m sorry that I have to repeat this – the best evidence available instructs that, regardless of what the cost-sharing looks like, cost-sharing does not lead to worse overall health outcomes.
Second, if greedy insurance companies can save money and lives by eliminating cost-sharing on certain medical expenses, they will do so. (Why? Because they’re greedy, and offering more health for less money gives them a competitive advantage.) Of course, the literature is mixed on whether cost-sharing for pharmaceuticals increases or decreases overall medical spending. But assuming that coverage for certain medical services will actually save money overall, who does Klein think will sooner identify and eliminate cost-sharing for those services: government or the market? Before he answers, he should consider that the market brought prescription drug coverage to consumers, oh, 30 years before Medicare did.
Third – and this is the kicker – Klein’s preference for planning-by-experts is what produced the very style of cost-sharing that he derides. The requirements for an HSA-qualified high-deductible health plan were devised by Congress, not the market. The Medicare drug benefits in the study he cites (above) also were not designed by the market. They were designed by Congress and employers. And when Medicare finally brought drug coverage to all seniors, Klein still didn’t like the result.
Klein may object that it wasn’t his experts who wrote those laws, or even that he doesn’t want Congress meddling with what his experts decide. But the loyal opposition’s experts will always be around. And I don’t know how he plans to get around that whole Article I thing.
If Klein wants experts to calibrate cost-sharing, he has to include the entire political process – including his ideological opponents (hellooo!) and every wretched lobbyist for the health care industry – in his model. He has to argue that that process will calibrate cost-sharing better than greedy insurance companies who have to provide value to consumers who control their health care dollars.
I look forward to him making that case.