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Group Health Cooperative and Kaiser Perma-

In order to put patients first, we will need

nente. Such corporations would compete with

to see innovation in insurance. One possibil-

ity is fixed-dollar benefits that go to patients on

other financing structures to improve quality

and reduce the cost of care.

the basis of the diagnosis. Another possibili-

ty would be insurance with higher cost-sharing

For this process to work, consumers must

control the money that purchases their health

through copayments and deductibles. A

insurance, must be free to choose their insurer

third possibility would be for corporations to

receive a fixed amount from each customer to

and health care providers, and must have

information about how different corpora-

provide medical care to that population.

tions deliver health care. One consumer may

The fixed-dollar-benefit approach has yet

prefer a low-cost corporate provider, while

to succeed in health insurance. Given the

another prefers a high-end firm. The quality of

tremendous uncertainty in medicine, and the

the market will depend on the emergence of a

fact that a lot of health care spending goes for

good set of consumer information and rating

diagnostic procedures, that approach may

services that allow consumers to see how well

have only limited applicability. However, to

various corporations are performing at meet-

the extent that it could be employed, it would

ing patient needs. All corporations would then

give patients the incentive to shop carefully for

be under pressure to deliver good value for the

treatment and to choose the most cost-effec-

consumer's money.

tive procedures.

Higher cost-sharing would also give

Deregulate the Medical Workforce

patients more responsibility for paying for

In order for health care corporations to

more of their health care directly. That would

function effectively, regulation of health care

likewise reduce the temptation for doctors to

would have to change. Regulators could evalu-

recommend procedures with high costs and

ate how well a corporation treats its patients,

low benefits.

not the credentials of the corporation's

In order for patients to be able to exercise

employees. The current model, in which gov-

better judgment, the whole process for

ernment licenses and (supposedly) regulates

billing patients probably should be changed.

each individual practitioner, could be replaced

From the patient's point of view, an itemized

by a model in which the government regulates

bill, delivered days or weeks after a hospital

at a corporate level. Government should ask

stay took place, is not particularly helpful. It

whether a corporation is operating in a man-

may be preferable for the corporation to pre-

ner that is consistent with the promises that it

sent to the patient, as soon as possible, a

makes to customers. The government should

complete plan for getting the patient well.

not have to ask whether the corporate employ-

This plan should include a fixed, all-inclusive

ee administering a test for strep throat has a

price, which can be evaluated by both the

Government

particular credential.19

patient and the patient's insurer. If the plan--

licensing of

In Maryland, where one of us lives, new

including the price--is not satisfactory, then

individual

physical therapists must have a doctorate in

either the corporation modifies the plan or

order to practice. The other lives in Virginia,

the patient goes elsewhere. Over time, if the

practitioners

plan needs revision, the parties may revisit

which does not require a doctorate. While

could be replaced

the price, as in homebuilding.

these sorts of education requirements sup-

Corporations could also offer patients an

posedly exist to protect patients, the reality is

by a model in

all-inclusive price for whatever ailments might

that they are used by professionals to restrict

which the

supply and suppress competition.20

befall them over the course of a year or multiple

government

years. This is known as prepayment, and

As patients, we do not care whether we

appears to work best when the health insurer

receive care from someone with an advanced

regulates at a

and the delivery system are part of the same cor-

degree or someone who has completed a com-

corporate level.

porate entity, as with organizations such as

pany apprenticeship. If a corporate provider

7