Mutual fund/investment expert Robert Pozen is back on the health care front. In 2003, Pozen spent a year as Secretary of Economic Affairs for Governor Romney, where he explored some health care ideas, too. Now in his Globe op-ed today, “A bitter health care pill, Pozen proposes two fixes to the health care system, both which only add costs to consumers, without fundamentally improving care.
First, Pozen proposes to cut health care costs by reducing mandated benefits. We’ve been over this ground many times. Now, we don’t defend every specific mandated benefit, and we rarely take a position on proposed new ones. But we understand why mandates and minimum coverage requirements are essential to making insurance work.
The whole point of health insurance is to spread health costs out among as broad a group as possible. Some of us may need little care at one point in our lives, while needing a lot another time. If people could pick and choose which benefits they expect to need, health coverage would be unaffordable to those with high needs. In mandating a particular benefit, the legislature has determined that it’s better for all of society if the cost of the particular service were spread out among everyone. Mandates also prevent a race to the bottom among insurers, who could profit by avoiding expensive patients by not covering services used by people with chronic disease. For example, if there were no law requiring insurers to cover diabetic treatment supplies (there is; it’s here), any insurer that chose not to cover diabetic treatments would quickly lose members with diabetes. That insurer would be able to lower its premiums dramatically, since it not longer had expensive diabetic patients among its members. All insurers would be forced to follow suit.
Massachusetts already has in place a robust evaluation of mandates, with the DHCFP reporting on costs and benefits before new mandates are considered. The just-signed health insurance cost control bill includes a provision calling for the clinical review of all mandates every 4 years. In their careful study, DHCFP determined that removing every state-mandated benefit would result in a one-time savings of no more than 3% or 4% of premium costs.
Pozen’s second prescription proposes making consumers more cost conscious by charging much higher copays when patients choose more expensive sites of service. This strategy seems so attractive on the surface. After all, it works for refrigerators and laptops.
But health care is not a marketplace commodity. Patients now often have little choice about which hospital their doctor sends them to. Patients’ choices are based on trust in their doctor’s knowledge and professionalism. The patient and provider must establish a mutual trust based on the patient’s values and the provider’s expertise. Medicine must be patient-centered, not consumer driven.
Engaging patients with confidence-building tools like shared decision making allows them to make cost-effective informed choices. True cost control that serves patients builds on high value preventive and chronic care, integrated care for the whole patient, and a payment structure that rewards quality primary care. This kind of transformation of health care system is much less bitter pill.