People make bad decisions - The recent awarding of the Nobel Prize in Economics to Richard Thaler provides an important backdrop for this question. Thaler and his predecessors in behavioral economics, notably Amos Tversky and Daniel Kahneman, exposed the disturbing tendency of people to make bad decisions about purchasing goods and services.
Recent, germane examples of this human foible come from studies done on people purchasing Obamacare exchange policies, which showed that the names of the plans—bronze, silver, gold—heavily influenced their decisions. So did the order in which the plans were presented on information pages. Plans that stated the premium cost per week rather than per month were highly favored, even though the premiums were identical.
If humans veer so easily off-course on such simple issues, it is hard to imagine them handling the almost innumerable considerations presented by classical commercial plans. The Affordable Care Act made great progress in simplifying or deleting many of these considerations— pre-existing conditions, maximum out-of-pocket charges, co-pays, coverage for women’s health and childbirth, coverage for psychological disorders. But even Obamacare options (including key issues of physician panels and medication coverage) overwhelm the human intellect and emotional center.
Easier choices needed - If humans are having trouble making wise decisions about dish soap and paper towels (as I certainly do), we need to make choosing health plans far easier. Health Savings Accounts (HSA’s) emerged from Congress in 2003, touted as remedy for the complexity of health plans as well as a welcome return to the days of yore when ordinary people could pay their own medical bills.
This theoretical return to market forces provides its holders with an exclusion of a portion of their income from taxation—until death—for use to pay for medical bills. Regrettably, the simplicity and free market initiative stops there. An HSA account is not insurance, so one must buy a high-deductible commercial health plan and face complexities that rival, if not exceed, those of standard commercial plans. Even though HSA’s are not suitable for many households with low incomes or ongoing medical expenses, HSA’s have been growing at a steady 20% yearly, with 22 million in place.
Insecurity abounds- Our President’s current proposal to undo the Obamacare mandates for qualifying health plans that could be sold across state boundaries takes us back to heightened complexity and insecurity for customers of health plans.
At the same time, weakening the grip that state insurance commissions now hold on licensing insurance plans could be a step forward in reducing our health care bureaucracy and stimulate innovation on a national scale.
Access for all - In the long term, the roadmap to better health care should be a relentless advocacy of on-the-ground access for all and of transparency of cost and quality. There are promising models that augur a spontaneous evolution of such systems.
Sadly, there are counter-models of monopolism and self-interest. To its credit, the Centers for Medicare and Medicaid has, against diverse opposition, sponsored projects to study the performance of a variety of coordinated health systems. We should do more and do it better.