Fund the HSA deductible, as Indiana and Whole Foods do, and put real prices on everything
(Market Watch | Sean Masaki Flynn) — As the Democratic presidential candidates argue about “Medicare for All” versus a “public option,” two simple policy changes could slash U.S. health-care costs by 75% while increasing access and improving the quality of care.
These policies have been proven to work by ingenious companies like Whole Foods and innovative governments like the state of Indiana and Singapore. If they were rolled out nationally, the United States would save $2.4 trillion per year across individuals, businesses, and the government.
The first policy—price tags—is a necessary prerequisite for competition and efficiency. Under our current system, it’s nearly impossible for people with health insurance to find out in advance what anything covered by their insurance will end up costing. Patients have no way to comparison shop for procedures covered by insurance, and providers are under little pressure to lower costs.
By contrast, there is intense competition among the providers of medical services like LASIK eye surgery that aren’t covered by health insurance. For those procedures, providers must compete for market share and profits by figuring out ways to improve efficiency and lower prices. They must also advertise to get customers in the door and must ensure high quality to generate customer loyalty and benefit from word of mouth.
That’s why the price of LASIK eye surgery, as just one example, has fallen so dramatically even as quality has soared. Adjusted for inflation, LASIK cost nearly $4,000 per eye when it made its debut in the 1990s. These days, the average price is around $2,000 per eye and you can get it done for as little as $1,000 on sale.
By contrast, ask yourself what a colonoscopy or knee replacement will cost you. There’s no way to tell. ...continues.