While Americans are either excited, confused, or angrily tempted to repeat the words from the old cowboy ballad “Get Along Little DOGE (sic),” to the frenetic government efforts to control cost, perhaps asking the DOGE Committee to look at American health care might make sense.
Americans are paying twice as much as citizens in other advanced countries and 2-3 times more for prescription medications, while leaving a many people either uninsured or underinsured. We also trail most of the world in critical categories like life expectancy and infant mortality. There are a host of factors that contribute to that problem, but the insurance system that we use to provide health care is a big part of that failure.
I’m a huge advocate of competition and the free enterprise system. I’m also convinced that we have the best trained doctors and nurses in the world, and the best specialty care in many areas of medicine. I’ve spent large portions of my life working as a health insurance broker, managing a health care agency, and competing as a basketball player and a coach. Sadly, the dynamics of the free enterprise system, which work so well when we buy a car, a house, or other material goods, don’t operate in the health care world.
Why? A significant portion of large health care claims are sudden onset. Imagine you’re having breakfast with your significant other and you notice that he/she is slurring speech and having trouble keeping their head up. How do you react? Do you say, “Sweetheart, I need to shop medical rate pricing for a stroke at three different facilities. Just sit there and drool, I’ll be back in 30 minutes.” No, you’re going to call 911. Large sudden onset claims don’t get the benefit or the time for comparison shopping.
Even when we have time to consider comparison shopping and pricing, the odds are that you are not going to shop for medical services. The structure of medical insurance coverage doesn’t encourage consumer shopping. Rather, it disincentivizes it.
Think about elective surgery. I’m referencing large claims here. For example, a hip or knee replacement. A common element of medical insurance is a maximum-out-of-pocket. If your plan has a $5,000 maximum-out-of-pocket, then what difference does it make if Facility 1 charges $30,000 for a hip replacement, Facility 2 charges $35,000, and Facility 3 charges $40,000? The most you’re going to pay is $5,000. What benefit comes from comparison price shopping? Why would anyone take the time to price shop?
Why not do what the other 32 advanced counties do to provide health care to all their citizens: use a Medicare system that does control costs? Medicare works because it has almost every doctor in the country as part of its coverage, and it encourages preventive care to a larger extent than private insurance. I make the statement about preventive care coverage based on seeing coding with commercial insurance used as a device to move services like mammograms, colonoscopies, and annual physical exams from the category of Preventive to Diagnostic. The impact of this coding change moves services that should be 100% covered by insurance over to your deductible and coinsurance. In simple terms it is paid for by you, rather than by your insurance plan.
If we’re truly concerned about controlling cost and being efficient, why not use our Medicare system for everyone? Medicare has an overhead cost of 3%-5%, compared to a 15%-20% overhead cost for commercial insurance.
When I’m speaking to civic groups and the topic of expanding Medicare comes up, there are always questions and objections. Someone will voice the opinion that private businesses always do a better job than government. My standard response is, “I agree with that statement in many areas, but not in health care.” I’ll then ask the audience, “Who is on Medicare?” I follow up by requesting those on Medicare to keep their hands up if they’re satisfied with their Medicare coverage. Typically, the satisfaction rate is 100%. I also ask the same question about commercial insurance. The satisfaction level is usually less than 50%. Nothing is more persuasive than seeing your friends select government run Medicare over commercial insurance.
While we’re searching for cost control, quality, and effectiveness, why not ask DOGE to examine a health care system that would save Americans money and treats all Americans fairly? That seems like a good, old-fashioned American idea.
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Rob Luisana
Robert Luisana is a frequent presenter on health care issues, including NPR and Politico.
This article originally appeared on Asheville Citizen Times: Opinion: Medicare has higher satisfaction rate versus commercial insurance