The Search for the Mythical Consumer-Driven Healthcare

I wish more people understood and appreciated what Michael Hitzlik is saying in his LA Times column:

To begin with, true consumer-driven healthcare requires three things. These are: information about the prices charged by competing providers for given treatments; reliable data about the outcomes of medical options for treating any given condition or syndrome; and consumers who are inclined or able to base their healthcare decisions on the first two factors.

Comparative prices are hard to come by today even in intensely competitive healthcare markets such as big cities, much less in regions with only a small number of providers. Comparative outcomes? These often are hard even for trained clinicians to determine, and even then only after years of research; expecting patients to have this data at hand is chimerical. Finally, the vast majority of patient decisions may be utterly independent of cost and known outcome.

The key question really is how consumers actually respond to cost and price incentives. That’s because consumer-driven healthcare invariably relies on price signals to guide consumer behavior.

The answer is that although “consumer-driven healthcare” does result in patients economizing on their healthcare spending it doesn’t necessarily result in lower costs for two reasons.

First, patients frequently don’t distinguish between necessary care and unnecessary care. They’ll skip doses of medication to save money or stop taking it entirely. They won’t make follow-up appointments. And so on.

Additionally, much of healthcare is physician-driven. By training, predisposition, and incentive physicians are inclined to provide more care.

The consumer that we should be looking at is not the patient but the physician. The PPACA took baby steps in that direction but that’s all they were. Baby steps.