By Samuel Metz, M.D.
In a recent commentary at the JAMA Forum titled “The Innovation vs Consumer Protection Tug-of-War in Health Policy” [1], health economist Austin Frakt reflects on the possible sacrifice of innovation created by a single payer, universal health care plan.
“Greater regulation constrains choices, but may, in some ways, improve the options available and the choices people make,” he writes. “Market innovation encourages more options, including both helpful and harmful ones, and also allows more scope for people to make poor choices. A balance must be struck, and the left-right/protection-innovation tug-of-war that we see in health policy today reflects a debate about where to strike it.”
Dr. Frakt wonders whether consumers (his term) would be harmed or helped by a single payer plan that eliminates insurance plan innovation.
What consumers ultimately want from health care innovation is access, lower costs, and better health. When confronted with the unpredictability of human physiology and the complexity of our insurance options, consumers (we physicians call them patients) become intensely uncomfortable making choices that could lead to bankruptcy or an avoidable death of a family member if the wrong choice is made.
Professor Frakt is correct: when confronted by insurance packages with a bewildering variety of benefits, premiums, co-pays, deductibles, and networks, patients usually choose badly. Overwhelmed by the responsibility to guess which future diseases might afflict their families, patients default to plans that appear to promote their short-term financial interest, but which later prove to be against their long-term financial (and medical) interests [2-4].
Single-payer systems eliminate insurance innovation. All patients must accept one plan (single payer) with one risk pool (human beings), one set of benefits (all treatable conditions receive treatment), and one network (all physicians).
In return for sacrificing insurance innovation, patients participate in a health care system with guaranteed access, lower costs, and the best health care outcomes. This is not conjecture: for every population in which it is used, single-payer systems provide better care to more people for less money than American private insurance [5].
Professor Frakt summarizes this well when he observes that innovation includes both helpful and harmful choices. By eliminating insurance innovation, single payer removes the most terrifying choice most patients (and consumers) will ever confront. It would be a rare patient indeed who yearns for the good old days of insurance innovation.
References
1. Frakt, A. JAMA Forum: “The Innovation vs Consumer Protection Tug-of-War in Health Policy.” New@JAMA, March 12, 2014.
2. Abaluck J, Gruber J. “Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program.” American Economic Review, 2011;101(4): 1180-1210.
3. Zhou C, Zhang Y. “The Vast Majority Of Medicare Part D Beneficiaries Still Don’t Choose The Cheapest Plans That Meet Their Medication Needs.” Health Affairs 2012;31(10): 2259-2265.
4. “The Health Insurance Experiment. A Classic RAND Study Speaks to the Current Health Care Reform Debate.” Rand Research Highlights. 2006. http://www.rand.org/content/dam/rand/pubs/research_briefs/2006/RAND_RB9174.pdf. accessed February 25, 2014.
5. Davis K, Schoen C, Schoenbaum SC, Doty MM, Holmgren AL, Kriss JL, Shea KK. “Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care,” The Commonwealth Fund, May 2007. http://www.commonwealthfund.org/Publications/Fund-Reports/2007/May/Mirror–Mirror-on-the-Wall–An-International-Update-on-the-Comparative-Performance-of-American-Healt.aspx. Accessed March 12, 2014.
Dr. Samuel Metz is a Portland anesthesiologist and a member of Physicians for a National Health Program and Mad As Hell Doctors, both advocates for single-payer health care, and of Health Care for All Oregon, an umbrella organization advocating for publicly funded universal care for all Oregonians.