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Is Consumer-Directed Healthcare The Solution to Insurance Costs?
Written by Yamileth Medina
Monday, 02 November 2009 00:00

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Newsroom - Healthcare Reform
The cost of health insurance has rocketed over the years. Many have cited the increased the use of health care services as a reason. As a result, any form of healthcare reform must reduce spending. Some people fear that a public option run by the government would lead to rationed care and negatively impact Americans' health. However, there are other ways to make health insurance less costly. Consumer-directed health care, often likened to high-deductible health plans, would control expenses by putting them in patients' own hands. Part of the reason healthcare is so expensive is because consumers are unaware of how much services actually cost. The North Bay Business Journal's Lary Kirchenbauer suggests that consumer-directed healthcare is a main part of the solution. Individuals and families already bargain shop to find the best deals on over-the-counter medical supplies like Tylenol and bandages, so expanding our out-of-pocket spending might be a way to fix our current system.

Unlike most other types of insurance, health insurance is expected to cover nearly all medical expenses. Patients are unsure of what their symptoms actually mean, so they believe that they're better safe than sorry and visit a doctor. Breathless news coverage of deadly illnesses and freak accidents causes paranoia in even the most logical people. Why take the risk if, under typical health insurance plans, your only out-of-pocket expense is a tiny co-payment? Also, many people assume that the doctor will set them straight. Unfortunately, some physicians have motivations other than providing quality, cost-effective healthcare. If you come in demanding a medically unnecessary examination, some doctors might acquiesce and perform the procedure; if they don't, and you later fall ill, they may be vulnerable to a malpractice lawsuit. This occurs when a patient is unaware of the true costs of health care. Accurate information, coupled with greater financial responsibility, would probably result in at least some patients forgoing unneeded treatment. Such avoidance could go too far, but in moderation would be very effective in lowering health insurance quotes.

Kirchenbauer's proposal is a free-market strategy for insuring more Americans by decreasing the cost of private insurance. Passing more of the costs onto consumers would allow them to shop around for the best doctors. A system similar to auto or homeowners' insurance--in which policy owners are responsible for the cost of routine maintenance--is what he recommends. Due to that, these types of insurance often cost less than health insurance.  Consumer-directed healthcare is supposed to decrease costs without a government mandate or public option. It has greater appeal, because individuals, as opposed to a bureaucracy, would be able to make their own healthcare decisions. Although deductibles are higher than standard health insurance, premiums are lower; encouraging regular health care (think oil changes for your body). Since insurers wouldn't have to take responsibility for as much cost, affordable health insurance would become available to all.

(Image: Lisa Brewster under CC 2.0)
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