February 17, 2012

YOU JUST HAVE TO MAKE MEDICINE HURT THE CONSUMER:

The Myth of Runaway Health Spending: The growth rate of national health expenditures has been declining for a decade, driven by better medical care and consumer choice. (J.D. KLEINKE, 2/17/12, WSJ)

New data show that health spending over the past several years has been normalizing toward the rate of general inflation, rather than growing higher and higher, as had been the case almost continuously since the 1970s. [...]

The moderation has been driven by cumulative improvements in medical care and by insurers, and by marketplace disciplines on the demand for medical care. Consumers are finally getting more involved in managing and paying for their own care. [...]

Much of this change got off the ground around 2001 as managed care (i.e., the hated "HMOs") gave way to a renewed era of unlimited consumer choice and access--for a price. Those with insurance were suddenly free again to choose whatever health care they wanted, but this time with their own money. Higher deductibles, new co-payments, Health Savings Accounts, "tiered" drug plans--these were all rolling out between 2000 and 2004, the same years that health-care inflation was starting to cool.

Suddenly, a $5 generic drug might work just as well as a $50 branded one. People concluded that going "out of network" for an extra $100 out of their own pocket might not be worth it. It turned out that a nurse practitioner in an urgent care clinic can spot an ear infection for $30 a whole lot faster than an emergency-room physician can for $1,000. There were many new drugs available, many others going generic and some, such as Tagamet for ulcers and Claritin for allergies, even going over the counter.

Once Republicans return to office they just need to tweak the mandate towards universal HSAs.  The Third Way works, you just have to put it to us harder.
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Posted by at February 17, 2012 7:05 AM
  

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