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Selling Access to Healthcare
The fundamental problem with healthcare is that there are gatekeepers and middlemen who are holding it hostage.
Selling Access
The easiest way to tell if a politician is dissembling about healthcare is if they talk about “access to healthcare” as opposed to addressing how to actually provide affordable healthcare to those that need it.
The concept of “access to healthcare” has become the “thoughts and prayers” of healthcare legislation. It sounds good but it’s not the same as actual impactful action or meaningful policy. Being able to access healthcare doesn’t mean that it will be good healthcare, or that it will be affordable.
This is a bipartisan problem. As it turns out, neither side of the political spectrum is particularly interested in proposing real solutions to the real problem of unaffordable health care. The reason is that both parties don’t really want it. They all benefit from the copious amounts of money, both in legitimate campaign contributions and lobbying, as well as through unaccountable dark money from entrenched industry interests.
The question is, who is the political establishment trying to protect? The answer is the health insurance companies who sell consumers access to healthcare providers and products through insurance plans, the pharmaceutical companies, and the hospital systems.
Here’s a chart drawn from data provided by the Center for Responsible Politics, a political watchdog organization dedicated to figuring out where all the money in politics is coming from, and more importantly, to whom it is going.
Asking All the Wrong Questions
Intentionally or unintentionally, no one in the media or on Capitol Hill seems to be talking about one of the primary drivers of high healthcare prices in the United States: third-party payers such as insurance companies and, in some cases, the federal government.
What are third-party payers?
Third-party payers are companies, groups, organizations, or even governments who intervene in the market, and in doing so, distort the marketplace.
Under an ideal free market paradigm, competition drives innovation and delivers the most services to the most people at the lowest costs.
"Practices such as hiding the true cost of procedures from consumers, or forcing consumers to only go to preferred in-network facilities, not only make the market less free, it makes it much easier to extract money from consumers."
--- DR. CRISTIN DICKERSON, MD
For example, a clinic that is understaffed, with long wait times, and that provides a lower standard of service cannot compete with another health clinic with no lines, no wait times, and the best doctors. The underperforming clinic would go out of business.
However, thanks to a whole host of monopolistic business practices such as in-network schemes, tiered services, and opaque price-setting negotiations, health insurance companies effectively circumvent traditional free-market logic. The goal of these business practices is to reduce competition and obscure the free market from consumers in the name of profit.
An insurance company might, for example, financially incentivize its customers to only go to the underperforming clinic despite a better alternative because the insurance company has a profitable deal with that clinic.
Practices such as hiding the true cost of procedures from consumers, or forcing consumers to only go to preferred in-network facilities, not only make the market less free, it makes it much easier to extract money from consumers. By making the process of obtaining healthcare as complicated, unknowable, and opaque as possible, health insurance providers benefit and profit greatly by selling uninformed consumers access to healthcare.
Unfortunately, everyone in the media and in politics is asking the wrong question. Instead of addressing the problem of third-party payers and middlemen, they promote talking points and line the pockets of health insurance executives by emphasizing “expanding access to healthcare”.
This idea of “expanding access to healthcare” (i.e. expanding the role and power of health insurance providers) is perhaps the biggest trick played on the American people. It is one of the most destructive talking points ever conceived in a corporate boardroom and exported to Congress for distribution to a complacent national media.
The Affordable Care Act (ACA): The Compromised Compromise
Nowhere is the emptiness of this bipartisan talking point more exposed than in the slow-motion implosion of the ACA over these many years.
In many ways, the ACA did exactly what it set out to do: it expanded healthcare coverage to nearly 20 million previously uninsured people. But because it was never updated or fine-tuned as Medicare has been year in and year out, it has become a massive boondoggle for health insurance companies who, it should be noted, complained the entire way to the bank that the ACA would make their operations unprofitable.
In reality, the ACA essentially presented the insurance industry with a 20 million-person-strong market for free. It also did nothing to address the role or the power of the health insurance interests. Without addressing the gatekeepers and middlemen who are hawking access to quality healthcare and charging a massive premium for it, there was never any real hope that it could control healthcare prices. After all, it didn’t address the root of the question. They were asking the wrong questions all along. And in doing so, they compromised where they shouldn’t have and failed to compromise where they needed to. Instead of making things better, government intervention into the healthcare market with no fine-tuning along the way only made it far more distorted, monopolistic, and favorable for giant health insurance conglomerates.
Let’s call the ACA what it really is: a deeply compromised compromise. With its heavy market intervention and enormous concessions to health insurance companies, it could never chart a truly unencumbered free market approach.
The status quo hasn’t meaningfully changed. We failed to ask the right questions and, as a result, we’re all paying for it now in the form of higher premiums and reduced healthcare coverage.
Even employers who self insure (pay out of pocket for their employees' health care rather than buy an insurance policy for them) are subject to this boondoggle by the traditional insurance carriers. They not only pay them to process claims, they; also pay them for "access to their network"; what is special about a network that includes most doctors and why should there be a charge for that?
Additionally, even cost-conscious self-insured employers can be unwittingly paying for access to care in that some cost containment companies pay brokers commissions when employers use their services, a cost passed on to the employer and rarely disclosed. A company that schedules medical imaging nationally pays brokers and TPAs $100 per MRI scheduled.
Saving Health Care
A free market approach is an excellent way to promote businesses that provide the best care at the most competitive rate. However, success of free markets is dependent on ethical participants.
In order for the free market to work, it needs to be cleaned up. We need to eliminate or mitigate the barriers that have either been purposefully erected or have developed over time and become entrenched. These barriers to the free market include health care monopolies and cartels, "not-for-profit" entities creating an uneven playing field, hidden pricing and commissions, government intervention, and unnecessary middlemen. The goal should be to allow natural market forces to run their course within a framework of compassionate design. A more direct and free market is the first step toward saving American health care.
DR. CRISTIN DICKERSON, MD
