Individual responsibility in controlling health care costs

Pilot article Bob Newman

Health care costs will only be contained if we become better shoppers.

One of the problems with third party payers, whether private or government,  is that when someone else pays, only the best will do.

But we don’t all drive brand new Cadillacs. Some do but most of us make do with a less fancy, less safe, and less costly car. The same should be done in health care.

The proper competitor for the newest, whiz bang, cutting edge drug for gout is not an equally new, whiz bang, cutting edge gout drug from another manufacturer but rather the slightly older, but adequate off patent drug that can be had much cheaper. The cutting edge drug may work a bit faster, or require fewer doses per day, or have less annoying side effects, but the older drug is still good treatment, and the manufacturer of the newer drug will be forced to reduce his profit margin to compete.

Of course, the problem is the FDA, which has wrecked the generic drug market. Generics first became available early in my practice years. We were skeptical. But so long as the generics were properly tested for bioequivalence, they were a strong tool for competition in the marketplace.

But somewhere along the way, the FDA stopped simply testing for bioequivalence and started licensing generic suppliers. That’s why there are 132 suppliers of generic insulin in the world market, but only 3 licensed in the US, and why insulin costs 10 times what it did(real numbers) 30 years ago.

12 thoughts on “Individual responsibility in controlling health care costs

  1. One of the issues, among many, is also the virtual inability to price shop…for anything. Try to get a price list for hospital services.

    In order to be prudent consumers, the prices for everything, including drugs and services need to be transparent and available.

    Obviously, there are limitations for the average person to differentiate various procedures for similar ailments. And in medicine there are some variables that cannot be accurately accounted for.

    Yet, there is not reason a listing of common diagnostics, drugs, procedures can certainly be created. Along with success rates and other assessments.

    Liked by 1 person

    1. RE: “Yet, there is no reason a listing of common diagnostics, drugs, procedures can certainly be created. Along with success rates and other assessments.”

      To whom would you give the listing, and what would they do with it?

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      1. Patients.

        If you go to Costco, every item you see is priced and described. Or go to a car dealer service department,a list of common repairs, etc. is either posted or available for the asking.

        Product assessments can be had at Consumer Reports. Which does hospital and insurance ratings, BTW.

        If consumers, patients, could see prices for services it would be a start to making them better informed consumers of health care.

        Liked by 1 person

        1. I think the point is to allow some responsibility to be shouldered by the patients. Some changes to the healthcare insurance system would make a difference such as HSA’s, catastrophic coverage, higher co-pays, etc.

          But asking patients to be more involved in price shopping without the ability to do so is whistling in the wind.

          That is really my point.

          Liked by 1 person

        2. RE: “But asking patients to be more involved in price shopping without the ability to do so is whistling in the wind.”

          Even so, it’s hard to see how pricing information would be of any value at all to patients who receive care as beneficiaries of contracts between third parties. There’s no shortage of pricing information for the actual buyer, but a patient receiving care as a beneficiary is not really entitled to have it or even to base any decisions on knowing it.

          Dr. Tabor’s point presents a subtle version of the same puzzle. The doctor is not necessarily the buyer, either, but is spending someone else’s money when ordering medicines or other treatments.

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        3. The means would be to require the 3rd party payer, including government, to only pay for the least costly effective therapy(except for exigent circumstances) and leave it to the patient to pay the difference if he wants the cutting edge treatment.

          That will inspire cost shopping and also restraint in pricing.

          Plus, we get to use the wealthy as lab rats.

          Liked by 1 person

          1. Perhaps.

            The key is least costly EFFECTIVE therapy.

            I still feel, like you, that we need to let individuals have their own policies. Some form of HSA with catastrophic coverage and copays.

            That could be done privately or via Medicare. The advantage of Medicare is that everyone would be covered through payroll tax increases over the present 3%. And universal premium payments would bring in the young and healthy immediately.

            Liked by 1 person

  2. Although I am adamantly opposed to socialized medicine, especially due to personal experience, I can say that it isn’t easy to compare pricing and usually not an option. What I am most puzzled by is why insurance negotiated pricing of medical care cant be THE price. That said, I am open to hearing this out.

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    1. …”why insurance negotiated pricing of medical care cant be THE price.” Good question. Perhaps one answer is overhead. The insurance company’s not the doctors or hospitals.

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    2. You’ve hit upon a big sticking point regarding pricing. Not cost, put price, and there is a difference.

      If an alien landed and took a fresh look at what we have, a curious question would certainly arise:

      “If you can’t afford health insurance, why are you charged many times more than those who can afford it?”

      I know the market reasons. The power of volume in negotiations.

      Yet, even that now has a twist in more recent years. Big hospital groups, like Sentara for example, are now buying up doctors groups. They can offer attractive facilities, administrative relief, etc. so a well respected group is now under Sentara’s wing.

      Here is the catch, however. Whereas in the past, fee negotiations with doctors were favoring the insurance companies. “We’ll pay you these rates in return for providing lots of customers”. This put a downward pressure on prices and fees.

      Now, Sentara has the best doctors, so it can say,”pay our fees and we’ll let you put us in your network.”

      The power has shifted. Reimbursements go up, so do premiums and deductibles.

      Liked by 1 person

  3. While I don’t support M4A, it appears as if that would be the only way to fix the issue. But I would be supportive of the public option for those who want it.

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