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The Promise of Technology
Health Care Reform That Won't Make You Furious

The first months of 2014 aren’t shaping up to give Obamacare any better publicity than the last months of 2013. Even as enrollment figures skewed toward older people continues to be a live issue, journalists are looking ahead to what comes once people do enroll. At Wonkblog, Sarah Kliff highlights one issue that she says is likely to make Americans “furious” even if it will also lower costs: narrow networks. More:

The move toward narrow networks in Obamacare is a function of the way the law sets up competition between insurers on the exchanges. Insurers can no longer compete by trying to be the best at only covering healthy people, or by endlessly lowering benefits and raising deductibles. So limiting provider choice emerged as one of the few levers that health plans had to hold down premiums. And a lot of them did: approximately 70 percent of the exchange plans are either narrow or ultra-narrow plans, according to a study by McKinsey and Co. The consulting firm defined “narrow” as having at least 30 percent of the 20 largest hospitals in the geographic region not participating in the plan.

As people who had their insurance cancelled move onto plans that include fewer hospitals and doctors, and as the newly insured face fewer options than they might have expected, backlash against the ACA will likely continue. This is what happens when you try to control costs by tinkering with insurance plans and coverage requirements—or even rate-setting. Instead of imposing network changes, we should be thinking about how to change the structure of care delivery such that basic services are cheaper and health care is more convenient for everyone. Seventy-two percent of respondents to a global survey said they would be willing to do basic checkups or primary care over video conference. There’s a good place to start.

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  • qet

    Before I go off (again) on the low utility of public preference surveys, is there a recent survey that reveals the percentage of primary care doctors willing to do basic checkups or primary care over video conference? Controlled for the economic interest variable (constant is more like it) by assuming they can charge and are paid the same as for in-person office visits?

    • free_agent

      You write, “assuming they can charge and are paid the same as for in-person office visits”.

      If they’re paid the same as for in-person visits, there won’t be any cost savings.

      • qet

        I know. My goal is to discover the willingness of doctors to examine patients remotely as a matter of permissible medical practice, under the most favorable (to the doctors) economic conditions, in order to keep that variable from coloring their decisions. Knowing the preference of patients for remote consultations is only half of the necessary data.

  • Steve

    I work in IT at a regional healthcare system. I believe that the least harmful way to cut health costs is to remove the incredible amount of regulation under which healthcare providers operate. I would not be surprised if fully half of all health relates costs are directly and indirectly cause by over-regulation by the federal, state and local governments and the Joint Commission (JCAHO).

    • crocodilechuck

      Keep your day job in IT, Steve. You’re barking up the wrong tree. Try these: Doctor, Pharma and hospital costs.


    • f1b0nacc1

      I have been in the same world as you (I am a DBA), and the mind-numbing thicket of regulatory red tape (how’s that for massed mixed metaphors!) is easily the biggest problem that doctors face in terms of overall costs.

  • Boritz

    …basic checkups or primary care over video conference… –TAI
    Three things to consider: N S A

  • free_agent

    I notice that the discussion of technological improvements in this article refers to “willing to do basic checkups or primary care over video conference”. The discussion of “narrow networks” seems to focus on hospitals, especially the exclusion of large hospitals. The latter suggests that the cost driver is hospital care, not primary care. And what I’ve read in the general press supports that view, that pharma costs (for most people) are relatively minor, primary care is more expensive, and the biggest cost is hospital care.

    This would suggest that the place to target technological improvement is in reducing hospital costs.

    Now I believe articles here have suggested that people would like to see more care in out-of-hospital contexts, but I’m not sure how deep that preference is. There have been consumer revolts over attempts by insurance plans to minimize the number of days people spend in hospitals, leading to pressure by regulators.

  • Jacksonian_Libertarian

    “Seventy-two percent of respondents to a global survey said they would be willing to do basic checkups or primary care over video conference. There’s a good place to start.”

    The solution to the poor Quality, Service, and Price of healthcare isn’t little tweaks like this. The solution is the “Feedback of Competition” that forces continuous improvements in Quality, Service, and Price in free markets. You get this by forcing the consumer to spend their own money out of pocket for all of the first few thousands of dollars of yearly healthcare. Only this way can you get the consumer to shop for the best deals, get only the healthcare they truly need, and negotiate with health providers for better Quality, Service, and Price. As an example of what’s possible for all of healthcare (17% of the economy), consider Lasik eye surgery which isn’t covered by insurance. This medical field has developed in just a couple of decades from Radial Keratotomy surgery to an out patient precision laser surgery with an Advertised price of $299 per eye, or about the cost of a pair of high end designer prescription glasses. It’s like available immediately drive through eye surgery for the person on the go. The entire healthcare industry could be like this with the “Feedback of Competition”, no waiting months for a doctor’s appointment, tests, and exams. Medical technology developing as fast as cell phones, with startrek like medical tricorders, and precision pharmaceuticals designed for your exact needs to the microgram and administered by wearable devices which monitor dozens of vital readings to boost your health to the peak of perfection.

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