Real Health Care Reform: Reduce Our Need for Third-Party Payers

Nationwide there is much consternation and debate about what sort of “healthcare reform” might cure our health care system’s many ills, its growing price tag in particular. Of course, there is no shortage of answers and opinions about possible solutions or improvements. To be sure, the issue is highly complex, so there is room for much concern and debate. But since quality of health care is indisputably better than ever, it is important to focus on what actually needs to be reformed. The health care itself is good – what needs to be reformed is how we pay for and how we reduce the need for health care.

That the root cause of many of our health care system’s woes is a broken third-party payer system is difficult to deny. Rather than healthcare provider and patient conducting a simple economic transaction – one party provides care, the other party receives and pays for it – our healthcare system’s current payment methodology requires involvement of a third party insurer (or other “payer”) with a powerful financial interest in the provision of health care, no real ability to evaluate the patient and her health needs, yet strong influence in decisions affecting how or what health care is provided. While the patient wants (and expects) the doctor to provide medical judgment and care, she wants (and expects) someone else (the payer) to pay for it.

Before World War II, this horrible dynamic — a third party paying medical bills and influencing medical decisions — did not exist as it does today. With the advent of “health care insurance” as an employer-sponsored benefit to compete for employees, the American consumer’s mentality about health care began a transformation that led to the current consumer’s mindset: “who will give me health care”? Or, “where is the health insurance to which I am entitled?” This entitlement thinking drives the third party payer system and increases health care consumption.

Although there may be a place in health care for true insurance – protection for an individual or family against unaffordable expense associated with unexpected, high-cost health events (e.g., heart bypass surgery) – the notion now utterly engrained the typical American consumer that doctor visits, drugs and other regular health care should be “free” or “insured” is a costly one that will have to change to make room for the type of reform really needed.

The health care “reform” needed is not more insurance or “free” health care. Rather, our system needs steps that will train consumer thinking in the direction of (a) wellness and prevention (e.g., good nutrition, daily exercise, not smoking), to reduce the need for health care treatment; (b) paying for their own health care needs, so that they will associate a cost with treatment and other health care consumption (and hence be more particular about their health and their “buying” decisions for health care treatment); and (c) insuring only against true risks – unexpected health care events that require care not affordable without insurance.

As reported today in a CNN article authored by Dr. Danielle Ofri, physicians are fed up with dealing with insurers’ red tape, mind-numbing paper work, and arbitrary claim denials or delays. Many have left or will leave medicine altogether. Less doctors means less patient access to care. And Patients are tired of waiting to see their doctor (whether it be getting an appointment or waiting in a waiting room), computer-generated Explanation of Benefits forms that are impossible to understand, and increasing “co-pays” and premiums that drive insurer profits, problems that will only worsen with more government regulation styled as “reform.”

Real “health care reform” should be focused on reducing our Nation’s unfortunate dependence upon third-party payers, both government and private. Steps that would reduce the involvement in health care of third-party payers, combined with strong education and financial incentives for wellness, good health and prevention (rather than treatment) would dramatically improve our health care delivery system and ultimately cause real reform.

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*Disclaimer: Thoughts shared here do not constitute legal advice.