Tuesday, October 07, 2008

Losing the Gatekeeper

Will the cost and prevalence of arguably unnecessary tests and procedures go up or down if people are driven into "consumer-directed" health plans - plans with minimal coverage for routine care, huge copays, and benefits that really only kick in if you suffer catastrophic illness or injury? Despite the conjecture of health economists that people will make glorious, informed, cost-effective choices if asked to pay for their own care, I suspect they'll go up.

Why? Because right now insurance companies act as a gatekeeper. If their analysis shows that a particular procedure is unnecessary, or that a more cost-effective procedure will suffice, they'll refuse to pay for the more expensive or "unnecessary" test or procedure. Sure, the denials can be frustrating, even maddening, but they do hold down health care costs.

Consumers don't have the information, resources, or sophistication to make a similar evaluation of a doctor's recommendation. They may not even have a chance to reflect on whether they should agree to an expensive procedure at an emergency room, let alone inquire and evaluate alternatives, assuming they're even in a state of mind to do so. But maybe that's "okay" if it's an individual who is stuck with the bill?

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