Minor Thoughts from me to you

Responsibility Lowers Healthcare Costs

Last week I said that "my health insurance reform plan would involve shifting healthcare spending from large premiums and all-inclusive health "insurance" plans to small premiums and plans that only offer catastrophic insurance coverage. Patients would have more money left in their pocket, to allow them to pay more money out of pocket".

Two days ago, while driving to work, I saw a gentlemen standing by the side of the road holding a sign. It proclaimed "Doctors support affordable healthcare for all". Great! I'm glad to hear it. We need more people on board with affordable healthcare.

But affordable healthcare isn't always what you think it is. Paradoxically, charging people more -- paid directly, out of their own pocket -- can actually lead to people paying less. And this isn't just pie-in-the-sky ivory tower theory. The savings effects of higher out of pocket costs are real.

The paper contends that, contrary to recently recommended policy changes by the Centers for Medicare and Medicaid Services that exclude incentives through copay or co-insurance for chronically ill beneficiaries and high-value medications that target chronic conditions, the effectiveness of such incentives in driving business-based results is documented: At Caterpillar, for example, generic statins for cholesterol management were moved to a $0 co-pay; brand-name statins, to $35 per month or no benefit paid, depending on the dose. The plan, which covers 90,000 people, saw increased medication compliance, contributing to a $750,000 per month savings to the company and $175,000 savings per month to employees.

"These barriers to the implementation of incentives actually reduce their impact and have the potential to reduce any measurable progress," the report says of the CMS recommendations.

At Caterpillar, patients were given a financial incentive: the cheaper drugs cost them less and the expensive drugs cost them more. Normally, these price differences are hidden behind a one-size fits all copay which is supported by the monthly premiums. Normally, the cost of individual healthcare treatments is obfuscated by the overcall cast of the healthcare "plan".

Caterpillar brought some of those costs out into the light -- and reduced them. Obama and the Democrats have been discussing healthcare "reform" for the pat several months. They're desperately looking for a way to "bend the cost curve" and hold down the cost of healthcare. I think Caterpillar found a way. It's simple: charge patients more and they'll pay less.

I hope everyone who supports "affordable healthcare for all" will support my plan.