Thursday, October 18, 2007

Automobile Health Plan

Some time back, the driver’s-side door of our family car got in an argument with a parking-garage pillar. I found a body shop to fix it and my insurance company paid the shop, less the deductible.

More frequently, an insurance company will issue a check directly to the policyholder. But in either case, the policyholder decides who’s going to fix what’s broken.

Here’s a thought: Why doesn’t health insurance work that way?

At one time that was exactly the way it worked. Of course this was before we found it much more convenient (and pricey) to fork over a copay for a doctor visit and prescription drugs.

One Overland Park woman (who asked that her name be withheld) said she needed a colonoscopy and had a high-deductible policy, but had a tough time getting a clinic to tell her what it would cost.

“I called the doctor who would perform the test and asked what the cost would be,” she wrote in an e-mail. “The woman I spoke to on the telephone was obviously shocked that I would ask such a question. She kept insisting I shouldn’t worry about it, that my insurance would cover it. I had to keep explaining to her that I had a $2,500 deductible, so that while insurance may contribute, I would in fact be the person paying for it.”

Granted, some procedures can be quite challenging and difficult to price. But we can already offer general price guidelines for things such as delivering a baby.

Colonoscopy's should be no different.

Health insurance that allows patients to pick providers would also help lower costs in chronic care, which generates the highest costs in health care. Currently, Goodman said, insurance pays by task and care is fragmented. A diabetic must visit many different providers.

Why are most consumers resistant to change when it can cost them less and give them more power?

Most people can’t imagine what a real health-care market might look like. But something similar already exists in the markets for auto and homeowner insurance.

Something we have said on multiple occasions in this forum.
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