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By wvmcl on Thursday, Dec 26, 2013
I’ve been critical of a lot of the Washington Post’s coverage of ACA implementation, but sometimes they get it right, and they did in the Dec 26 editorial titled “Health Care Economics 101.”
The piece points out that, alongside all the hand wringing about keeping or not keeping your own doctor, the move to narrower networks is a simple matter of free market economics. We hear a lot about “choice” in health care providers, but we tend to forget that our choices have price tags attached. I may choose to drive a Cadillac, but if my budget won’t allow it, I’ll be driving a Chevy instead.
As the editorial points out, negotiated rates with a network of providers is one of the few tools available to insurance companies for controlling costs, especially now that they are required to provide coverage for all comers. In the past they were able to control their costs by excluding the most in need. Now that this is no longer possible, negotiation of favorable rates becomes even more important if insurers are to offer affordably-priced plans.
After the break, a list of points to keep in mind about the whole “choose your own doctor” thing, which I suspect we’ll be hearing a lot about in the weeks and month ahead.
Some points:
1. You can see any doctor you want, as long as you pay for it yourself. This point may seem obvious or flip, but I think it needs to be stated up front. There is nothing in the ACA that forbids you from going to any provider who will take your money. Just because you have insurance doesn’t mean you are required to use it. The only question is what will be reimbursed and at what rate.
An obvious corollary to this is that, if you are uninsured, you have complete freedom to "choose your own doctor," since you will have to pay the cost out-of-pocket in any case.
2. He/she is not “your” doctor. To say “my doctor” is just a manner of speaking, the same way we say “my garage” or “my hairdresser.” They don’t, of course, belong to us. “My garage,” the place I take my car to be fixed, is a business from which I purchase services. If it closes down or stops providing services I want to purchase, I will have to find an alternative. The same is true of health care providers. The old family doctor whom we saw for a lifetime was always something of a myth and certainly is today.
3. The exchanges should eventually provide a range of options. It’s early days yet for the ACA exchanges. As the reform matures, more options should be provided if consumers demand them and are willing to pay for them. Plans with narrower networks will, generally speaking, be cheaper. Plans that provide a wider range of providers will be more expensive.
Many employer-based plans (such as my own) have a two-tier reimbursement system – a higher rate for in-network and a lower rate for out-of-network. This type of plan lets you use any provider as long as you are willing to foot the extra cost to go out-of-network. As the exchanges develop, these types of plans may become more widely available on the exchanges. Again, consumers will have to decide whether the extra choice is worth the extra expense.
4. You can get the care you need within the network. In almost all cases, I expect that the networks of reputable insurers will include the complete range of specialties and services you will need for virtually any medical condition. Medical procedures are pretty well standardized these days. Another myth that is floating around is the super specialist or institution that is the only one that can cure your particular ailment. This is the stuff of fiction (Breaking Bad, for instance) but is rarely the case in reality. In those highly unusual cases in which a particular specialist or procedure is need for a rare condition, many plans have an option to go out-of-network with pre-approval from the plan. That means you will have to negotiate with your insurer, but what else is new?
If the network you are using proves unsatisfactory, you will have the opportunity to change insurers at least once a year. This is where good old free market economics should come into the picture, encouraging insurers to provide the products that people want to buy.
Some locations, particularly rural areas and some red states, may have a limited range of network options, at least at first. I’m hopeful that this will improve as participation rates grow. However, part of this is simply the age old urban-rural gap. If you live in a big city, you will have more health care options (along with traffic, pollution, crime, etc.). Rural areas have a quieter life, but you may need to travel further for health care. Another choice.
I’m presenting these points as a way of trying to organize my own thinking and that of others on this complex topic, which, as I say, I think we will be hearing a lot more about in the months to come. Will appreciate any additional thoughts from readers.
