The power of patients and healthcare choices
Most of the recent efforts to reform our country's healthcare system have been focused on the development of accountable care organizations. This attempt to bend the curve of increasing Medicare costs has led to a frenzy of efforts to create integrated healthcare provider organizations that will decrease costs by more effectively managing the care of Medicare patients.
The accountable care organization initiatives also hold the promise to set a pattern that will hopefully extend to the private insurance market since Medicare payment trends are often adopted by healthcare insurers and self-insured groups. But based on what might be categorized as anecdotal evidence, it also appears that the high cost of health insurance premiums and out-of-pocket cost to the private insured patients might have reached a pricing point where consumers are willing to make tradeoffs between choice and costs.
In recent weeks a colleague related to me a situation in a community where the superintendent of public schools approached the teachers with a critical choice. The school district could either renew its health insurance policy with the existing provider network and pay for the increased premiums by reducing the number of teachers through layoffs and increasing class size, or maintain the existing number of teachers and select another health plan at a lower premium with a network that excluded a major community hospital. The teachers elected to accept the lower cost alternative and travel greater distances for hospital care.
There is some evidence that what this is not an isolated and remote occurrence. In a recent article futurist Ian Morrison notes that consumers have recently expressed a willingness to give up choice of hospitals, and to a lesser extent, physician specialists, in order to have lower monthly premiums.
Morrison says the idea of tiered networks is certainly not new, but that increased cost pressures in a weak economy, the greater availability of real-time pricing information, and motivated buyers and sellers may mark the beginning of a "spot market" for healthcare services. For him the definition of a spot market is the existence of willing buyers and sellers making purchase decisions in a transparent marketplace for hospital and specialty services.
It will be interesting to see if this "spot market" concept becomes a trend and how it may impact the idea of healthcare provider consolidation as represented by accountable care organizations.
Mike Stephens blogs regularly at Action for Better Healthcare.
