Free Market Forces in Health Care

August 31, 2010
Category: Uncategorized

The U.S. health care industry has remained an anathema to the American economy whose strengths have historically been built on a free market system. Harvard economist Regina Herzlinger, PhD in her book Market Driven Healthcare describes why the lack of free market forces are but one of the reasons US healthcare is, in many ways, expensive and inefficient. And most importantly, the dollars spent fail to improve Americans’ quality of life. Click here to read further http://findarticles.com/p/articles/mi_m1568/is_n1_v29/ai_19484035/. The limited focus on healthy lifestyle choices with a singular concentration to address symptoms and test results is but one of the many reasons American medicine, for its success in diagnosis and emergency care, fails to address chronic disease. According to medical school educator Clifton Meador, MD, his resident summed it up best stating “A well person is a patient who has not been completely worked up.” There is simply a lack of focus on how to educate the patient to stay well by making wiser lifestyle choices and a lack of acknowledgment that lifestyle choices can be incredibly powerful healthcare tools.
That appears to be rapidly changing. With the cost of U.S. medical care impacting the bottom line of business in a negative fashion, it appears that once again, the free market has engendered a solution. It is competition in U.S. healthcare to improve quality and drive down cost. Yes, for those who never thought those words would appear in the same sentence, free market solutions appear to be addressing healthcare challenges thanks to businesses used to the free market.
Employers are realizing a reduction in employee health care costs of up to 40% by encouraging their staff to consider domestic medical travel. That is, the practice of sending those who need organ transplants to a handful of nationwide centers of excellence has now progressed to many more types of medical care and it’s growing. Back surgery, heart surgery, and even knee surgery are procedures for which firms and insurers now negotiate a better price with an eye for the best quality care. Click here to read further http://www.usatoday.com/money/industries/health/2010-07-07-travelforhealth07_CV_N.htm.
For example, Lowe’s, a national retailer, has negotiated a three-year contract of flat-rate fees with the Cleveland Clinic for open heart surgery, heart valve surgery, and heart pacemakers. A program for orthopedic surgeries may also soon be negotiated for Lowe’s workers. Lowe’s has also joined a coalition of other large employers for negotiation purposes. The Cleveland Clinic is addition to agreeing to a flat fee for agreed upon surgical procedures also agreed not to charge Lowes, who is a self-insured employer, extra in the event of readmission due to complications from the surgery. For those consumers who would never think of paying auto repair services if their car required additional service due to the initial repair, it was a huge step forward beginning in October 2008 when Medicare announced it would no longer pay for the costs of ten (10) preventable medical errors. Click here to read further http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1995147/.
In the free market, consumers do not expect to pay for preventable complications or errors. One wonders in a system where over 2 million “hospital acquired infections that lead to over 100,000 deaths annually” occur, if that would continue year after year if insurers universally stated they would not pay for the consequences of these nocosomial infections. Click here to read further http://www.hospitalinfection.org/. The disconnect as many Americans’ healthcare is paid for by their employers further engenders a lack of outrage over this needless suffering and deaths.
With the specter of competition now in the air, how are American hospitals responding? When a supermarket chain with 27,000 workers (Hannaford Brothers in Scarborough) began to offer their employees the option to travel overseas for expensive surgeries, the local hospitals dropped their prices to match those from their overseas competitors. Employers such as Lowe’s also incentivize their workers by waiving deductibles and covering travel and hotel costs when staff go to the Cleveland Clinic for flat-rate surgeries. According to James Cailloutte, MD of the Newport Orthopedic Institute, Newport Beach, CA “that’s where healthcare is heading.” Dr. Cailloutte believes doctors and hospitals better get over being angry and embrace the new healthcare model. The free market solution often has a way of working, doesn’t it?
It has already been well documented that Americans increasingly see integrative practitioners because of their focus on how to modify lifestyle choices to achieve health. David Eisenberg, MD and his colleagues detailed these statistics in further detail in JAMA, Vol. 280, November 11, 1998, pp. 1569-75. When surgery becomes necessary, it is now another step towards free market reform that increasingly employers and insurers will utilize free market solutions to achieve cost savings and improve the quality of care. And consumers? They get it.
Deborah Ray, MT (ASCP)

One response to “Free Market Forces in Health Care”

  1. Maggie says:

    This approach obviously makes good sense. The problem is, it all goes “out the window” with Obamacare which is the exact opposite of the free market. What happens when this socialist program takes effect?

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