I'm writing about your March 1 cover story (p. 2) that says some healthcare companies are learning the "getting back to basics" lesson. This industry may be lending itself to corporate rightsizing through myriad strategies, but getting back to basics is not one of them. If the healthcare industry wants to become more efficient, it will get back to basic economics and let the free-market system work its wonders.
What other industry insures highly probable low-cost occurrences? None that I know of. What other industry charges a per-enrollee, per-month premium in exchange for services? I wish the restaurant industry would. I could pay a certain sum and get as many meals as I wanted. What a concept.
Other industries don't follow this model because price on a per-unit basis is the only market mechanism that works. Some argue that if prices are charged on a per-visit/admission basis, consumers would not be able to afford healthcare. But removing insurance policies that overinsure consumers would take dollars employees and employers spend on premiums and contribute to increased consumer incomes.
Consumers have become accustomed to demanding excessive healthcare because of hidden prices: They see only their portion of insurance premiums, deductibles, and copayments, not the overall actual cost of an outpatient visit or inpatient admission. Under the managed-care philosophy, healthcare financing risks are assumed predominantly by the healthcare facility.
Patients should be held responsible for preventive health and health financing risks. Consumer demand for physician intervention would decline through healthier lifestyle choices and preventive home-based self-care. Reductions in demand would result in decreases in healthcare costs.
Getting back to basics is all about price and consumer choice.
Chief financial officer
5th Medical Group
Minot Air Force Base