American politicians and policymakers often tout consumer-based approaches, such as price transparency, comparison shopping, retail clinics and high-deductible health plans with health savings accounts as answers to the nation's pressing healthcare cost and access problems.
But recent evidence suggests that these types of market-based solutions have severe limits.
Earlier this month, the Health Care Cost Institute reported that less than 7% of total U.S. healthcare spending in 2011 was paid by consumers for “shoppable” services, meaning those that can be scheduled in a market with some competition. “Overall, we come to the conclusion that the potential gains from the consumer price shopping aspect of price transparency efforts are modest,” the authors wrote.
In addition, a study published in Health Affairs found that retail clinics have led to slightly higher per-capita spending because consumers use them for minor conditions that they typically would have treated on their own. Advocates of retail clinics have argued that the option offers lower costs and greater convenience. “This challenges the conventional wisdom that retail clinics save the healthcare system money,” Dr. Ateev Mehrotra, a co-author of the study, told Kaiser Health News.
Meanwhile, Republican presidential candidate Donald Trump and other GOP politicians emphasize tax-free health savings accounts as a major part of their plans to replace the Affordable Care Act. They argue that the expanded use of HSAs would drive a more cost-efficient system by prodding consumers to shop, compare and negotiate with healthcare providers.
But David Newman, executive director of the Health Care Cost Institute, said employers, insurers and providers are in a far stronger position to evaluate the price and quality of healthcare services and to control total spending than consumers are. Plus, most consumers simply aren't interested in price shopping for healthcare, unlike their eagerness to shop for cars and other products.
“Last month I was diagnosed with skin cancer,” Newman said. “I haven't gotten on Google to check prices. I don't care about cost. I just want to have the surgery and be done with it.”
Nevertheless, many employers have jumped on the consumerism bandwagon. Twenty percent of firms with health benefits offered employees high-deductible plans paired with tax-sheltered HSAs last year, and 15% of covered workers were enrolled in such plans, according to a Kaiser Family Foundation/Health Research & Educational Trust survey of employer health benefits.