Americans’ desire for control and choices in the Health Care System

June 19, 2012

Healthcare(Editor’s Note: This is part two of a four-part installment on “How the New Health Care Plan Has Been Misunderstood, Misrepresented, and Mismanaged”.)

In order to understand what has been happening in the debate over health care during the past two years, it is helpful to examine how the U.S. Health Care System is structured.

The fundamental structure of the U.S. Health Care System is based on four types of actors: individuals with health care needs; payers for care; providers of care; and regulators of care.  The variety and individual choices inherent in this System are the result of personal preferences reflected in public policy.

Individuals value options and control when considering potential changes to the landscape of the U.S. Health Care System.

The division of the formal System into payers for care and providers of care allows for further pluralism and choice.  There are a wide range of payer alternatives, ranging from private insurance to Medicare, Medicaid, and a number of other funding programs.

In turn, many types of providers are typically available, including primary and specialty care physicians, numerous other types of practitioners, inpatient and outpatient hospital care, and many different types of clinics, depending on the location.

It may be (and has been) argued that a single-payer System would be more efficient.

Such a conclusion must be based on a belief that services would be rationalized and optimized, and thus valued by the public.

However, the public generally is distrustful of bureaucracies to perform in this way, and has demonstrated a preference for a competitive health care market to encourage the improvement of services, even if such a less-rationalized System may have greater total expenditures.

This attitude is not unexpected, since the Health Care System is an integral part of the largely market-oriented, U.S. social and economic system.

Further, when the relative differences between the existing U.S. Health Care System and single-payer systems are compared, it is important to consider the value patients place on choice in the current system.

If the ability of individuals to select from among payers and providers is highly valued, then the present System may be the one with the highest benefit-to-cost ratio.  When we disregard the value of personal choice, we misinterpret the strengths of the current system.

Efforts to reduce the pluralism and choice inherent in the System, through restrictions and mandates, may be seen negatively.  Efforts that result in expanding pluralism and choice through new options, even if coupled with incentives, are likely to be well received.

Without the inclusion of the value placed on pluralism and choice by the public in any efficiency studies, the design of new health programs may be based on flawed benefit-cost studies that draw the wrong conclusions.

Basically, the public has demonstrated that, to the maximum degree possible, the preference is for a “shopping model” for the Health Care System, with choice and decision making to be made by individuals, with the payers and providers to compete to provide the best services.

In our next installment, we will consider how the new plan may increase the amount of consumer choice in the health care system, and why it is important that this benefit be effectively communicated.

A detailed analysis of the new Health Plan may be found in a recent book (Legal Practice Implications of the New U.S. National Health Care Plan, 2011-2012 Edition, by Mitchell and Mitchell, published by Thomson Reuters/WESTLAW).  Supplementary discussions by the authors regarding implementation of the Plan are also available through subsequent blogs (at staging.blog.legalsolutions.thomsonreuters.com) and a Thomson Reuters podcast (at www.legalcurrent.com).