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What! The Free Market Won't Work for Health Care?

By James Edholm

Republish: EasyPublish™ Published: 06Mar2012 Word count: 537 Viewed: 29 time(s) Get Free Content For Your Site

Only 24 months ago, the increase in the standard health care insurance was just 16.3 percent this year, it's 1.0 percent in the second quarter.

Now this is the part where you scream "Jesus, Mary and Joseph! What in the world happened?!"

Ok, from the goodness of my heart, I'll let you in on what happened. Massachusetts, longtime incubator for innovative health care, got a taste of the free market; uh huh, that is what happened.

In response to the outrageous hike in healthcare costs, Blue Cross, introduced a tiered network design a few years ago. This is the first of its kind around here….ever!

This network helped maintain freedom of choice; every doctor and every hospital that wanted to take part was somewhere in the network.

However, there was a new concept that has been put in place: When the insured use top quality, affordable hospitals and doctors, they will pay close to nothing.

When the insured use a more expensive or poor quality health institutions, their health insurance costs will shoot the roof. The major difference in the original plan between going to a top quality community hospital and expensive hospital in town will mean a twentyfold increase in one's health insurance costs!

Seriously, give this some thought, either go to your local community health center and pay $150 or simply go down town and end up shelling out $3,000. A large number of employers responded, and over 1.2 million Bay State residents are now covered by the first Blue Cross health insurance plan or the numerous version offered by not just Blue Cross, but also its competitors.

The major result is the significant lowering of the standard increase in health insurance cost this year as against 24 months ago. Quite frankly, that is not the only thing that is taking place.

Because employers and workers are responding positively to a measure of price and quality transparency, new healthcare institutions are now hurrying to get a piece of the action (market share).

One hospital/healthcare system is introducing a limited-tier network designed to be 15 to 30 percent cheaper than other options - however with a really small network than anyone offered by major carrier.

The doctor charges which was negotiated in the recent go-around were 2 to 3 percent - this is half what they used to be in 2010.

Partners Health Care's last negotiated charges with Blue Cross & Tufts will lead to their getting compensation in the next couple of years that are $350 Million lesser than in the most recent time.

The magic word you are looking for here, is "Less!"

Physicians and health centers/hospitals are now looking at contracts that are simply based on outcomes, and not procedures. Now, health centers and patients look forward to the same outcome.

The moral of this story is that, we do not have to wait for the government to take necessary steps when it comes to health insurance costs.

The best thing the government can do is to set targets for cost reduction goals and simply make way for the private sector health care provides as they combine efforts to make it work.

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