Republican presidential candidates have debated for nearly eleven hours during five televised debates. They’ve discussed everything from foreign policy to economics. They’ve spent time on the legality of fantasy football, collecting Internet tax and the efficacy of vaccines.
And yet – unlike 2012 –there’s been almost no meaningful discussion about healthcare. While Republicans are no doubt aiming to dial back the Affordable Care Act, the government is also clearly invested in healthcare. Health spending makes up a quarter of the federal budget. The U.S. spends more on healthcare than any other country in the world. High deductible health plans have people spending more out-of-pocket for medical care, even though few can afford to.
Carly Fiorina touched on an idea in the November debate, saying, “every healthcare provider ought to publish its costs, its prices, its outcomes, because as patients we don’t know what we’re buying.” And she implied that government oversight could help on this front.
I wholeheartedly agree. Government regulation – done prudently – creates a framework where free markets can thrive. The Radio Act of 1927 assigned frequencies and power levels to radio stations so that one broadcast didn’t drown out another. The ruling provided distinct space for major networks like CBS and NBC, as well as regional channels like WNYC to co-exist on the airwaves.
Similarly, regulation, especially that which increases transparency into provider price and quality, can create a framework that allows free market economics to increase competition and put downward pressure on the cost of healthcare.
To be clear, government doesn’t need to mandate prices in order to control overspending. The free market is deft at doing that.
Consider how competitive pricing is being used as a marketing strategy for the booming retail clinic industry. In October, WalMart performed free blood pressure and glucose screenings at what it dubbed “America’s Biggest Health Fair” across 4,400 of its locations. Free is a powerful incentive. In fact, according to a subsequent press release from the corporation, WalMart performed over 300,000 diagnostic screenings during the one-day event.
Blood glucose screenings are often billed at $50 a pop by other providers. That means WalMart gave away over $15 million in free health screenings. Company executives estimated that the screenings revealed 3,000 cases of Type I Diabetes and another 7,000 instances of high blood pressure.
As a for-profit entity, WalMart no doubt made a business gamble they’d generate sales off merchandise people purchased after getting their finger pricked. Yet, the lesson is clear: Compelling prices for healthcare spurs competition, saves money and makes people healthier.
We’ve seen this dynamic work, as well. Vitals partners with insurers, marrying cost information to quality metrics data to provide buying transparency for routine procedures like mammograms, colonoscopies, MRI and bone density scans. Our SmartShopper program then offers cash rewards to patients who choose similar quality, lower-cost care. Last year, we saved more than $11 million in overspending charges for health plans and employers.
Those savings prove that when given the right information and proper incentives, consumers have the preventative screenings and procedures before they become expensive health problems down the road. They shop for health care the way they shop for anything else – balancing cost, quality and access. What’s more, providers in SmartShopper markets actually lowered their prices to become more competitive and stay in business.
As Rep. Paul RyanPaul RyanTrump, Clinton intelligence briefings likely to start next week Clinton maps out first 100 days Why a bill about catfish will show whether Ryan's serious about regulatory reform MORE (R-Wis.) took the office as House Speaker, he warned Republicans that they needed to move from “being an opposition party to a proposition party.” No doubt, as the crowded Republican field narrows, the remaining politicians will calcify their policy plans around healthcare.
By adopting free market reforms, there is much to be saved by controlling costs- and much to be gained by making healthcare affordable for regular Americans. Who will be the candidate that seizes this opportunity?
Rothschild is founder of Vitals, a company that combines information transparency and cash incentive services towards empowering everyone to shop like an expert for their health care.