Let's make patients the customer, not the product, in health care

Let's make patients the customer, not the product, in health care
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With ObamaCare surviving its third major legal challenge at the Supreme Court, Republicans are being offered a chance to redefine themselves on the issue of health care. They should seize this opportunity by expanding their focus beyond repealing and replacing ObamaCare and instead address the more fundamental problems with the American health care system. And there is no more fundamental problem than the simple fact that in this system, patients are not the customer, they are the product. 

This may seem like a strange assertion. Surely, health care coverage, services, devices and medicines are the products, and the customers are the patients. But this is not true. 

Employer plans account for 90 percent of the private health insurance market. That means the most important customer of health plans is not individual patients, but human resource managers, because they decide where employee health benefit dollars are spent. The second most important customer is federal and state governments, thanks to Medicare Advantage and Medicaid managed care plans. 

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Patients are not the primary customer of most health care providers, either. That would be the third-party payers. Ultimately, the party that pays the bill is the customer, even if they are doing so using money from patient premiums. Because health plans control the money, they’re the ones that have final say so over a patient’s access to care. 

So if the patient isn’t the seller or the customer in the American health care system, what are they? That’s right, they’re the product being bought and sold. 

Health plans negotiate with human resource managers to acquire patients. Then providers and drug manufacturers negotiate with the health plans to acquire the patients the plans acquired from human resource managers. 

To the extent that patients act like customers in the American health care system, that role is limited to the boundaries defined by the human resource managers and health plans. Those boundaries are established to fit their interests, not those of the patient. 

For example, if employees have any choice at all in health plans, it is between a higher deductible or higher premiums with the same insurer. They can’t choose a plan based on what providers are in the network, services covered or other factors that would make it truly appropriate for them and their family. Employees don’t have more plan choices because this wouldn’t fit the interests of the employer. They have an asset they are selling — a patient pool. The more that patient pool fractures, the less valuable it becomes in terms of bargaining power. 

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Then, when it comes time to utilize the health coverage, patients must navigate the provider networks, prior authorization and other hurdles that limit their choices. This is to fit the interests of the health plan. After acquiring their assets (patient populations), health plans try to coerce them to act in a way that ensures a reasonable profit. 

Once you understand that the patient is the product in our health care system instead of the customer, it is clear why patients are so frustrated. They have little to no control because the choices they are given by employers and health plans are self-serving. Patients feel taken advantage of because they are a product or asset to be exploited, rather than a customer to be served. 

Giving patients control of their care and coverage should be the primary focus of Republican health care reform. And the way to do this is by making patients the customer by allowing them to take charge of their health care dollars. 

First, give employees the right to choose to receive the money their employer would otherwise spend on a health insurance premium as a cash payment to their Health Savings Account (HSA). This would require eliminating the annual cap on HSA deposits and the requirement that they be tied to a high-deductible health plan. 

Second, allow Americans to use HSA funds to purchase a health plan on the individual marketplace. 

Third, allow more variety of health plans in the individual marketplace so families can find insurance that fits their health and budgetary needs. This should include plans designed to “wrap around” direct primary care relationships and specialty plans run by centers of excellence for people with chronic illnesses. 

Fourth, strengthen price transparency rules so patients know the price of care ahead of time and can benefit from smart choices. One way this can be achieved in concert with the steps above is to allow HSA funds to be used to purchase indemnity-style health insurance plans. Indemnity-style health insurance works more like auto or property insurance. Patients are insured against medical events and then given a defined cash benefit that can be applied anywhere they choose to get care. There are no provider networks or prior authorization limiting patient choices. 

Modern information technology can be used to make this process seamless for the patient and provider. Innovative companies use an online shopping tool combined with a debit card to enable quick payment to providers with no surprise bills to patients. If patients are smart shoppers, they can lower their monthly premiums by choosing providers that charge less than the defined benefit. 

By giving patients control of their health care dollars, these four steps would dramatically change the role of the patient in our health care system. Instead of a product being bought and sold between massive health care bureaucracies, patients would be a customer with control over the type of coverage they have and the care they receive. 

This is a Republican health care agenda that Americans could get behind because it is not just an alternative to ObamaCare, it is an alternative to what is broken about the American health care system at large. 

Joe DeSantis is chief strategy officer at Gingrich 360 and leads the organization’s work in health care reform. Follow him on Twitter @joedesantis.