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Reduced Use of Health Care Could Cut Costs—That Is, Until Obamacare Makes Its Mark

Posted By Kathryn Nix On August 5, 2010 @ 1:00 pm In Obamacare | Comments Disabled

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The President signed Obamacare into law last March as an attempt to get spending and costs under control, but the new law will likely fail at this mission.

In fact, The Wall Street Journal reports [2]that, in recent months, Americans have already begun to cut back on health care usage, which has the potential to lower the cost of medical care and insurance premiums. In a truly ironic turn of events, Obamacare may actually keep spending on its upward trajectory.

The drop in health care usage could be a result of several factors at play. First, there’s the economic downturn and associated loss of coverage. But according to Carl McDonald [2], an analyst for Citigroup Investment Research, the drop in usage is more pronounced than those of comparable recessions in the past.

This means the growing use of high-deductible health care plans could also be playing a significant role. Consumer-driven health plans encourage consumers to seek out more affordable options, which they may not do with more comprehensive insurance options.

The Journal tells the story of Dan and Natalie Johnson, who recently switched to a high-deductible plan: “Now, the couple says they are thinking twice before scheduling doctor visits. Recently, when their 16-year-old daughter’s allergy prescription ran out, Ms. Johnson called the allergist’s office to ask for a renewal, without coming in for an appointment, as she would have done under their previous insurance.”

Stories like this one show that value is best achieved when consumers make decisions. Heritage has been making this point for years. Health policy expert Ed Haislmaier writes [3], “The fundamental objective of a patient-centered health care system is to maximize value for individuals and families so that they receive more benefit and better results for their health care dollars, both as patients and as consumers buying health insurance. Only when individuals choose and own their own health insurance will the other actors in the system—health plans and providers—have the right incentives to deliver better value in the form of improved results at lower prices.”

The Journal contends that this could mark a “lasting change in the way Americans use the medical system”; but it also makes the point that “the federal health overhaul could cause usage to surge again.” This will, of course, be true as the new law allows millions to gain coverage. But it will also further insulate consumers from decision-making by requiring health plans to offer more generous benefits with lower cost-sharing. In fact, depending on forthcoming regulatory language, high-deductible health plans may cease to exist altogether.

Putting consumers in charge of health care is the best way to control costs and achieve better value in the health care system. The first step to achieving this? Repeal Obamacare.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/08/05/reduced-use-of-health-care-could-cut-costs%e2%80%94that-is-until-obamacare-makes-its-mark/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/doctor_bill0906235.gif

[2] The Wall Street Journal reports : http://online.wsj.com/article/SB10001424052748703940904575395603432726626.html?mod=WSJ_hps_SECONDTopStories

[3] Health policy expert Ed Haislmaier writes: http://www.heritage.org/Research/Reports/2008/04/Health-Care-Reform-Design-Principles-for-a-Patient-Centered-Consumer-Based-Market

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