Bad as the Affordable Care Act might be for American health care, Bill Frezza of the Competitive Enterprise Institute explains for Daily Caller readers how the health law’s flaws might lead to helpful innovations.
Larger and larger annual deductibles combined with narrower and narrower provider networks are becoming a common feature of Obamacare plans because that’s the only way to make the math work. These high deductibles are carefully set so that the vast majority of people forced to buy into Obamacare never satisfy those deductibles in any given year, regardless of whether they got subsidies to pay their premiums. Which takes us back full circle toward making more and more doctoring a cash business again. Who would have predicted that?
The problem is that the vast majority of both Obamacare and private employer health care contracts contain clauses that lock providers into a pricing schedule that forbids offering discounts to out-of-network individuals purchasing one-off procedures, forcing them to charge inflated list prices that bear little connection to those procedures’ actual cost.
Thankfully, entrepreneurs spotted an opportunity to create an Internet-based middleman matching cash-paying individuals with willing health care providers, negotiating bulk discounts designed to put customers on a level playing field with large health plan providers. Most importantly, customers could comparison shop for common procedures like MRIs and colonoscopies across the most cost effective providers nationwide. Think about it, who cares about the price of a plane ticket if you can save $5,000 on a procedure? By pre-paying online with a credit card customers would be guaranteed fixed up-front pricing, while happy providers could be paid promptly rather than wait months for reimbursement. To be even more consumer friendly, these entrepreneurs made arrangements with loan providers to offer installment payment plans for that must-have procedure.
Hence, MDSave was born. As the country returns to cash doctoring for more and more of its medical care, we’re likely to see more innovations of this sort. Who knows, one day dynamic market forces might even return to the health care industry, creating feedback loops to make medical services cheaper and cheaper every year, just the way prices usually decline in most unregulated technology-based markets.
