As a health policy analyst, I often get asked, “When and how are we going to fix the health care system?” The answer to that question is complicated for two reasons: There is so much wrong to start with, and no one can agree on the result.

I believe the reason there’s such little consensus on what the future of health care should look like is that people’s ideas of health “coverage” vary so widely. Some believe every medical procedure should be fully insured and paid for by an insurance company or the government. Some believe there is far too much emphasis on the idea of “health insurance” while we ignore a more logical way to pay for health care. I fall into the latter camp.

I believe that reform in our health care system needs to take place on two fronts. The first focuses on making insurance more affordable and easier to use. The second emphasizes patients paying directly for much of their health care, without an insurer. I believe with proper reform in these two areas, a health system will exist that provides meaningful alternatives to Americans.

The first front describes making the status quo — individuals obtaining health insurance from work, the government, or themselves — work much better. Everyone knows the current problems with the health insurance system: It’s too expensive compared to the received benefits, health insurance is difficult to understand and use, and your health insurance may leave you with substantial out-of-pocket costs. But many people like the idea of having all medical risk covered. How can we make this type of health care purchasing work better? One place to start is deregulation at the federal and state levels.

With the goal to extend “comprehensive, affordable insurance” to all Americans, our country has, in essence, rendered the health insurance market unworkable and unattainable for many. This conundrum will leave your head spinning: It’s hard to access the health care system without insurance, but insurance is so expensive, many can’t afford it. This is a direct result of regulating the parity and robustness of health insurance plans through such things as Obamacare and state-level insurance mandates. Insurance regulations add layers of costs and interfere with free negotiations between insurers and providers. This is a significant reason insurance is so expensive and so difficult to understand and use for many Americans. Letting market forces dictate the proper consumer protections would make the insurance market much more affordable and accessible for all Americans.

The second front describes emphasizing a direct-pay model of buying health care, which excludes health insurance. Market processes are already guiding this innovation. For example, direct primary care practices are sprouting up all over the country. In exchange for a monthly fee, a patient has around-the-clock access to a primary care doctor, one of the most critical phases of care. In the absence of dealing with health insurance, the doctors have more time to do what they are trained to do: care for patients. What about treatment outside of primary care? One hospital has already made the direct-pay model work. The Surgery Center of Oklahoma works like a direct primary care office in that it doesn’t accept insurance, and instead patients pay a flat up-front cost before surgery — a much lower rate compared to using insurance. Customers know the price of the procedure, and surprise bills don’t exist.

Paying for health care without insurance may seem like a foreign concept in present times. But there was a time direct-pay models were the norm in health care and insurance was used for unpredictable, catastrophic events. The lesson here is that despite the contemporary reliance on insurance, an affordable direct-pay model was once very common. It’s now making a comeback, and it’s scalable to the entire industry.

We lean on health insurance so much that we miss the bigger picture — health insurance may be why health care costs so much. The more we rely on health insurance to pay for health care, the less sensitive we are to prices that drive up demand, and the more it ends up costing all of us. Patients have ceded all consumer power to the insurance companies. No one, including those involved in the process of purchasing health care, knows the true price. Consumers pay a monthly premium to access health care via insurance and are therefore shielded from any idea of costs. This creates a strange world where the consumers aren’t the ones directly purchasing the product, and the firms in the market aren’t directly responsive to consumer demands — the perfect recipe for a nonfunctional market. Health care in this country will become more functional when patients start buying their health care themselves.


This essay was published in the February 2020 print edition of Carolina Journal.