The free market offers the most simple solution to the issues that challenge our entire healthcare system.
We live and practice in a world of make-believe insurance coverage, inflated list prices, and government mandates. If we stripped away all the payer rules for obtaining care, precertifications, and prior authorizations, as well as network provider manuals, Medicare laws, etc., then we would be left with free-market competition. Such a system would allow physicians, hospitals, and other healthcare entities to compete for patient business based on price and quality. Competition would keep prices down and quality up.
Car insurance is designed to cover costs associated with catastrophes, not routine maintenance. And auto insurers reimburse policy holders directly for their catastrophic costs.
Health insurance could operate similarly, and it also could allow for competition across state lines, with physicians and others soliciting business from patients directly, not through employers or closed networks. Under such a system, patients could opt for the coverage they want and pay providers directly. Costs associated with insurance company administration and government enforcement of compliance would be saved. The savings would be significant: Practices waste an average of $68,000 per year on health plan administration costs, according to a 2009 study by Casalino et al.
Quality, location, and patient preferences—not insurance rules and government limitations—should guide patient and physician choice. And, yes, costs cannot be overlooked as an important factor in healthcare decisions.
Under a free-market system, care would be provided to those who seek it—in private, secure, and individual settings—based on patients' personal priorities and values. All costs would be known in advance, giving doctors and patients additional perspective on the available options. A patient would be free to choose to have a lipid panel processed by a hospital lab that charges more than $400 or a private lab that charges $15.
Free-market competition would revolutionize healthcare delivery. The first step would involve all physicians and healthcare systems opting out of insurance and government programs and posting real cash prices for the services they offer.