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On Monday, the AP reported that, as part of its health reform efforts, the federal government would require states to establish online shopping services that would ostensibly make it easier for consumers to research and purchase health insurance. The AP reported: âThe new marketplaces are supposed to work like an Amazon.com for health insurance, providing consumers with one-stop shopping for competitively priced coverage.â As she has before, Secretary of Health and Human Services Kathleen Sebelius argued that âmore competition will drive down costs and exchanges will give individuals and small businesses the same purchasing power big businesses have today.â The AP didnât say how that would happen, nor did it mention that up to half of the governing board for these shopping services could be composed of industry reps, creating the potential for fox-in-the-hen-house regulation. At least one consumer rep must be on the board.
The AP story brought to mind a piece I have been waiting to comment onâa fine story by WBURâs Martha Bebinger that reporters ought to use as a model when looking for interesting ways to report on a not-so-interesting subject.
Bebinger reported on the shopping experience of Sarah Bechta, a wife, mother, and doctor living in Northborough, Massachusetts. Bechta spent six to eight hours comparing plans, trying to figure out whether one of those newfangled insurance plans with tiers of high, medium, and low-priced docs and hospitals was right for her. Massachusetts is leading the way in creating new insurance products that, in turn, create more headaches for consumers. Insurers are encouraging them to choose low-cost providers; in return, they will give them a price break either on the premium or on their out-of-pocket costs. In effect, they are following a sales strategy that assumes buying insurance is like making a choice at Baskin Robbins.
Dr. Bechtaâs experience shows the difficulty of âchoosing the best.â Bechta learned that a tiered plan would cut her premium in half, and she would save around $1400 a year, a sum that âmade me stop and think,â she said. But then she asked herself the relevant question: Would higher deductibles and copayments gobble up the savings? They might if she could predict what illnesses her family would have during the year. âI could not figure it out,â she said. Of course she couldnât. If you have a chronic illness, some medical expenses are predictable. But for other people, they are not. Bechta did some rough calculations of the costs she would incur if her daughter came down with appendicitis. If her daughter went to a tier 3, higher cost hospitalâsuch as Childrenâs, which her doctor might recommendâthe premium savings would be wiped out.
She calculated some more, constructing a table of her family doctors and the tiers in which they had been placed by the various insurance companies. There was no uniformity. All the familyâs primary care docs were in different tiers for different health plans. So while Blue Cross might have put one physician in tier 1, Harvard Pilgrim might have put the same doc in tier 2. âThereâs no way my pediatrician can be tier 1 for one insurer and tier 3 for another,â said Bechta. âIt just makes no sense.â
Bebinger explained that insurers use a complicated formula of quality and cost measures in order to determine a physicianâs tier. But those measures vary from insurer to insurer. Even though the state will soon require all insurers to use the same quality criteria, there will still be significant variation in how the measures are weighted and there will still be significant price differences. Like good reporters do, Bebinger placed her story in the larger context. Massachusetts is leading the charge for these arrangements, which the rest of the population will soon have to confront.
Said Bechta: âIt doesnât lead me to conclude that I can make an educated choice about a hospital and say Iâm going to save the system money by going here, because the next person who has a different insurance plan is not saving money by going there, and theyâre getting the exact same test or procedure that Iâm going to get.â Bingo! Betcha nailed the contradiction presented by all this shopping stuff. Reporters should explore this contradiction further. It would make for much better journalism than passing along more quotes from Kathleen Sebelius and others about how easy shopping will be thanks to the Obama administration.
After all the study and frustration, Bechta decided to stay with her traditional HMO. Most consumers will do the same, taking the easy way out of a task theyâll inevitably hate. No, shopping wonât be like buying a can opener from Amazon.
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