One of the central problems with the country’s health care system is that it often shields consumers from costs in ways that provide little incentive to hold them down. In many cases, the consumers do not even know the full costs of their treatment or insurance coverage.
In other words, they have relatively little “skin in the game.” This, combined with other problems in the health care system, leads to excessive levels of utilization and spending.
One of the central problems with the country’s health care system is that it often shields consumers from costs in ways that provide little incentive to hold them down. In many cases, the consumers do not even know the full costs of their treatment or insurance coverage.
In other words, they have relatively little “skin in the game.” This, combined with other problems in the health care system, leads to excessive levels of utilization and spending.
Joshua Gordon, policy director for The Concord Coalition, points out that several recent bipartisan health care reform plans address the skin-in-the-game issue through proposals that would make consumers more sensitive to health care costs and the need to economize where possible. Eliminating or scaling back the tax exclusion for employer-provided health insurance is the primary mechanism in this effort.
He discusses these proposals in the second of three blog posts on the developing consensus among fiscal and health care policy experts on ways to move the country towards a less expensive, more effective and more patient-centered system.
The first blog post in this series focused on the proposed supply-side reforms. The third blog post will include a look at how all these reforms could help put the country on a more sustainable fiscal path over the next decade and beyond.
