Perverse Incentives

I can't be too specific, but I'm involved in a project to develop pay for performance measures for hospitals with respect to reducing racial and ethnic disparities in health care. There is a whole lot of blogging fodder in this, but I'm going to start with a very basic issue concerning the way our health care non-system is organized.

For this, I'm going to go back to another committee I got volunteered for, which had to do with health care disparities among people with private insurance. I pointed out to the representative of a big health insurance company that they charge a $250 co-payment for a colonoscopy. That's obviously enough to discourage lots of people from getting one, even though colonoscopy can actually prevent -- not just diagnose, but prevent -- colon cancer. (As I assume most people know, during a colonoscopy, the doctor can identify and remove pre-cancerous polyps before they ever have a chance to cause trouble.*) Obviously, colon cancer costs a whole lot more than a colonoscopy, so why doesn't the health plan make them very low cost or even free? Wouldn't they save money in the long run?

Nope. The problem is, the people who are their members this year probably won't be their members 5 or 10 years from now. They will have changed jobs, their employer will have changed insurers, they will have lost insurance altogether, or by then they'll be retired and on Medicare. So the health plan has to pay for their colonoscoy now, but won't have to pay for their colon cancer 10 years from now. Hence, they would rather charge you the $250 bucks in hopes you won't get a colonoscopy which a) costs them more than $1,000 in the first place and b) might find a cancer or other condition that they would have to pay to treat now.

There are a zillion more examples. A while back I interviewed people with HIV about their medication adherence. One problem people have is that their insurance will only pay for a 30 day supply of meds at one time, so they have to keep getting refills, which some people don't have it together well enough to always do on time, or they face obstacles such as transient housing situations so they aren't always near the same pharmacy, etc. I asked the medical director of a leading Medicaid plan why they couldn't give people a 90 or 120 day supply at a time and he said their accountants wouldn't allow it, because the people might not be on Medicaid in a month or two, so they would end up buying meds for people for whom they weren't collecting premiums. Of course, that might end up killing the people, but the finance department, which has the final say of course, doesn't care about that.

Solution? Too easy for a hint . . .

We need universal, comprehensive, single payer national health care. That turns the incentives around. Now the insurer really does have every incentive in the world to keep you healthy. Right now, they don't.

*Did you hear about the dentist who switched to proctology? He was tired of people burping in his face.