Health Care Reform: Empower Consumers

Given the colossal health care reform legislation that is zigzagging its way through Congress, it would be difficult to imagine there could be anything missing. After all, the bills in the House and Sen ate have more pages than all seven Harry Potter books combined -- more than 4,000 pages between the two of them.

Yet, one of the most critical elements needed to overhaul our current system is conspicuously absent: the patient as consumer.

Rather than a proposed solution that relies on complicated new mandates, regulations, and government oversight, we need a far simpler, market-based and common-sense approach, one that businesses large and small are already discovering in growing numbers.

By empowering patients as value-driven consumers of health care, we have the potential to transform our nation's health care system in ways that are far more economical and less onerous than either of the bills created on Capitol Hill.

By moving away from the decades-old co-pay, managed-care system of HMOs and PPOs -- a critical shift that neither congressional bill addresses -- we can remake health care in this country, making it more affordable, accessible, and manageable for virtually everyone.

Through consumer-driven health plans (CDHPs), especially when paired with a Health Savings Account (HSA), businesses and individuals are finding that when they have more control of the health care dollar, they can bend the cost curve down.

The current co-pay approach has virtually destroyed the ability for us as consumers to make any rational value judgment on any of our health care decisions. By insulating us from any need to be engaged in the cost, quality, or value of the health care services we consume, we have unwittingly become the drivers of the runaway cost of health care. And so, while consumers may appreciate the comfort of paying a $25 co-pay for an annual checkup, the ever-growing price tag on their monthly insurance premiums makes this approach unsustainable.

Contrast this system with how health insurance used to be when we were more directly engaged in the purchase of health care services. For those of us old enough to remember, health insurance was originally intended as a safety net, a hedge against major medical expenses. (In fact, that's what we called it -- major medical.)

Routine and minor care was delivered by our doctors, and we paid them via an efficient direct transaction, allowing us to fully understand what was done and how much we paid for it.

Our co-pay system has evolved such that every medical service is now an "insurable" event, requiring our very complex, bureaucratic, and expensive insurance model to complete these simple, straightforward transactions -- thus greasing the skids for our spiraling health care costs.

Today's CDHP model takes a prudent step back to those days. It starts by lowering health insurance premiums -- by as much as 30 percent to 50 percent -- by refocusing on statistically infrequent, financially ruinous health care events. Those savings, especially when paired with an HSA, engage those insured to make informed, value-based health care decisions for both routine and more complex care.

The plans trade low co-pays for high deductibles, with coverage at 100 percent after the deductible is met. But here's the critical element to CDHPs: What is not used each month by the individual or family is saved in the patient's Health Savings Account, an account that they own and that grows over time, with interest.

In essence, the paradigm shift is this: What consumers formally paid to insurance companies in the form of high premiums, they now pay to themselves through their Health Savings Account.

This is where we the people can reform our health care system. By pushing for additional transparency in the price and cost of health care and converting CDHPs' lower health care premiums into a direct investment in a more engaged consumer-patient, we have the ability to reform the system ourselves.

This consumer-driven reform, in fact, is already under way. Just last month, GE announced that it was turning to its employees to control company health care costs by moving all 75,000 active and retired employees to a consumer-driven approach. The company now joins GM, Whole Foods, Humana, Blue Cross Blue Shield of Florida, and our own company in turning to the power of the American consumer to take charge of controlling our runaway health care system.

Before we enact a close to a trillion-dollar piece of legislation that provides a complex bureaucratic solution to health care, shouldn't we look first at a consumer-driven answer that is already on its way toward fixing the parts of the system that are clearly broken?

Paul Kitchen formerly served as the executive vice president and chief operating officer of the Medical Society of Virginia and is currently the president of Richmond-based nHealth. He can be reached at pkitchen@nHealth.com.