Friday, November 29, 2013

Something to like about the Exchanges

There is a lot to dislike about exchanges and their rollout, but here is something to like.  Providers complaining about pay. 

The exchange is first and foremost a marketplace, it’s a means of communicating preferences between buyers and sellers of health care.  Buyers who choose low cost, limited networks are sending a message that the services of high cost providers are not worth the price.  What happens next?

One way providers could respond is to lower prices.  Another way is to make their case to the public justifying high prices and explaining why they are worth it.  Both of those are good things, as they'd force providers to think about costs and benefits.

Another way to respond is to lobby the government for preferential treatment as described by the WSJ.  To the extent providers are arguing for more money because that's what they're used to getting, the door should be slammed in their face.  But if a provider wants to argue that their service is so critical and so unique that a service area is being deprived of critical care if they're excluded from a network, than they've got a point. 

There are two kinds of facilities that might claim that:  those with high cost/low utilization services such as a burn unit, which serve only a tiny fraction of the population but are critical for them, or rural providers where they may be the only show in town.  Those cases are unique and may indeed warrant special treatment.  But that treatment can't be a simple mandate in their favor, it has to include obligations acknowledging that such providers are in effect monopolies. 

That's another conversation that has to happen, a recognition that there are areas of health care where because of monopolies, competition makes no sense.  In those areas the only answer is public oversight, as intensive and invasive as is applied to other utility providers.  And we should accept the possibility that for some services, the community really doesn't need a local provider and prefers the burden of having to travel further to receive such care.

All of these conversations about costs and benefits, monopolies and oversight are way overdue, ignoring them has turned health care into a runaway train.  Whatever the rollout problems, if the ACA makes those conversations happen I'd mark it a success.

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