Visiting fellow talks cost-effective health care decisions
Health care is a hot topic that plagues the United States. With the political disputes that have emerged from the Affordable Care Act, new health care services are continually being revisited.
James Robinson, a visiting fellow in the Division of Outcomes and Effectiveness Research at Weill Cornell Medical College, shared the implications of reference pricing to hospitals at a seminar yesterday at the Institute For Health, Health Care Policy And Aging Research on the College Avenue campus.
Reference pricing is the act of offering a set amount of money for a medical product or service. The reference is an amount that offers meaningful coverage for that specific product or service.
Robinson, a Leonard D. Schaeffer professor of Health Economics in the Division of Health Policy and Management and Chair of the Berkeley Center for Health Technology, said his studies focus on health insurance, physician payment methods and health care finance.
The research he has collected is used by health plans and hospital systems in California. His goal is to make decisions related to health care more cost-effective.
To start off the discussion about health care, Robinson posed the question: “For the benefit of the people, should we have more cost sharing or less cost sharing?”
Cost sharing is the share of costs covered by an insurance company that one must pay out of pocket. Generally, this includes deductibles, co-insurance and co-payment.
Out of the few answers given by graduate students around the conference room, the answer was ambiguous. The overall consensus was a need to have “smarter cost sharing” between patients and insurers.
Amy LeClair, a postdoctoral fellow who attended the seminar, said part of her training is to attend these seminars in the afternoon.
“There are two issues of cost sharing,” Robinson said. “The level of cost sharing and the structure of it.”
Health care reform is a prevalent issue in the U.S. Compared to other wealthy countries, like France, the U.S. is vastly different because of its significantly greater amount of cost sharing.
“Cost sharing should be reduced because health insurance is a good thing,” Robinson said.
To try to relate the magnification of the United States’ health care issues, Robinson compared medical expenses to the expenses of raising a child: How much monetary responsibility should be placed on the society and how much should be placed on the guardians?
In the United States, the government has a small financial role in the raising of a child. There is a small tax reduction, but education must be fully paid for by the parents. In France, the role of the government is bigger in the financial raising of a child. Education is completely free.
This urges more women to bear children and promotes more French people in France. This doctrine was implemented after World War II to raise the French population after many young men were killed in the war.
If health care costs went down, more people will make better use of America’s health care systems.
Appealing to a more conservative point of view, Robinson states that there is room for moral hazards. To illustrate the moral hazards, Robinson compared the healthcare system to restaurants.
Moral hazard is using more services that one does not have to pay for than one does have to pay for.
“Imagine that in the United States, food was considered a basic human right, and the government promised to pay 80 percent of each bill,” Robinson said. “The issue becomes how often you would go out, and which restaurants you would go to.”
Surely, most individuals would go out more often and to more expensive restaurants. In relationship to health care in this conservative mind frame, the government would lose money.
But the issues seem to spread farther than the government losing money.
“After the Obama administration, it is predicted that Republicans will tear down Obamacare, and try and reform health care once again,” Robinson said. “My goal is to give Americans a choice on their health care.”
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