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How Effective is Consumerism in Healthcare?

It’s all about choices, or at least that’s what they say. The healthcare reforms are supposed to bring about a sea of positive change; they’re being touted as the harbinger of good news for everyone who’s reached the end of their tether with the healthcare industry and all those associated with it; and they’re being promoted as the thing that’s going to improve consumerism in healthcare. In simple English, this means you get to have a bigger say and more choice when it comes to your healthcare plan. But does consumerism really make as big a difference as people claim it does?

Take for instance the consumer directed health plan (CDHP) offered by organizations for their employees – these plans involve high deductibles and low premiums. They’re attractive because you’re allowed to set aside money through a health savings account (HSA) which is exempt from tax. So if you fail to meet the deductible, you could use the money in your HSA to compensate for the difference. The amount unused in this account is rolled over from year to year and wholly belongs to you.

Now the problem with CDHPs is that they work if you’re healthy and foresee no health complications in the near future. With the right preventive care, a proper diet, and some regular exercise, it’s easy to look after your health and avoid complications of any kind. However, if you’re already beset by chronic health problems or if you foresee an illness in the future because of genetic predisposition, then these plans are not really advantageous. If you do suddenly need medical help, your insurance coverage does not kick in if you haven’t paid the deductible for that year, so you could be left high and dry even though you’re supposedly covered by the CDHP.

The trouble with choosing your own healthcare plan is that there is not really much of a choice – if you’re healthy, then you pretty much have the run of any plan you want as long as you can afford the premiums. And if you’re not, you’re screwed no matter which plan you choose – you may end up paying high premiums and significant out-of-pocket costs if you’re really unlucky.

True consumerism in the healthcare industry will only come about when consumers are able to choose any plan they need, irrespective of pre-existing conditions and other factors such as age. However, it’s safe to say that this will happen only if the state of Utopia happens as well.