The Health Shopper

The Wall Street Journal, a bastion of free markets, carried a rather interesting story on Monday by Sarah Rubenstein, describing a small employer's struggle to provide his 34 employees at Russ Moore Transmission in Fort Wayne, Ind., with the information they needed to manage their new high-deductible insurance plan. A free link to the article can be found here.

Ms. Rubenstein is a frequent and insightful writer on healthcare issues and one I read keenly. Manager Nick Bond said the previous health plan encouraged employees to overuse medical care "because they didn't have to pay for much of it themselves." However, the switch from the low-deductible plan was not easy, as both employer and employees struggled to find the information they needed to be better healthcare consumers. Mr. Bond cares deeply for his employees, and both he and his office manager "had to hole themselves up in their offices for about two weeks developing a spreadsheet with price information on 32 drugs." A potential conclusion you could draw from this article is that high deductible plans are too cumbersome and not for everyone.

I would argue that this is precisely the wrong conclusion. The Journal has done us a service by pointing out that shopping for value is work. But if the conclusion we take from this is that we as consumers shouldn’t shop for value, then we are doomed to pay higher prices for poorer quality. There are two other sources of support that Mr. Bond and his office manager could have looked to. First, the company’s health insurance broker would typically provide a level of support into such matters that would lessen the work-load on Mr. Bond. In Ms. Rubenstein’s story, the broker appears to have gone AWOL. Second, there are numerous websites on the web, among them Vimo.com, that allow you to compare prices.  These sites continue to improve with each passing day. Indeed, this is something that we at Vimo are looking to as well – our goal is to ensure that Mr. Bond spends 30 minutes at his browser instead of two weeks with a spreadsheet.

Thoughts and comments welcome as always.

Chini 

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In November of 1989, the Berlin Wall fell and communism as an economic philosophy began to crumble. We are fortunate today that there is no dominant challenge to the notion that free markets are the best mechanism for the allocation of economic resources. For markets to function well, consumers need free and easy access to information about price and quality, while providers need the ability to innovate quickly. The system of healthcare delivery in America today is profoundly lacking in both of these respects. Whether you want to purchase a health insurance plan, save for your health expenses, see a doctor, or check out your surgery options in the event of illness, it is tough to compare products side-by-side, understand how your decisions about purchase impacts one another, read real stories of what other customers think of a particular product, and find a matrix of services suited for your needs. And yet, there is hope. A new culture of patient advocacy is emerging in our country. Many of us now use sites like www.webmd.com to learn more about our conditions. Many of us now read books like “YOU: The Smart Patient" by Michael F. Roizen and Mehmet C. Oz. Welcome to our blog, where we will talk about how to create a free market for healthcare services – at www.vimo.com and other places online and offline. Along the way, of course, we’ll share various unrelated anecdotes and have some fun.