Prescription for Change
by Gary Ahlquist, David Knott, and Philip Lathrop, Strategy+Business,
Fall 2005
Health plans that put consumers in the driver's seat are the last
chance to avoid a government-controlled monopoly.
...It has long been recognized that these trends are unsustainable.
Each of the major players associated with health care has taken its
turn trying to rationalize demand and costs in the United States.
Health-care providers (both institutions, such as hospitals, and
individual professionals), employers, insurers, and government programs
all took their swings with little lasting impact. Now comes the last
group: consumers. During the next year or two, consumers will get a
chance to reshape the system through a form of insurance called
consumer-directed health plans (CDHPs), which have been written about
at length but not implemented until recently. If this solution fails,
it is hard to see any alternative but a government-sponsored
"universal" initiative -- perhaps not nationalizing assets, but almost
certainly involving price controls, supply constraints, and utilization
mandates.
But before we abandon private-sector initiatives entirely, it's worth
doing what we can to give CDHPs a fighting chance. They have the
potential not only to transform health-care markets, but also to become
part of new thinking about larger issues such as retirement savings,
wealth-building in general, and even large government programs such as
Social Security and Medicare. For the first time, in short, consumers
could be given the lead role in shaping the health system of the future
-- which in turn would give providers and insurers of health care their
first real incentive to transform. The next few years will be crucial
in determining whether CDHPs can spark a new paradigm for health care,
or whether we[base ']re simply taking another step toward what is, to many, an
inevitable nationalized approach....
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strategy+business]
