Here's an excerpt from "Retail health care and reform":
What are "retail health clinics"? Chances are, you've already seen them. These clinics have begun rapidly spreading to malls, big-box retail stores such as Wal-Mart and Target as concessionaires, and drug stores like Walgreens. Instead of hiding behind insurance co-pays, the clinics offer pricing up front to consumers, so that they can decide for themselves what to "buy" and how much they want to pay for service.As one would expect, the price transparency creates incentives for patients to shop prudently. Studies show that patients do exactly what, saving money without compromising the quality of care.
This is the same mechanism that works to keep prices down and supply consistent in other areas of health care that insurance plans do not traditionally cover. For instance, cosmetic surgery and Lasik rely entirely on consumer compensation. There are no third-party payers to get in the way of rationally allocating resources to demand. In those markets, producers and consumers find each other in the normal manner, advertising, discounts, and price competition, and the market attracts new providers when scarcity appears and prices rise.
This has important implications for the broader health care debate, Morrissey notes:
Given the realities of pricing and competition, we should reform the health system not by building more all-encompassing insurance plans, but by returning health insurance to its rational place: as a bulwark against catastrophic loss. If consumers bought health-care services in a rational market, the price for the overwhelming majority of transactions would be well within the money we would recoup from ending comprehensive coverage policies.(Read the full text of "Retail health care and reform".)
People with pre-existing conditions, such as myself, could access catastrophic coverage a lot easier if insurers didn't have to pay for all of the maintenance services required. Prices would drop to a rational level where almost all families could afford coverage. Government regulation could protect consumers from suffering rejection and cancellation much as they do now.
[Emphasis mine. - PSH]
In the meantime, providers would get properly compensated, which would create growth in supply, especially in family practice, which faces a serious provider shortage.
If we want to reform care, bend the cost curve downward, and promote supply in the health-care industry, we need to learn the lesson from retail health clinics. The top-down reform proposed by Congress threatens to stop real reform and amplify everything that's currently wrong with the system.