Cutting down on unneeded diagnostics

Cutting down on unneeded diagnostics

Thoughts from Mickey on consumer directed care and the impact on diagnostic tests:

Doctors doing diagnostic workups have many incentives to order too many tests. These incentives range from concern about legal risks to being too busy to think about the case or even do a good history and examination. Since medical prices are often unknown to both doctors and patients and are typically paid by insurance, there are few restraints to keep the doctor from ordering too many tests. The proposal detailed in this Wall Street Journal article may add one incentive to keep down costs:

Mr. Hubbard, a buddy of President Bush’s from Harvard Business School days, is the White House’s lead pitchman on the president’s health-care proposals. They include providing bigger tax breaks for health-savings accounts, or HSAs, and making hospitals’ and doctors’ prices available to consumers. The goal: to spur people to think about what they are spending for care, much as they do when shopping for a car or gallon of milk.

Democrats say the emphasis on HSAs does little to help the uninsured and favors the healthiest and wealthiest Americans.

The healthy and wealthy may be the first to benefit by virtue of having the confidence to press the doctor to cut costs, but the effect of their pressure will spread. Doctor will have an incentive to learn software that helps cut costs of diagnostic workups by bringing to bear the wisdom of the medical community about likely diagnoses and cost effective ways to distinguish among diagnostic possibilities. As doctors get used to such approaches they will end of saving money for everyone.

April 4, 2006

3 thoughts on “Cutting down on unneeded diagnostics”

  1. I’m not sure I understand the arguments against bringing the consumer closer to the cost of what he is buying.

    What, exactly, is the Democrat argument?



  2. The Democrat argument is that only those who are in high tax brackets benefit from the tax avoidance feature of HSAs, and that sick people don’t really have much of a choice about what they spend anyway and may not have the energy to shop around.

  3. What a shame that the issue of transparency is falling prey to political football.

    Those who profess to “have a heart” & “stick out for the little guy” cannot be taken seriously, while opposing fixing our pricing system. The one that makes uninsured and vulnerable pay more (sometimes x10 or x100) than insurers, Medicare / Medicaid included.

    A shameful hypocrisy.

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