e-journal

Beyond Payment and Delivery Reform: The Individual Mandate’s Cost-Control Potential

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In a symposium1 focused on healthcare cost control, most of our authors have unsur prisingly highlighted and assessed Obamacare’s payment and delivery reforms—the supply-side efforts to decrease costs of medical treatment.2 But there is another party in healthcare decision-making who is equally or even more important: the patient. The question we will tackle here is whether the individual mandate and its accompanying patient-centered insurance reforms might decrease costs for
patients in ways that ought to matter in assessing Obamacare’s cost control provisions. The individual mandate’s3 cost control potential lies in its reduction or even elimination of patients’ decision costs. The mandate, together with its minimum coverage requirements and a handful of the statute’s substantive insurance reforms, combats demand-side inefficiencies that might arise from patients’ bounded rationality.4 Decisions about whether to buy commercial insurance, how much insurance to buy, whether to consume preventive care, and how much to pay for that care are all difficult decisions. In order to make optimal choices, patients need a lot
of information that is costly to obtain and to evaluate.5 Although patients, left to their own devices, might nevertheless make perfect choices, they likely would balance the costs from less-than-perfect choices with the cognitive costs of discovering optimal choices. Furthermore, even if unregulated patients did invest in optimal decision-making and therefore made perfectly efficient choices, regulation might be able to improve efficiency if the government can make optimal choices for patients at a lower total and average cost.6 Obamacare’s individual mandate,7 minimum coverage requirements,8 elimination of cost-sharing for preventive care,9 and minimum medical loss ratios10 work together to decrease patients’ decision costs,11 steering patients to particular choices that Congress deemed most efficient.12 If those regulations succeed in improving the efficiency of patients’ healthcare and insurance choices, then the resulting demand-side forces can help to decrease prices. This brief Essay does not attempt to evaluate the regulations’ success; it merely highlights the cost -control implications of Obamcare’s demand-side measures, noting that discussions of cost control should not focus exclusively on the statute’s supply-side effects.

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Ketersediaan

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Informasi Detail

Judul Seri

Law & Medicine

No. Panggil

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Penerbit

Boston : American Society of Law, Medicine & Ethics., 2014

Deskripsi Fisik

American Journal of Law & Medicine 40 (2014): 185-194

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

(2014), 40

Subjek

LAW & MEDICINE

Info Detail Spesifik

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Pernyataan Tanggungjawab

deliza

Versi lain/terkait

Lampiran Berkas

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