Lasik is odd in at least two ways. It’s in a rare deflationary healthcare category. It’s also awkwardly priced at an average of $2,000 per eye. “Shoes for sale, $50 per shoe.” That aside, could healthcare be more like Lasik, shoppable and/or deflationary?
There are key differences. There are more options in your city for Lasik than hernia surgeries. Lasik is elective. Medical interventions, the type you use insurance for, are not. The picture some paint is that we arrive at hospitals on gurneys. That’s hyperbole. Most hospitalizations for those under-65 are things you can plan in advance for: joint replacements, spinal fusions, and maternity lead the pack. The Healthcare Cost institute says 43% “at most” is shoppable. Author and physician Marty Makary says it’s more like 60%+. It’s best to look beyond one data point. One data point, with its assumptions and methods, is a lone voice–this could be viewed with the same caveat as one person’s opinion of the value of Goldman Sach’s stock. A market of opinions is best (when available).
Of course, the available shoppable universe has to be reduced by what people have the propensity to shop for, or where they’d benefit. It’s a mistake to assume people are going to act as they should, not as they do. Premiums for workers are around $7,000 for single coverage. Even just half of that is enough to interest me, especially hen MRI costs can vary 3-5x+. Even in the goofy world and structure of US insurance, to many people, hundreds, and in many cases thousands, of dollars of savings are available to the individuals.
There are great examples of forms of shopping. Over 155M people are in captured arrangements with employer-sponsored care. Enrollment usually includes a menu of 2-3 plans. 95% of claims are in-network. There are two layers of upfront shopping. We choose plans and color within the in-network lines.
The 1-2M in the unsubsidized (full sticker price) ACA market offers more evidence of willingness to shop. Deductibles are 2.5x higher ($4,000 vs. $1,500 in employer-sponsored). Narrower networks are gladly accepted by over 80% of enrollees. That’s not because people love having fewer choices, but because that comes with lower premium costs.
Shopping’s low hanging fruit is full sticker ACA and the employer-sponsored world. For some big groups, those that numbers in the dozens of millions like Medicaid and Medicare, it makes less sense. But for others, give them the right menu with the right incentives, the right front door savings. Life is reviewed in the rearview mirror, but like stocks, the present and future are what matter the most. To be a little more like Lasik, patients need to know the new channel their going down is worth it.