Fixed co-pays prevent health care shopping

Regarding The Gazette's July 10 editorial about health care costs: Why do people not shop for health care based on costs?

For the most part, medical encounters are covered by some form of insurance. All the patient knows is that they pay a deductible, a co-pay or some fraction of the total cost. Patients are not stimulated to ask the doctor, hospital or outpatient clinic: “How much will this encounter cost?”

People with high-deductible health care plans are starting to ask questions about costs as they have to put their hand in their pocket for a medical encounter.

The person who has paid his or her deductible and believes there are no more costs involved will consume more services. Those who have to pay out of their own pocket will consume less.

How do we get people to question costs in health care? Insurance should have a percentage co-pay for all medical encounters up to a maximum level.

A fixed co-pay does not stimulate one to “shop around.” Only with a percentage co-pay will there be any stimulus to shop around for a service.

If an MRI costs $1,500 in one location and $2,000 in another, then with a

20 percent co-pay the charge to the patient is $300 in the first instance and $400 in the second. A high co-pay will stimulate more people to ask questions.

The United States spends $700 billion on defense, roughly equal to the defense budgets of the rest of the world. In 2008, we spent $2.4 trillion on health care in this country, with costs still rising.

Dr. Hugh

MacMenamin

Cedar Rapids