WASHINGTON, Nov. 16 (UPI) -- What Americans think of as "basic" health-insurance coverage is not such a basic question, health experts said this week, noting that expectations about what health insurance is expected to do, and its decreasing ability to those things, could be contributing to the nation's healthcare crisis.
"Just finding a way to buy more people into the current system at the current price is a very different question from, 'How can we make the underlying asset more affordable?'" Mark Smith, president and CEO of the California HealthCare Foundation, said at a panel sponsored by the journal Health Affairs. "Dickering around with insurance won't solve the underlying problem."
Elements commonly included in health insurance are actually four distinct financial instruments, he said, only one of which is insurance in the classic sense -- and that is coverage to protect a person's assets from a catastrophic event like a car accident or serious illness.
The other three areas of coverage -- for preventive services, routine treatment and chronic care -- are not insurance because they are used for predictable expenses, Smith said.
But the fact that they are included in health insurance is wreaking havoc in the market for insurance by making people pay more for things they may not need or could get in another way.
"The thing we call 'insurance' is actually four products put together in one financial instrument which is increasingly unaffordable," he said. "If the cost of new tires is included in your auto insurance, that radically distorts the cost of your auto insurance."
For low-income individuals, protecting assets they do not have is not much of a priority, he said. However, lowering the cost of a mammogram from $800 to $150 could dramatically improve health outcomes.
To cover predictable healthcare needs, society could experiment with group preventive care funds and other financial tools, thus lowering the cost of health coverage at the same time, Smith suggested. "We should expand insurance coverage, but think about what insurance really does. Is there a different way to do the things insurance does for you?"
Even as reform packages are being proposed in Washington and elsewhere to expand basic healthcare coverage to all Americans, a recent experiment found that there is surprisingly little consensus as to what that coverage for everyone should include.
"If we're trying to find a way to expand coverage for everybody, what is it everyone should be getting?" asked Marjorie Ginsburg, executive director of Sacramento Healthcare Decisions and author of an article appearing in the November issue of the journal Health Affairs.
In the experiment, 800 healthcare consumers were divided into small groups and asked to balance coverage and cost using a computer program that forced them to make financing trade-offs.
It would be too expensive to provide employer-style insurance for everyone, Ginsburg said, so it is important to find a "floor below which no one should fall."
Consumers expressed preferences to keep cost-sharing low and make coverage as comprehensive as possible, but ultimately "people began to realize there are trade-offs," she said.
And while some trends emerged, groups were all over the map, especially in terms of what services they chose to leave out.
Two groups of benefits that were left off most often, however, were quality-of-life treatments for problems like impotence and infertility and services that do not cure conditions but merely prolong life, like intensive care for the terminally ill.
The experiment participants were also generally very willing to limit patients' choice of doctor, choosing to save money by opting for the most limited physician network.
Coming to some sort of consensus about a basic level of coverage will be important in future attempts at universal coverage, Ginsburg said.
Employers, frustrated with being held hostage to ever-increasing healthcare costs, are increasingly looking for ways to intervene in insurance markets, said Francois de Brantes, national coordinator of Bridges to Excellence, a coalition of employers, healthcare providers and payers that focuses on issues of healthcare cost and quality.
"Employers really find themselves between a rock and a hard place," de Brantes said. "In everything else they do, they can manage their supply chain to find the lowest-cost supplier, but (in insurance) you have a black hole in which money pours in, but you have no reasonable measure of what the output can be."
Consumer-directed health plans, where consumers must make price-conscious decisions about the healthcare they consume, are not the solution, de Brantes said. "They're simply not enough. They don't create enough value intrinsically to compensate for high costs and low quality."
To address their dilemma, employers are using both demand- and supply-side strategies. To reduce their employees' demand for healthcare, they are finding ways to encourage them to make healthy choices, like giving incentives to exercise and quit smoking. From the supply side, through programs like Bridges to Excellence, they are finding ways to ensure that the healthcare they pay for is high quality.
In the current system, employers are often stuck paying for "highly expensive mediocre quality," de Brantes said.
Unfortunately, many companies have outsourced their benefits-management departments, which means it may be increasingly difficult for them to effectively use these strategies -- but help is on the way.
The Department of Health and Human Services is introducing a healthcare purchaser "toolkit" Friday intended to aid employers in making intelligent healthcare decisions.
The underlying structural difficulties of the insurance market mean that current proposals to reform the healthcare system by having a larger share paid for by the government may have a limited impact, the panelists said.
"At the end of the day, whether insurance is provided by employers or others -- you need to go beyond that," de Brantes told United Press International.
Some thinking outside the box of employer-sponsored coverage may be called for, Smith told UPI. Keeping the system intact is largely "rooted in fears of creating winners and losers" on the part of those currently in power.
"We wouldn't do it this way if we started from scratch," Smith said.