That's an interesting proposal: make it free for members and eventually build enough membership that providers are actively wanting to join the network for a monthly fee.
To be clear, I'm happy with any pricing model that accomplishes the goal of helping people who are stuck paying out of pocket for healthcare. But charging providers doesn't seem viable because providers seem quite un-motivated. In fact, Pocketero's biggest challenge right now is getting providers to reply to invites to join the network. Not because they are opposed - they are willing to join if we can speak to someone. Rather they are overwhelmed with customers. They don't reply to emails/faxes/voicemails, they only seem to join if you get them on the phone and walk them through it. Because they are so un-motivated, part of my pitch is "it costs you nothing" - hopefully leaving no possible objections to joining.
But you pose a good question: "those who cannot afford healthcare are they in the position to pay monthly"? I'm starting to think sponsorship is the most viable model - small businesses, churches, etc. paying for memberships en masse. I just added the sponsorship feature on Monday, and may soon pivot the homepage to focus on sponsors. What do you think about that model instead?
Not exactly. It's more like, "You pay in cash either way, we charge you $10/month so you can get the best price instead of the worst price." (It's often a difference of 4x.) This way more people can afford to get the healthcare they need.
You're right, there are medical expenses so huge that even big discounts won't meaningfully help avoid bankruptcy. But let's not only consider worst case scenarios, let's also consider more common scenarios:
- A non-complex surgery that retails for $20k and is discounted to $5k (hopefully on a payment plan).
- A specialist consultation that retails for $1000 and is discounted to $250.
- An urgent care visit that retails for $400 and is discounted to $100.
There are 30 million Americans who don't have health insurance [1] largely because it costs $541/mo on average [2]. Aren't these people well served by a "best price" network at $10/mo?
Yes, I think that is correct - ending government intervention in health insurance would wither the medical billing industry. To be fair, the medical billing industry is not parasitic - it adds value by navigating health insurance billing, which is notoriously complex and time-consuming. But health insurance billing is only so prevalent because of massive government intervention. For example:
- The federal government is by far the largest health insurer - through Medicare and Medicaid it pays for 38% of healthcare in the US [1].
- The federal government directly subsidizes private health insurance through ACA [2].
- The federal tax exemption for employer-paid health insurance is by far the largest by dollars exempted [3].
All these government interventions increase reliance on health insurance, which increases the complexity of billing, which grows the medical billing industry.
Proposed colossal change: a common practice of paying for healthcare out of pocket, instead of through healthcare insurance.
Yes, this sounds unreasonable right now because prices are so high. But bear with me for a second.
Most healthcare in the US is paid through insurance. Insurance creates moral hazard. Insured patients generally don't even need to know the prices of what they're buying, much less negotiate those prices. And here's a dirty secret: insurers don't care much either. They simply add a margin on top of their actuarially-forecasted cost. So healthcare prices rise dramatically over time, because relatively few people are directly exposed to them and push back on them. From this perspective, healthcare insurance is a problem, not a solution.
Don't get me wrong, there are admittedly some obstacles to patients paying out of pocket right now. My point is that we know properly functioning markets set fair prices, and we know our healthcare market is dysfunctional. Healthcare insurance plays a part in that dysfunction.
Patients negotiating directly for better prices eliminates moral hazard and restores market function. Strategically, that would finally restore pressure on healthcare providers, who have become accustomed to raising prices with very little push-back. Without some kind of push-back, providers will continue raising prices - because they can.
> you can actually have a system of government health insurance but keep private healthcare.
This is what we currently have in the US. In fact, the US government is the largest healthcare insurer in the US (through Medicare and Medicaid) [1].
Interestingly, economists have found the US government becoming a healthcare insurer substantially increased US healthcare prices. For example: "Finkelstein estimates that the introduction of Medicare was associated with a 23 percent increase in total hospital expenditures (for all ages) between 1965 and 1970" [2].
It turns out making healthcare "free" to certain people caused them to demand more healthcare. Higher demand caused higher prices. Congress "didn't consider the effect of the increased demand that Medicare set off." [3] Now healthcare prices are high AND Medicare/Medicaid is being paid through deficit spending.
If we want to solve the problem of unreasonably high prices for healthcare, and the debt that causes, we can't keep doing the same thing and expecting different results. We need to fix what we've broken with the healthcare market so it can operate like markets do and find a fair price.
To be clear, I'm happy with any pricing model that accomplishes the goal of helping people who are stuck paying out of pocket for healthcare. But charging providers doesn't seem viable because providers seem quite un-motivated. In fact, Pocketero's biggest challenge right now is getting providers to reply to invites to join the network. Not because they are opposed - they are willing to join if we can speak to someone. Rather they are overwhelmed with customers. They don't reply to emails/faxes/voicemails, they only seem to join if you get them on the phone and walk them through it. Because they are so un-motivated, part of my pitch is "it costs you nothing" - hopefully leaving no possible objections to joining.
But you pose a good question: "those who cannot afford healthcare are they in the position to pay monthly"? I'm starting to think sponsorship is the most viable model - small businesses, churches, etc. paying for memberships en masse. I just added the sponsorship feature on Monday, and may soon pivot the homepage to focus on sponsors. What do you think about that model instead?