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What failure modes can you foresee if insurers start paying their patients for choosing cheaper healthcare services?
Right now, patients want the best service their insurance plan covers, which causes hospitals to come up with more and more expensive services that are only marginally better. Insurance companies have no real incentive to drive prices down either, as they are legally obligated to spend their money anyway, and the more people pay them, the larger is the absolute share they are allowed to keep.
But what if the insurer could offer you two hospitals, both covered by your plan, and by opting for the cheaper one, you would get the bulk of the difference in cash, with the insurer pocketing the remainder as rightfully owned profit not subject to the 15% rule? Theoretically, it would cause hospital networks to manage costs more aggressively, as cheaper service would now be a real competitive advantage. "Do you want a $30k C-section, or a $20k C-section and $9k in cash?"
I think the core issue would be determining what is an 'equivalent' healthcare treatment. To use the above example, "Why is the $20k C-section cheaper?". If it's just location arbitrage that's one thing, but if the doctors are actually giving different services, such as using different anesthetics or having fewer staff on call, that's another. To stay on the birth example, a birth with an epidural is a different experience than a birth without one. How should that be handled? Additionally, the differences for a lot of things likely are only legible to doctors so any patient choosing them would be at an information asymmetry, which defeats the purpose of letting them pick since in many cases they won't be able to make an informed decision.
All of the above wouldn't kill the project, but I think you need additional scaffolding to both ensure that patients can make informed decisions and that the choices they are given are all viable/equivalent. You also need tort reform, so the patient can't come crying to the courts when picking cheaper option B causes issues.
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