The Patient Life: Can Consumers Direct Health Care?

72 Pages Posted: 28 Feb 2008

See all articles by Carl E. Schneider

Carl E. Schneider

University of Michigan Law School

Mark A. Hall

Wake Forest University - School of Law

Date Written: February 29, 2008

Abstract

The ultimate aim of health care policy is good care at good prices. Managed care failed to achieve this goal through influencing providers, so health policy has turned to the only market-based option left: treating patients like consumers. Health insurance and tax policy now pressure patients to spend their own money when they select health plans, providers, and treatments. Expecting patients to choose what they need at the price they want, consumerists believe that market competition will constrain costs while optimizing quality. This classic form of consumerism is today's health policy watchword.

This article evaluates consumerism and the regulatory mechanism of which it is essentially an example - legally mandated disclosure of information. We do so by assessing the crucial assumptions about human nature on which consumerism and mandated disclosure depend. Consumerism operates in a variety of contexts in a variety of ways with a variety of aims. To assess so protean a thing, we ask what a patient's life would really be like in a consumerist world. The literature abounds in theories about how medical consumers should behave. We look for empirical evidence about how real people actually buy health plans, choose providers, and select treatments.

We conclude that consumerism, and thus mandated disclosure generally, are unlikely to accomplish the goals imagined for them. Consumerism's prerequisites are too many and too demanding. First, consumers must have choices that include the coverage, care-takers, and care they want. Second, reliable information about those choices must be available. Third, information must be put before consumers, especially by doctors. Fourth, consumers must receive the information. Fifth, the information must be complete and comprehensible enough for consumers to use it. Sixth, consumers must understand what they are told. Seventh, consumers must be willing to analyze the information. Eighth, consumers must actually analyze the information and do so well enough to make good choices.

Our review of the empirical evidence concludes that these prerequisites cannot be met reliably most of the time. At every stage people encounter daunting hurdles. Like so many other dreams of controlling costs and giving patients control, consumerism is doomed to disappoint. This does not mean that consumerist tools should never be used. It means they should not be used unadvisedly or lightly, but discreetly, advisedly, soberly, and in the fear of error.

Keywords: consumerism, health care, behavioral economics

Suggested Citation

Schneider, Carl E. and Hall, Mark A., The Patient Life: Can Consumers Direct Health Care? (February 29, 2008). Wake Forest Univ. Legal Studies Paper No. 1099054, Available at SSRN: https://ssrn.com/abstract=1099054 or http://dx.doi.org/10.2139/ssrn.1099054

Carl E. Schneider

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4170 (Phone)

Mark A. Hall (Contact Author)

Wake Forest University - School of Law ( email )

P.O. Box 7206
Winston-Salem, NC 27109
United States
336-716-9807 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
241
Abstract Views
2,561
Rank
245,298
PlumX Metrics