On the other side of the ledger we find that consumers may also drive up the price for health care through overutilization, also known as moral hazard. Moral hazard arises from the idea that if consumers have too much health insurance, then they will use medical services excessively, or increase their likelihood of engaging in risky behavior. To offset this incentive to take on extra health risks or to use medical services excessively, insurance providers and others have implemented co-pays for office visits, increased employee share costs, charged higher deductibles, and lowered the premium for health care services to simulate a "skin in the game"
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approach. Advocates for this argument point out that the people who should pay the doctors …show more content…
One proposal is to moderate the
“medical-cultural nexus”- to get both consumers and providers to see the futility and risk of excessively aggressive medical interventions, so service intensity declines (Brown).
This skin in the game approach has been debated and deliberated for quite some time but has typically been met with some level of apprehension. Wennberg lists three options to limit the use or restrain the price of medical care in terms of morale hazard: (i) reduce tax deductions for policies that offer excessive benefits, (ii) eliminate tax deductions that subsidize the purchase of insurance, or (iii) implement high deductible health plans that require patients to pay most of the cost of care below a catastrophic threshold. However, Wennberg cautions, these options come with negative consequences. Eliminating or reducing the government subsidy to buy insurance would increase the number of uninsured. Imposing a high deductible discourages people
(particularly those with low income, and those who need heath insurance the most) from using beneficial services, such as preventive care.
Most recently, the Affordable Care Act's cost-control measure imposes a 40%
12
approach. Advocates for this argument point out that the people who should pay the doctors …show more content…
One proposal is to moderate the
“medical-cultural nexus”- to get both consumers and providers to see the futility and risk of excessively aggressive medical interventions, so service intensity declines (Brown).
This skin in the game approach has been debated and deliberated for quite some time but has typically been met with some level of apprehension. Wennberg lists three options to limit the use or restrain the price of medical care in terms of morale hazard: (i) reduce tax deductions for policies that offer excessive benefits, (ii) eliminate tax deductions that subsidize the purchase of insurance, or (iii) implement high deductible health plans that require patients to pay most of the cost of care below a catastrophic threshold. However, Wennberg cautions, these options come with negative consequences. Eliminating or reducing the government subsidy to buy insurance would increase the number of uninsured. Imposing a high deductible discourages people
(particularly those with low income, and those who need heath insurance the most) from using beneficial services, such as preventive care.
Most recently, the Affordable Care Act's cost-control measure imposes a 40%