PHILADELPHIA, PENNSYLVANIA – JUNE 22: Republican presidential candidate, former US president … [+]
Presidential candidate Mr. Donald J. Trump announced that he would require the government or insurance companies to pay for IVF treatments. Although this may well apply to America declining birth ratesdirecting the money to the wrong party would jeopardize the interests of patients, American workers and taxpayers.
Since 1978, IVF has helped millions of parents conceive babies. At least in 1994, a successful birth via IVF cost $44,000. Today, thanks to technological advancements and market competition, it costs a lot of money less than $20,000. In the US, these are usually public insurance programs and self-funded private plans do not cover IVF treatments. Individual and fully funded private plans often do not cover IVF unless directed by state law.
If Mr. Trump wants the government or insurance companies to pay for IVF treatments, he faces three options: financing providers, mandatory insurance coverage or patient financing — each with vastly different implications.
Option I: Fund providers (the free Covid-19 testing approach)
The government can pay providers for delivering IVF treatments, similar to the scheme for ‘free’ Covid-19 home tests. This approach would require and be subject to arbitrary bureaucratic pricing typical disadvantages: the inability to respond to market signals and the vulnerability to industry takeover, both of which would result in corporate providers monopolizing the market with little incentive for innovation or quality improvement.
Ultimately, the interests of the patients would be compromised because they are not the ones paying, but the government. To achieve better outcomes, providers must focus more on influencing the regulatory process than on making patients happy.
Option II: Mandate Insurance Coverage (the ACA Approach)
The government may require insurance plans to cover IVF treatments with minimal cost sharing, similar to the essential health benefits mandated by the Affordable Care Act (ACA). This approach would force all beneficiaries to pay for the treatments, raising premiums for employers and employees.
Importantly, insurance plans are subject to the ACAs medical loss ratio They often benefit from higher medical expenses and therefore lack incentives to limit prices. Individual patients, who do not personally and directly benefit from lower prices, also have little motivation to seek out low-cost providers. Both factors would put upward pressure on prices, causing premiums to rise further.
Providers would face rigid payment plans and spend time and resources on prior authorization, claims submission, and other administrative and compliance tasks associated with insurance – a process that rarely benefits patients or drives innovation, often causing burnout among physicians and motivates provider consolidation and higher prices. .
Option III: Fund patients (the defined contribution approach)
The government can pay IVF patients an income-related certain amount, possibly through a tax reduction. Patients would choose their healthcare provider and pay the agreed upon price. If the government subsidy exceeds the cost, the patient keeps the difference; Otherwise, the patient pays the remaining amount himself.
Providers would be able to freely set their prices, innovate and improve quality to attract patients and generate revenue. The market, made up of patients who directly benefit from low-cost, high-quality services, is ruthless toward discounters and low-quality providers, efficiently driving them out.
This approach would ensure that the government can no longer impose rules that benefit certain providers, and that providers no longer have room for supervision and fewer incentives for consolidation. Therefore, all providers, large or small, must compete by constantly innovating, lower pricesand deliver what patients actually need and want.
Patients would not have to worry about network limitations or other administrative complexities associated with insurance. There would be no price discrimination based on insurance; each provider would have only one price for everyone.
For all products and services, including healthcare, the best way to lower prices, stimulate innovation, and benefit consumers is through free market competition. Wrong policies, such as financing providers or mandating insurance coverage, will inevitably let patients down.
Mr. Trump, let’s fund patients, not the system.