From Scott Alexander on the Amish health care system:
The Muslims claim Mohammed was the last of the prophets, and that after his death God stopped advising earthly religions. But sometimes modern faiths will make a decision so inspired that it could only have come from divine revelation. This is how I feel about the Amish belief that health insurance companies are evil, and that good Christians must have no traffic with them.
The post is about the advantages of the Amish health care system, which seems to have much lower costs and equal effectiveness when compared to conventional American health insurance centered health care.
The post is gripping (well, at least if you're interested in why American health care is so expensive), so I recommend reading it. But briefly, the Amish seem to have much lower costs with the same quality of care due to:
- Bargaining collectively.
- Getting a discount because they have a reputation for paying their bills on time.
- Not going to the doctor for little things.
- Not suing doctors, and thus not getting excessive medical care because a doctor is trying to avoid a malpractice lawsuit.
- Aid and cost sharing being run as nonprofits.
- Keeping administrative expenses low.
- Not taking risks with their health.
- Avoiding excessive spending, because costs are shared by the community.
I wonder if much of this could be replicated with, not an insurance plan, but, something else… an "uninsurance plan":
The uninsurance company would not directly or indirectly cover any medical expenses. This would make it very cheap.
The uninsurance company would bargain collectively on behalf of its members.
Uninsurance members that did not pay their medical bills in a timely fashion would be kicked from the plan and be ineligible to rejoin.
Uninsurance members would be forbidden from suing for medical malpractice except in cases of gross negligence. (Unsure about this one, since it seems to open up members to abuse, but if it's a net benefit, why not?)
Provide members with a health savings account. Health savings accounts are tax-advantaged savings accounts that allow members to pay for qualifying medical expenses from the account. Although the Amish don't have HSAs, giving members access to an HSA should be cheap, and so shouldn't increase the cost of uninsurance. Additionally, since it is the member's own money, it doesn't introduce any perverse incentives.
Give members access to the negotiated price lists up-front, to allow and encourage them to comparison shop. This might be tough, because health care providers keep these prices secret, so they can play hard ball with insurance companies that they negotiate with. But, being able to see what you're going to pay for something is a prerequisite to trying to save money and shop around, so this would be ideal.
The uninsurance company would be run as a nonprofit, or public benefit company.
Since the uninsurance plan is not insurance, it would be uncomplicated to supplement it with an additional insurance, cost-sharing, or risk pooling, scheme to cover unexpected costs, similar to Amish Hospital Aid. This additional scheme would not be run by or affiliated with the uninsurance plan, in order to avoid increasing costs for non-participants.
I suspect that such a plan would be very cheap, to make a number up, perhaps no more than $10 per month. If it were only $10 per month, and members got an HSA, they might want to join just for that. And, if they got insurance-negotiated rates when paying out-of-pocket while being uninsured, the would almost certainly be willing to pay for it.
Such an uninsurance plan would encourage consumers to plan ahead, shop around, and save for medical expenses in their HSA, maybe giving them health care approaching that of the Pennsylvania Dutch.