I’m part of the problem

That's right, I admit it. But in my defense I'm only responding to incentives just as any other human being would. And I don't feel guilty - after all, when something is "free" I tend to maximize my use of it, just like you. I'm talking about health care here, and I have a little story to demonstrate.

About three weeks ago I quickly developed a good size growth on the floor of my mouth. I called my doctor, and, after agreeing to give it a few days to see if it disappeared, made an appointment to see him.

At the appointment he put me at ease regarding the cancer issue, and told me he thought it was just a cyst, and that I should schedule an appointment with an ENT to get it removed. I scheduled the next available appointment two weeks down the road, and resigned myself to walking around with this small grape in my mouth for the next few weeks over the Holidays.

Fortunately, over that two week span the growth slowly but progressively got smaller and smaller, eventually disappearing almost entirely by the day before my appointment. Which brings me to the part about incentives.

What is one to do when they schedule an appointment with their doctor to have an unusual symptom checked out, but that symptom disappears before the appointment? I can tell you what I did, and why I did it – and why that makes me part of the problem.

Rather than cancelling my appointment, I went in to see my doctor anyway. You see, I'm fortunate and have pretty good health insurance through my wife's job. There was no cost to me to go to this appointment, other than time. Since it had taken awhile to get the appointment, and since I wasn't a hundred percent convinced that the symptom would not reappear, I figured what the heck, I'll go talk with the doc anyway just in case. And as it turns out, the doc did nothing but give me some ideas of what that lump might have been, tell me it's nothing to worry about, and to call him if it ever returns.

That appointment was not necessary for me to keep. But I had no incentive not to keep it. I had no financial interest in the transaction at all – after all, someone else was paying for it. Why not keep the appointment and get checked out, just in case?

Now, I've long argued that high deductible catastrophic loss insurance plans coupled with health savings accounts are one of the best ways to rein in costs, and thus make health care more affordable and accessible. If I had had such a plan, and was paying the several hundred dollars for that appointment today out of my own pocket, I can guarantee you I would have cancelled that appointment. My financial stake in the transaction would have been high enough to force me to think long and hard about how necessary it was for me to see the doctor that day, and I would have had a strong incentive to keep my money in my pocket, saving it for a potentially more urgent health issue down the line.

This is why I've always said that incentives matter, and why our current system whereby most people have "health coverage" as opposed to true "health insurance", where their plans cover every small health issue they encounter as opposed to just the catastrophic issues, is part of the problem. I was only responding to the incentives built into that system.

Now, my little story certainly didn't affect health care costs for anyone else overall – after all, it's just one minor instance. But when you consider that potentially thousands of other people made the same decision as me today, responding to the same incentives, you see how it quickly creates an overall macro-level cost-containment problem. I'm certainly not naïve enough to believe that correcting this incentive structure would magically cure all of our health care woes, but it most definitely is a big piece of the puzzle.

Somewhere today some people who truly needed to see a doctor didn't, because they couldn't afford it. And some (like me) who really didn't need to see a doctor did, because they didn't have to pay for it, thus driving up costs even further for the first group. The only way to change that defect in the system is to change the structure of the system itself, and put more consumers in charge of more of their own health care dollars. It's unfortunate that the current plans in Congress only seek to take our current poorly structured system, expand and subsidize it further, and force people buy into it. Good intentions do not guarantee good results. We're going to learn that lesson the hard way.