Balancing Act

Imagine you are shopping for a new car. You would love to have the new $50k Lexus SUV, but you don't have that kind of money so you are test driving a $20k Honda Civic. It doesn't have those nice leather seats you like or the V-6 engine like the Lexus you wanted, but that wasn't in your price range so you settle for something more practical. You're about to say "I'll take it" When suddenly, BOOM! Everything goes dark.

You were in a very bad accident while on the test drive. Luckily you had not purchased the car, so you still have your money, but you notice a dull pain in your left leg as you gain awareness. Your doctor is the first person you see when you wake up and he says, "Well hello there! You had quite the accident, I'm afraid. It looks like we have bad news - We are going to have to amputate your leg... The good news is that prosthetic legs are on sale! Here's the menu! Just let your nurse here know which one you want and I'll pop it on for you."

All prices include surgical attachment:

• Amputation only (no prosthetic):         $ 1,000
• Wooden peg:                                       $ 2,500
• PVC Plastic Prosthetic:                        $ 10,000
• Microprocessor C-leg:                         $ 20,000
• Brain controlled prosthetic:                  $ 100,000

You think for a bit and see the bottom one and say "Wow - a brain controlled one? Gosh I guess that wouldn't be too bad - does my insurance cover that?"

"Your what?"

"My insurance... health insurance... you know..."

"Oh, yeah that no longer exists. You've also been in a coma for a few years - I forgot to tell you that part. We realized patients weren't involved enough in their own healthcare decisions, so President Robamney abolished it. You just pay out of pocket for this stuff now. If you act now, you can get 0.9% interest for 5 years on any purchase of $20k or more!" You realize that $100k is a really steep price to pay for that kind of luxury and you simple cannot afford it. You have the $20k available from that car you were about to purchase, so you choose the C-leg prosthetic.

"Excellent choice, sir. You won't regret it."

This type of payment system would be really interesting for healthcare. How would you react to this situation? I would be learning absolutely everything I could about prosthetic legs and I wouldn't spend more money than I could afford. I would even be willing to receive less care for the sake of saving money, as long as it didn't have a huge impact on my daily life. If I was on a really tight budget, I would be willing to temporarily have a cheaper option while I worked to save money for a more expensive alternative later on down the line. Under this type of payment system, consumer knowledge would increase and net healthcare expenditures would decline. Sounds good, right?

On the other hand, under this type of "pay as you go" system - very few people would be able to afford the average $40k price tag of treating lung cancer out of pocket. If it were a true market system, the poor would not be able to afford the "luxurious" price tag of this disease. Rich people would be able to receive the best treatment that keeps them alive and healthy, while the poor and middle class would be rationing their own care. Of course, this isn't a problem if we are talking about a new Lexus vs a used Honda. As a society, we are ok with people driving 20 year old Honda Civics if they can't afford a new Lexus.

So how do we bring balance to the table? On one side we have personal responsibility and an understanding of true costs. On the other side, we have the need to provide affordable care to those who need it? This is the problem we are facing with healthcare right now, but the debate is usually focused elsewhere. Let's focus on the balancing act and find a solution.