The Accidental Usher: How the Current Battle Over TennCare Reform Could put the Free Market Back Into Healthcare
By Drew Johnson Gov. Bredesen managed to do the nearly impossible in his recently unveiled plan to salvage TennCare—frustrate many of those advocating the demise of the budget-busting program and those lobbying to protect current benefits. With his proposal to shave $575 million from the behemoth $8.04 billion program by halting healthcare handouts to 323,000 current TennCare recipients, the governor is trying to mend a broken bone with a Band-Aid. Gov. Bredesen managed to do the nearly impossible in his recently unveiled plan to salvage TennCare—frustrate many of those advocating the demise of the budget-busting program and those lobbying to protect current benefits. With his proposal to shave $575 million from the behemoth $8.04 billion program by halting healthcare handouts to 323,000 current TennCare recipients, the governor is trying to mend a broken bone with a Band-Aid. Still, it may unintentionally provide fertile grounds for a market-based healthcare revolution. As we’ll see, the first volleys in that battle are firing 250 miles east of the state capitol, in Greene County. The governor’s scheme ignores the fundamental flaws of TennCare. The proposed benefit limits are so overly generous that they do little to deter superfluous use of benefits by recipients. Nothing thwarts enrollees from using costly emergency room visits for non-emergency needs. Moreover, the governor refuses to acknowledge the unwarranted coverage of hundreds of thousands of children whose parents have the means to provide their health coverage. TennCare currently covers over 340,000 children above the poverty level. If the legislature rubberstamps Gov. Bredesen’s plan, over 5% of Tennessee’s population will need access to quality, low cost, basic health care services. With government incapable of meeting this need, the private sector must fill this void. On the surface, walk-in clinics like those already thriving across the state appear well suited to provide inexpensive health care to newly uninsured Tennesseans. Unfortunately, the majority of such clinics fall short of offering cost-effective healthcare as a result of the prohibitive expense of billing third-party payers. To be profitable, clinics raise the price tag of their medical services to offset the additional staffing and administration necessary to treat insured patients, leaving clinics unable to offer affordable care to the uninsured. Luckily, several entrepreneurial healthcare professionals offer a solution for those facing life without TennCare. Eschewing the insurance-based structure of primary care, these doctors offer a new breed of clinic that does not accept third-party payment. By collecting payment at the time of service and removing the expense associated with billing insurers, doctors at these clinics commonly provide basic treatment for less than half the price of their insurance-accepting competitors. Through paying reasonable amounts for general care out of pocket and avoiding the high premiums of low copayment insurance, Tennesseans with modest incomes, like those most affected by Bredesen’s proposal, can better afford catastrophic insurance coverage. One nationally recognized example of a “payment at the time of service” clinic, the PATMOS EmergiClinic, already exists in Greeneville. Founded by Dr. Robert Berry, PATMOS, an acronym for “Payment at the Moment of Service,” serves those too rich for Medicaid and too poor for low deductible, direct-purchase insurance plans. PATMOS advertisements feature the clinic’s prices to remedy common illnesses and injuries—“$25 to treat poison ivy, $35 for a sore throat, $95 for a simple laceration.” Candor about pricing is the most obvious way these “payment at the time of service” offices differ from doctors reliant on third-party payment. Even insured patients benefit from clear postings of treatment options and prices. Since “payment at the time of service” clinics offer prices that are often competitive with insurance copayment amounts for basic healthcare services, individuals favoring the service and convenience of the clinics or those excited by the opportunity to choose their own physician can utilize the clinics at minimal cost if they choose not to use their insurance. What will be the result? Health care providers will respond to lower priced competitors just as a restaurant, bank, or carwash would: by lowering prices, improving their products and services, or both. Prices will drop while service improves at clinics that accept insurance and at “payment at the time of service” centers. Enactment of Bredesen’s TennCare plan might cause physicians to see the opportunity to provide top-quality care while profiting from owning their own businesses. If so, people formerly shunned from the healthcare system by high prices and a lack of insurance will gain access to quality doctors for the most competitive price. Insured patients will benefit from improved service and care. Gov. Bredesen’s lack of innovation might accidentally create an exciting new era of market-driven healthcare choice for Tennesseans.