A reader writes:
I'm 36, married, no kids, professional services job. Good health insurance in Massachusetts. I work a lot, I drink a little much, eat a little too much (of the wrong stuff), smoke about a pack of cigarettes a year. I also work out 5-6 times a week, never been hospitalized, no chronic symptoms or conditions, no major health issues.
For the past 6 years I've seen the doctor once a year for my physical. This will be the last year I see her annually. Why? B/c my insurance changed - in my age group, I now get charged - and a lot - for a routine visit more than once every three years. I discovered this when I went for my previously scheduled physical and promptly got a bill for $1200!
So that's the "good news" - if you want people to spend less on health care, they have to bear more of the costs of using health care themselves. When I saw that bill there was no controversy, no uncertainty - I'll just wait. If I break my wrist or have unbearable stomach pain I can still go and see my primary care physician. But for the routine stuff - I just won't go.
The concept of moral hazard is right, but the semantics seem wrong. I wasn't trying to exploit anything to which I had no moral right. On the contrary, I'd (thought I'd) paid for a service - relatively limitless visits to a medical professional to confirm my health. Not availing myself of the service was leaving money on the table, like watching frequent flyer miles expire. No one does this - rational homo economicus should do exactly what I did to capture all of my surplus.
So what's the bad news? The bill I received was opaque (other than the amount due). I called the insurance company, and asked what gives. The very helpful customer service rep explained that my policy had changed, and that the services attached to my routine visit were billed as shown. But, since I'd gotten an Xray for some lingering foot pain, she contacted the Dr. and ask her to recode the entire visit (which she did). So it was covered.
Of course, I accepted this 'offer' (frankly, she didn't really ask - she just did it). It is (again) what a rational consumer would do - not leave money on the table. And obviously, whether I pay or the insurer, this event doesn't change the total amount paid for health care. But as I pointed out to the customer service rep, next time I want a physical, I could just complain my ankle is sore.
If the institutions (insurers and doctors) provide proper price signals to consumers, by and large they will be understood and responded to. If they don't - or can't (because our moral system doesn't tolerate the consequences) - they won't and the market will fail. And people will spend a lot of money on health care.