Controlling health costs: make it personal.

I have a great family physician. During a routine physical, we discussed whether or not I should receive boosters for measles and tetanus. We discussed the medical reasons for and against getting the boosters, concluding that the boosters were not necessary. Then he added his financial concerns. "I have to be careful," he said, "in how I recommend treatment. If I casually recommend to a thousand of my patients that they receive booster vaccinations, at $25 or $30 a pop, I've just spent $25,000 or $30,000. I don't feel comfortable spending money like that."

His medical practice is exemplary in involving patients. The office brochure flatly encourages patients to call the office, in all but traumatic emergencies, before going to a hospital emergency room. "Please call our office first. We can often save you money by addressing your concerns on the phone." In one daytime but after-office-hours emergency, I got an appointment on fifteen minutes' notice: "Come in right now." Routine office visits are so reasonably priced that I gladly pay for them to get high-quality care. (How does $20 for a quick visit sound?) He and his staff of physicians and physician assistants strive to give thorough care. "Please take your time," one said. "In this practice we believe in spending time with patients and answering their questions." His staff returns phone calls. Get this: the receptionist phones you when the staff are running behind so you don't come in and have to wait. Sound like Oz? It's not. It's a medical practice in a black, working-class, West Philadelphia neighborhood bordering on the mostly white University City neighborhood surrounding the University of Pennsylvania.

In my experience few physicians keep the cost of their treatment in mind. Yet this family practice not only gives great care, it gives affordable care. It does so precisely because its owners think about costs.

Significantly, the office brochure stresses that providing good health care is a partnership: Don't abuse the opportunity to reach physicians by phone. Call the office if you are going to be late. If you can't pay the fees, talk to us. We can keep our fees low only if you work with us. The current crisis in domestic health care, as it is often styled, is treated as a problem of numbers, whether it be the number of people in the United States who are uninsured or the number of dollars by which health-care costs rise annually. Assuredly, the health-care situation is complex and includes issues such as terminal care, AIDS, tuberculosis, multiple organ transplants, drug abuse, infinite expectations, and so on. Looming behind these megaproblems, however, are the increasing cost and declining accessibility of primary care, the care most families are concerned about. A patient who spends $100 for a minimal, routine office visit and leaves without all his or her questions being answered has experienced a failure in medical care. My concern is that the high cost of primary care drives away consumers: mothers do without prenatal care; babies suffer malnutrition; children are not vaccinated. You can expand this list easily and endlessly.

I submit that the problem of poor primary care may lie in the structural relationship between patients and health-care providers, and that it may be more effective to probe this relationship and to change our behavior accordingly than it would be to simply overhaul the insurance system. For it is the current relationship between patients and health-care providers that goes a long way to inflate the high cost of health care.

Medical providers, who are mostly physicians, do not sufficiently internalize the cost of health care. The owners in the medical practice I described above choose to internalize it: "I don't feel comfortable spending money like that." It is clear to me that my doctor believes deeply in providing good, affordable health care. But his commitment is a matter of the spirit. It cannot be produced simply by legislation or insurance reform. Thus, I acknowledge that I am making a radical suggestion in calling for health-care providers to watch their costs. However, like most matters of behavior, cost-consciousness in medical care can be taught by example. A handful of instructors in each medical school, and a handful of attending physicians and chief residents, could ignite a spiritual transformation. Despite arguments that medical students leave medical school shackled with debt, I think the real obstacle is the I-work-darnn-hard-and-deserve-a-big-salary culture which encourages a self-centered, cost-blind attitude among physicians.

Nor do patients sufficiently internalize the cost of their care. The costs are hidden, to a large extent, by medical insurance itself. Seeing an insurance confirmation that a provider has accepted a $700 payment for a $1,000 MRI bill doesn't hit you in the gut. It ought to: you are paying for it indirectly.

I think that a minor change in health insurance might effectively help patients to internalize a sense of the costs of medical care. I propose that there be a modest copayment for all treatment, a minimum percentage of the total cost, and that such payments would be capped. This modest reform would at once give all patients the incentive to seek less expensive care, and it would bring providers into the free market. How so? Today's typical copayment, if any, is a flat, nominal charge. A flat charge may keep insurance rates down but it does not provide encouragement to the patient to seek the least expensive treatment. In other words, if costs pinched a little, patients might start asking questions and considering alternatives. If costs are diffuse, one's recourse is to complain; if costs pinch, one's recourse is to relieve the pinching. If the patient pays a flat charge, whether the treatment costs $50 or $125, he or she has not internalized the cost of the treatment.

Now consider this alternative. Suppose insurance companies required a 10 percent copayment with a $5 minimum and a $50 cap. A $50 treatment would cost $5, a $125 treatment, $12.50. Already there's an incentive to shop around. Hospitals, medical labs, x-ray facilities, all would face a transformed market. In such a new market, consumers (the patients) would have a self-interest in finding the least expensive provider. And as sure as day follows night, some providers would compete on the basis of cost. Quality, reliability, convenience, proximity, and urgency, all would be factors in purchasing medical services, just as they are now in other purchasing decisions. Currently, the cost-factor is too often absent in medical considerations, and this in turn is a major factor in runaway health costs.

By restructuring insurance, providers might be forced to become more accountable to the buying public. Each provider would make the costs of treatment more visible (and palpable) by virtue of the copayment. And patients might become more cognizant of their responsibility, or at least coresponsibility with their physicians, for keeping costs down. But mutual responsibility for holding down health-care costs only begins here. Physicians must be trained to routinely ask: Is the money for this treatment well spent? And we patients can ask our providers questions, thereby raising their consciousness: How much will this cost me? Why does treatment X cost so much? Is there a cheaper provider? Is there a generic substitute? Do I really need this treatment anyway? Do you have any direct or beneficial interest in the treatment you are ordering?

I am well aware that this brief proposal may be attacked from all sides. I hear the paper tigers growling: "The health-care crisis is not so simple." True, but sometimes we tend to make our problems too complex. Recognizing that apples are apples and not pears, and that there are going to be a variety of changes in health care in the coming decade, it is reasonable to suggest that it would benefit physicians and patients alike if we would jointly take responsibility for keeping costs in check. Raising the consciousness of physicians and patients, coupled with a small structural change in health insurance, might be a significant step in the transformation of health care in America.

Jeremiah P. Reilly, a writer and illustrator, holds a master's degree in applied economics from the John F. Kennedy School of Government at Harvard University.