Written by Will Rogers
Over the past few weeks the Obama Administration and Congress have unveiled their plans to overhaul healthcare. However, as the political rhetoric between special interest groups and political parties has begun to reach a fever pitch, I have come to the realization that the single most important element of reform has been left out of the discussion thus far.
Obama has proposed a plan that includes a role for government, insurance companies, drug manufacturers, private businesses, hospitals, and medical professionals. Unfortunately, the fact that all of these groups are involved does not automatically mean that real transformation will take place. If Obama wants to have true healthcare reform, he must put the power of decision-making back in the hands of the consumer.
The fact is that most of our healthcare decisions are being made for us. If you are insured, your healthcare is determined by doctors, hospitals, or insurance companies—and the decisions being made are all driven by one thing: profit. On the other hand, if you are uninsured or rely on some form of public healthcare coverage, the decisions regarding your healthcare are being made by the government, doctors, and hospitals—and are driven by cost. Neither one of these situations necessarily creates bad decisions for a patient, but they do not create a consumer-driven healthcare system.
This is not to say that government does not have a role in healthcare reform. In fact, the government has an essential role in creating a meaningful transformation in our healthcare system.
Simply put, if government wants real reform, it needs to put the power of change in the hands of the consumer. This can be accomplished by creating a system of transparency and competition in the marketplace.
One example of how the government can help foster transparency and competition to create consumer driven healthcare, can be found in the state of Florida. Six years ago, Florida was dealing with a medical crisis of its own. Due to a multi-decade long migration of senior citizens to the Sunshine State, prescription drug costs spiraled out of control and resulted in huge increases in Florida’s state budget as it attempt to keep up with benefits for its citizens.
Florida’s solution to this problem was not having the government take over the pharmaceutical industry and local drugstores, however. Instead, the solution created by the state’s leadership was to introduce transparency and competition into the market place.
Florida accomplished this by setting up a website called www.myfloridarx.com. The website works like this. After a doctor gives you a prescription and before you go have it filled, you visit the myfloridarx website. The website gives the user access to a database of prescription drugs, a list of the pharmacies in their area that carry that prescription, and what each pharmacy charges to fill the prescription. At the time of the website’s creation, the difference in price for a prescription at one pharmacy versus another was, in some cases, only a few dollars, while in other cases it was the difference between $4 at one store versus $44 at another store.
As the state of Florida expressed in the creation of the website, “Most pharmacies do not advertise or even display drug prices. This website was developed…to help consumers shop for the lowest price in their area.” By creating a market that was now transparent, consumers had the power to make informed decisions and had real power when it came to making decisions.
One of the initial reactions from some critics to myfloridarx was that it favored pharmacy chains like Walmart, CVS, and Walgreens with large purchasing power, and would put the locally owned pharmacies out of business. In reality, the result was just the opposite. It forced the small drug stores to get leaner and negotiate with drug companies for the same wholesale prices that the chain stores were getting.
The results from the myfloridarx website were astonishing. In less than one year, the price of prescription drugs in the state of Florida decreased by nearly 40%.
Using this same model, Florida has created a new website that creates further transparency and competition in the market place by examining other areas of healthcare such as medical procedures, testing, and services. The new website,
The lesson to be learned from Florida’s example is simple. By informing and empowering consumers to make decisions about their healthcare, most of the issues surrounding healthcare can be resolved without having government take over the healthcare system.
blog comments powered by Disqus