By Tre Shuttlesworth, Staff Writer
The 2019 Edward S. and A. Rita Schmidt Lecture in Ethics hosted speaker Allison K. Hoffman on Oct. 28 to share economic influences that have affected modern healthcare policy decisions and the negative effects of choice-based healthcare.
The lecture was titled “How Economics Fails Health Law and Policy,” and was held in Stretanksy Concert Hall.
Hoffman said she feels that the heavy reliance on basic economic concepts and ideas lies at the root of our issues.
Hoffman explained that she believes that economics fail health policy in that it makes choice seem like the “end all be all” to Americans.
“My goal today is to convince you that setting priorities on this notion of choice is problematic and to argue that we should begin to amplify choice a little bit less,” Hoffman said.
She noted that these decisions are based on assumptions such as managed competition and moral hazard.
Managed competition infers that insurance plans will over time be catered to consumer demands as they determine the efficiency of their healthcare. However, Hoffman notes that many Americans are unaware of the plans and end up making poor choices.
For example, Hoffman noted that someone can be offered multiple plans at the same price that have different levels of coverage.
The other assumption she noted was moral hazard. This implies that people will be more likely to make risky health choices since the cost incurred for health services is being covered by insurers. Hoffman, however, stated that this implies people are fully aware as health insurance consumers, which is not always the case.
Hoffman also discussed the shortcomings of policies that are choice-based. She noted that in general, it seems people lack the skills and information needed to make decisions about the complex nature of healthcare plans.
She discussed lack of correlation with simple economic concepts of supply and demand and potential for healthcare decisions to fall to cognitive biases.
Hoffman concluded her talk by detailing the strategies that should be applied in order to create a healthcare system that better serves Americans.
She sees a primary key as diminishing the culture of choice-based and market-based solutions in American healthcare.
Other goals include utilizing democratic engagement to see what people value in healthcare and redefining roles and points of expertise for practicing doctors. For example, the United States has primarily specialists as opposed to general practicing doctors. Specialist care tends to be more expensive for patients.
At the end of the lecture, the floor opened for questions from the audience, who asked about the inception of employer involvement in health care plans, the fault in placing faith in consumers and the role of economists in health care in the future.
When asked about the effectiveness of consumer choice in operations such as Lasik eye surgery, Hoffman noted that urgent types of care, as opposed to these cosmetic operations, are more likely be required when a person’s life is at risk.
“If you could imagine yourself in these situations, these don’t feel like consumer decision-making situations,” she said.
Hoffman brought lengthy academic and professional experience to the Schmidt Lecture.
Per the lecture’s program, Schmidt hopes to “impart to students an understanding and appreciation for the value and role of ethics in professional and personal endeavors.”
Hoffman is currently a professor of law at the University of Pennsylvania and is a senior fellow at the university’s Leonard Davis Institute of Health Economics. Hoffman is also a degree holder at Dartmouth College and Yale Law School.
She practiced health law with Ropes and Gray LLP while consulting for The Boston Consulting Group and The BridgeSpan Group.
The Schmidt Lecture is an annual lecture series made possible through an endowment from Susquehanna alumnus Edward R. Schmidt.
