What Romney Meant With ‘Firing’ Comment: Americans Should Pay More For Health Care

Speaking at the Nashua Chamber of Commerce this morning, Mitt Romney said, “If you don’t like what [insurance companies] do, you can fire them. I like being able to fire people who provide services to me.” Romney was making the case for increasing the availability of individual health insurance plans with higher deductibles and cost sharing. “I want individuals to have their own insurance,” the former Massachusetts governor said, arguing that Americans who pay more for their own health care insurance plans will spend less on unnecessary services:

ROMNEY: That’s the system we have in health care, everyone just keeps piling on because it’s free…In some places overseas, they have this idea of co-insurance, where people are responsible for a percent of their bill. Let’s say 10 percent. In Switzerland, you’re responsible for, I think 20 percent of your hospital bill. So, if you’re going to have a knee replacement you shop around to see who is going to have the best record and who is reasonably priced…We’re going to have to bring into health care the dynamics of a consumer market so that people have an incentive to look at the cost.

Watch it:

Conservatives have long claimed that giving Americans more “skin in the game” — that is, increasing their sensitivity to prices — would encourage individuals and families to make more informed health care choices, avoid costly treatments and eventually lower health care costs. But there is very little evidence to suggest that asking people to pay more out of pocket would actually reduce health care costs, particularly since most of the spending is concentrated among the sickest Americans (those who suffer from multiple chronic conditions and cannot choose to forgo care).

As Yale professors Theodore Marmor and Jerry Mashaw pointed out in the Philadelphia Inquirer last year, “if free medical care led to more reckless overuse, countries like Canada and Germany, where patient costs are either zero or minimal, would suffer disproportionate inflation in expenditures or severe access pressures. They don’t.” Indeed, the theory doesn’t even hold up in the American health care system, where individuals with higher cost sharing in the employer based system with higher cost sharing don’t seem to spend less than Medicare enrollees with smaller cost sharing.