When “Skin in the Game” is Literal

Back in the Bush years, health policy was all about making sure patients consumers had “skin in the game,” and faced real costs whenever they sought care. More cautious voices worried that patients often didn’t know when to avoid unnecessary care, and when failure to visit a doctor would hurt them. Now there is renewed evidence that the cautionary voices were right:

One-third of US workers now have high-deductible health plans, and those numbers are expected to grow in 2014 as implementation of the Affordable Care Act continues. There is concern that high-deductible health plans might cause enrollees of low socioeconomic status to forgo emergency care as a result of burdensome out-of-pocket costs. . . .Our findings suggest that plan members of low socioeconomic status at small firms responded inappropriately to high-deductible plans and that initial reductions in high-severity ED visits might have increased the need for subsequent hospitalizations. Policy makers and employers should consider proactive strategies to educate high-deductible plan members about their benefit structures or identify members at higher risk of avoiding needed care. They should also consider implementing means-based deductibles.

To put this in more concrete terms: “skin in the game” for many poor families may mean choosing whether to “tough out” a peritonsillar abscess or appendicitis, knowing that the temporary pain may allow them to pay rent, but also may lead to sepsis, necrosis, peritonitis, or death. As Corey Robin has observed, there is a philosophical vision affirming the imposition of such choices, but it’s not utilitarian:

By imposing this drama of choice, the economy becomes a theater of self-disclosure, the stage upon which we discover and reveal our ultimate ends. It is not in the casual chatter of a seminar or the cloistered pews of a church that we determine our values; it is in the duress—the ordeal—of our lived lives, those moments when we are not only free to choose but forced to choose. “Freedom to order our own conduct in the sphere where material circumstances force a choice upon us,” Hayek wrote, “is the air in which alone moral sense grows and in which moral values are daily re-created.”

For some, the choice is between investing in gold or cryptocurrencies; for others, between searing pain and eviction. But the market, in the “skin in the game” vision, is at least distributing these opportunities for self-disclosure through choice to all.

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