Milwaukee has some of the most expensive health care in the country. The main reason, according to a new study by the Wisconsin Policy Research Institute (WPRI) is that there is not enough competition.
The author of the study, Linda Gorman, Ph.D. attributes the high cost to Milwaukee’s historic ties to unions. She says another factor is that health care has become consolidated, leaving less competition to keep costs lower. When competition is lacking, consumers have less alternatives. The result is more expensive health care.
How expensive is Milwaukee’s health care? The WPRI study says Milwaukee’s health care is anywhere from 27 to 55 percent higher than the national average.
State law has contributed to the increasing costs. The WPRI cites that, “Wisconsin law mandates 33 procedures be covered by a health plan operating in the state, including regulations requiring that dentists be included in plans, and mandates that require insurers to cover contraceptives, in-vitro fertilization, prescription drugs, rehabilitation, and well-child care. Each one of these adds to the cost of a consumer’s health care and makes it more difficult for a health plan to operate in Wisconsin.”
What is the solution? Gorman says there are two remedies:
1) There must be market-based tools, such as Health Savings Accounts.
2) High-deductible health plans
Gorman says prices will come down when competition has consumers shopping around. She contends that high deductible policies will allow consumers to actually save over $100,000 during their 40-year work career, and even cites companies like Whole Foods, Wendy’s International Inc, and Lutheran Social Services of Illinois that have experienced success going to HSA’s and high-deductible plans.
Here is the WPRI study.
