Kevin Pailet says if the free market is going to drive costs down, consumers need to have 'more skin in the game'

Over time, the cost of most new innovations typically goes down while quality goes up. For example, flat screen TVs are better than they've ever been, and the cost is far less than it's ever been. With respect to medical care, Lasik and other elective procedures are more effective than ever before and yet they cost less than they did a few years ago. Why isn't this true of the health care system in general? The lack of consumerism.
Suppose employers decided to offer a new benefit to employees. Every employee can go out and buy a new car with only a $1,000 co-pay and then the employer will pay the balance. Currently, most of us would probably invest a lot time shopping around for the best price on our new car. We'd look at all of the different options and maybe we'd splurge for a DVD player, a navigation system, leather seats, or sunroof. Few of us would buy all of those features because we wouldn't value them enough to justify the additional cost. But if there was no additional cost we'd buy all of the features. In fact, the manufacturers would probably only make cars that come fully loaded. Furthermore, say goodbye to the Honda or Chevy and say hello to the Mercedes or Porsche. The average cost of the cars driven by the employees would skyrocket.
Does this scenario sound familiar? "I'll pay $25 for medication that costs $40 and I'll pay $25 for the medication I saw on TV that costs $300. Why wouldn't I want the one that costs $300? It doesn't directly affect me."
We all draw the correlation that this drives premiums, but employees don't. It's our job to educate. While we're at it, many pharmacies charge more than others such as many of the warehouses clubs. If you ask an employee if batteries cost less at the corner drug store or a warehouse club like Costco or Sam's Club, they'll immediately respond that the warehouse club has better prices. They don't realize that this may also be true of prescriptions because they make the same co-pay regardless of where they purchase as long as it's in the network.
This is why HDHPs and other consumer-driven plans are critical to changing behavior. We'll spend hours shopping for the best price for a new flat screen TV or to get estimates for a damaged fender, but we'll typically go like sheep to the slaughter down the hall to get an MRI without ever questioning or comparing price. This has got to change for our health care system to survive. We can ration care as consumers or we can have rationing imposed on us by third parties. I, for one, would rather have us in the driver's seat.