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Behind the Debate Over ‘Medicare for All’

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https://www.weeklystandard.com/chris-deaton/behind-the-debate-over-medicare-for-all

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The federal price tag of Bernie Sanders’s proposal is not surprising. But the implications are kind of insane.

Bernie Sanders’s “Medicare for all” proposal is receiving new scrutiny because of an estimate released this week by economist Chuck Blahous of the right-leaning Mercatus Center. Blahous projects that the plan would cost the government $32.6 trillion over 10 years but also reduce the country’s overall level of health expenditures by $2 trillion. “M4A” advocates say that these numbers are two sides of the same coin: that because the program would redirect spending for health care to the government and lower aggregate expenses in the economy, the exorbitant cost to taxpayers would be, as multiple left-leaning analyses have put it, “a bargain.” But Blahous’s research of the Sanders plan, like that of his contemporaries, is loaded with assumptions and caveats that reduce conclusions about the idea’s cost-saving to speculation. If anything, it’s fair to say that the research shows how M4A is a risk of historic price.

For the average individual, the point of “Medicare for all” is to have federal tax revenue pay for health coverage that is comprehensive and basically free to use. Sanders’s proposal includes wide-ranging benefits applicable in “medically necessary or appropriate” circumstances and eliminates cost-sharing, meaning no copays, deductibles, or similar charges. The expense to households is less take-home pay: a new, de facto “premium” paid to Washington, maybe higher payroll taxes, and, depending on income level and economic behavior, higher income taxes from rate hikes.

Similar trade-offs would appear elsewhere: Businesses would not offer their employees coverage under an M4A scheme, for example. But they, too, would have to foot the cost, through a higher corporate tax rate, potential taxes on their own behavior (like on carbon), and perhaps an employer-specific premium like the one paid by individuals. Some of these ideas are incorporated into Sanders’s thinking; depending on the bill’s projected cost, more of them may be necessary to compensate for the government’s expense.

This is where Blahous’s work comes in. Whereas Sanders’s campaign forecast his M4A plan to cost $1.38 trillion per year, Blahous projected that number to be more than double, at $3.26 trillion, in the paper he published on Monday. “For perspective on these figures, consider that doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan,” he wrote. His assessment met skepticism from some in the press, given Mercatus’s affiliation with the Koch brothers.

Notwithstanding the sloppiness of such a charge—Mercatus is directed by a world-class economist respected across the political spectrum, Tyler Cowen, and Blahous’s paper was peer-reviewed and reflected his own research, regardless—Blahous’s findings were similar to the Urban Institute’s, a well-regarded and left-leaning think tank that examined the Sanders proposal in 2016. Its 10-year federal cost estimate was $3.20 trillion a year.

The Urban Institute economists ran their numbers based on the Vermont senator’s framework for Medicare for all. But Sanders introduced his legislation in the Senate last year, which provided Blahous more specifics to analyze and alternative scenarios to consider. For example: Sanders’s plan caps reimbursements to physicians and hospitals for services at the Medicare reimbursement rate, which is significantly lower than reimbursements under private plans (but higher than those under Medicaid). “In 2014, Medicare hospital payment rates were 62 percent of private insurance payment rates and are currently projected to decline to below 60 percent by the time M4A would be implemented, and to decline further afterward. Medicare physician payment rates were 75 percent of private insurance rates in 2016 and … are projected to decline sharply in relative terms in future years, also falling below 60 percent within the first full decade of M4A,” Blahous writes.

The surprising finding in his study is that Sanders’s Medicare for all bill would decrease national health expenditures (NHEs) over the next decade by $2 trillion. Many M4A advocates celebrated this estimate, given the unlikely source of it. But there are two things to keep in mind. One, national health expenditures are different from government expenditures: They comprise aggregate spending on health care in the United States, in both the private and public sectors. (They have a specific definition, per the Centers for Medicare and Medicaid services, available on Page 6 here.) Two, while keeping reimbursement rates at the relatively low Medicare level would help contain the total dollar figure of NHEs, it also would jar the finances of medical providers.

“Perhaps some facilities and physicians would be able to generate heretofore unachieved cost savings that would enable their continued functioning without significant disruptions,” writes Blahous. “However, at least some undoubtedly would not, thereby reducing the supply of healthcare services at the same time M4A sharply increases healthcare demand.” Difficulty accessing care “almost certainly must arise”—which is not a controversial statement, but mere economic intuition.

“Setting provider payment rates for acute care services at levels consistent with the current law Medicare program may be too restrictive,” the Urban Institute study stated. “Payment rates may in fact have to be higher, at least initially and perhaps indefinitely, to be acceptable to providers.”

Anticipating this scenario, Blahous runs the numbers keeping reimbursements to providers and physicians on pace with current projections. This situation results in an annual cost to government of $3.80 trillion, not $3.26 trillion—and a net increase in NHEs of $3.25 trillion over a decade, instead of a decrease of $2.05 trillion. This represents a range of realistic outcomes, and given political and economic realities, something close to the alternative payment arrangement has to be considered a likelihood.

Of course, all this discussion pertains only to finances, not the pluses and minuses of access and quality of care: low-income individuals getting covered, but consumers demanding more care while suppliers shrink the availability of it, for instance. It also does not consider how the goalposts of whether the public scores a good deal with M4A could move. Jacobin magazine called the Sanders plan “a bargain” based on Blahous’s score, since “[w]e get to insure every single person in the country, virtually eliminate cost-sharing, and save everyone from the hell of constantly changing health insurance all while saving money.” But what if the public doesn’t save money, as in the alternative scenario Blahous evaluates? The same advocates could argue so what?—even if the public is paying more money on net, it’s doing so in the cause of insuring 30 million more people. They could frame those numbers as being worth it.

The thrust of the costs is that M4A is not some unassailable good and an easy system relative to the status quo, even for all the inefficiencies of the current, messy health insurance market. Again, this is not a critique confined to a right-of-center perspective. As the Center for American Progress’s Topher Spiro wrote on Monday (in a since-deleted tweet):

spiro-m4a.jpg

Medicare for all would represent an historically large cost shift between the American economy and federal government. Simply citing the budget impact of such a proposal—$32.6 trillion over a decade—to invalidate the merits of the idea cuts the debate unjustifiably short, as left-of-center critics have stated. But incorporating the other financial aspects of M4A does not cinch their case. It instead complicates it, undermines it, and brings the debate about American health care back to philosophical grounds.

Does the public believe Washington should have total financial control of the market, to the tune of more than $3 trillion in tax revenue a year? Does it trust Washington to allocate those taxes fairly? And given the range of outcomes for reducing health costs—to the point it may not reduce them at all—does it believe that such a transition merits the risk?

 

The Health 202: ‘Medicare for all’ is the dream. ‘Medicaid for more’ could be the reality.

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https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/08/02/the-health-202-medicare-for-all-is-the-dream-medicaid-for-more-could-be-the-reality/5b61d4ed1b326b0207955ea2/?utm_term=.f54d337c2d74

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“Medicare for all” is the hottest position on the left these days, but there’s a quieter push afoot to create a public option using Medicaid. 

Chanting “Medicaid for more” may not sound as bold for progressives seeking to prove their bona fides before the midterm elections. Yet all the most-hyped 2020 Democratic presidential candidates are on board with the idea, including the Medicare expansion’s biggest champion, Sen. Bernie Sanders (I-Vt.).

The idea in concept is simple: Allow states to open up their Medicaid programs to anyone regardless of income. Those people could buy in to the social safety net and have access to Medicaid’s provider network and benefits. The groundwork for expanding the program for low-income Americans has already been laid to some extent as 34 states have expanded Medicaid under the Affordable Care Act.

Sen. Brian Schatz (D-Hawaii) has introduced the “State Public Option Act” to promote states to expand Medicaid — co-sponsored by some familiar Democratic faces: Sanders, Elizabeth Warren (Mass.), Cory Booker (N.J.), Kamala Harris (Calif.) and Kirsten Gillibrand (N.Y.). But the real efforts are happening at the state level where legislatures all over the country are seriously considering the idea.

Heather Howard, a lecturer at Princeton University who also helps states with their health-care systems, said many plans are in their infancy, but that 14 states across the country have made moves to, at minimum, weigh the benefits and challenges of shifting Medicaid to a publicly available health insurance option.

“There are a lot of policy considerations to think about, but while the federal policy debate is stalled, you have states thinking about what tools do we have. [Medicaid] is the immediate tool you have,” she told me.

That’s because Medicare is operated at the federal level so any major changes to it have to be decided in Washington. Medicaid, on the other hand, is run by the states, so they have more discretion over how the program is set up. 

There are real critiques of Medicaid as it now exists, such as low reimbursement rates for doctors and uniform access to care. To offer it to everyone would require responding to those criticisms as well as new questions such as the cost to states, whether states have to apply for federal waivers to alter the program and whether a public option lives on or off the ACA exchanges.

This week stakeholders across New Mexico met with President Obama’s former Centers for Medicare and Medicaid Services Administrator Andy Slavitt to begin some of those conversations. Earlier this year, New Mexico’s state legislature passed a bill to create a committee to study a Medicaid buy-in program. Medicaid is popular there; one-third of New Mexicans are enrolled. Yet 230,000 people remain uninsured in the state, according to Kaiser Family Foundation data, and proposed premium rates for 2019 for those who don’t qualify for ACA subsidies are increasing anywhere from 9.2 percent to 18.5 percent.

Slavitt is the board chair of a new group, United States of Care, which has an impressive roster of bold-faced names leading it from investor Mark Cuban to former Obama speechwriter Jon Favreau to former congresswoman Gabrielle Giffords (D-Ariz.) and her astronaut husband Mark Kelly. In the absence of Washington leadership, the group is working with states on ways to improve health care.

Allison O’Toole, the group’s director of state affairs, was also on the ground in New Mexico this week and told me there’s a “real hunger” and “momentum” around the idea of allowing states to expand Medicaid.

“Washington is in gridlock and not addressing people’s real concerns around the cost and affordability of health care,” O’Toole said. “This has created a greater sense of urgency and necessity by states to pick up that ball and run with it.”

With the Republicans’ failure to repeal the ACA and the public outcry when they tried, Democrats are feeling emboldened this year to talk ambitiously about their health-care goals. 

Health care is a leading issue heading into November, and polls show at least half of Americans are in favor of a “Medicare for all” program. But even if Democrats win the House majority and make gains in the Senate, President Trump has said Obamacare is unsustainable and his administration has worked persistently to chip away at it.

That’s why Michael Sparer, a public- health professor at Columbia University, believes “Medicaid for more” is not only good policy, but also good politics. It’s the type of proposal, he reasons, that could peel off moderate Republicans in a way that a national Medicare program never could. 

It’s true that Medicaid is a favorite GOP punching bag. The Trump administration is urging states to add work requirements to their programs and the GOP playbook has long included capping how much the federal government pays each state to administer Medicaid.

Yet 34 states, including many with Republican governors, expanded the ACA under Medicaid to include more low-income residents, and several more red states are on the precipice of following them. It’s a program that has endured and grown for 53 years.

“The Medicaid buy-in is more of a compromise program, it’s not viewed as a big national program. People who believe in states’ rights can view it as states having more flexibility,” Sparer said.

Sparer has written extensively on the topic and told me his support for expanding Medicaid is heavily influenced by the political viability of focusing on the program for low-income Americans versus the one covering seniors — meaning states don’t have to wait for a new president to do something meaningful. But that doesn’t mean he thinks national political figures like Sanders should stop talking about “Medicare for all.”

“The advantage is [Medicaid buy-in] is incremental, it adds populations here and there. But incremental isn’t a great political slogan. You put ‘let’s change the system’ on a bumper sticker and I get that,” he said. “But the more there’s momentum for ‘Medicare for all,’ then ‘Medicaid for more’ could be the back up plan.”

“Given the ever-present debate,” he added, “a more incremental path is a better path.”

 

 

How Would Individual Market Premiums Change in 2019 in a Stable Policy Environment?

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Click to access Individual-Market-Premium-Outlook-20191.pdf

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Introduction

In recent weeks, insurers in many areas of the country have unveiled the premiums they propose to
charge for individual market health insurance policies in 2019. In setting premiums for 2019, insurers
are taking account of several policy changes that will be newly in effect for the 2019 plan year, including
repeal of the individual mandate penalty and Trump Administration actions to expand the availability
of plans that are exempt from various Affordable Care Act (ACA) requirements. These policy changes
are generally expected to cause many healthier people to leave the individual market and thereby raise
individual market premiums (e.g., CBO 2018a; Blumberg, Buettgens, and Wang 2018).

This analysis examines how premiums might have changed in 2019 in a stable policy environment. To
do so, I first estimate insurers’ revenues and costs in the ACA-compliant individual market through
2018, drawing primarily on insurers’ reports to state and federal regulators. With these estimates as a
starting point, I then estimate how premiums would have changed in 2019 under various assumptions
about how insurers’ costs and margins would have evolved in 2019 without the major pending policy
changes. This analysis reaches two main conclusions:

 Insurers will earn large profits in the ACA-compliant individual market in 2018:
I project that insurers’ revenues in the ACA-compliant individual market will far exceed their
costs in 2018, generating a positive underwriting margin of 10.5 percent of premium revenue.
This is up from a modest positive margin of 1.2 percent of premium revenue in 2017 and
contrasts sharply with the substantial losses insurers incurred in the ACA-compliant market
in 2014, 2015, and 2016. The estimated 2018 margin also far exceeds insurers’ margins in the
pre-ACA individual market. These estimates for 2018 as a whole are broadly consistent with
estimates for the first quarter of 2018 derived from insurers’ first quarter financial filings by
researchers at the Kaiser Family Foundation (Semanskee, Cox, and Levitt 2018).

The estimated improvement in insurers’ margins for 2018 is driven by the substantial
premium increases insurers implemented for 2018, which will almost certainly be more than
sufficient to offset the loss of cost-sharing reduction (CSR) payments and what appears likely
to be another year of moderate growth in underlying claims spending. Prior analysis of
insurers’ 2018 rate filings suggests that many insurers expected policy changes that are now
scheduled to take effect in 2019, notably repeal of the individual mandate penalty, to take effect
in some form during 2018 (Kamal et al. 2017). This may have led insurers to incorporate those
policy changes into their premiums a year early.

 In a stable policy environment, average premiums for ACA-compliant plans
would likely fall in 2019: In this analysis, I define a stable policy environment as one in
which the federal policies toward the individual market in effect for 2018 remain in effect for
3
2019. Notably, this scenario assumes that the individual mandate remains in effect for 2019,
but also assumes that policies implemented prior to 2018, like the end of CSR payments,
remain in effect as well. Under those circumstances, insurers’ costs would rise only moderately
in 2019, primarily reflecting normal growth in medical costs. Meanwhile, for reasons I discuss
in detail in the main text, it is unlikely that insurers would set 2019 premiums with the goal of
keeping margins at their unusually high 2018 level. Downward pressure on premiums from
falling margins would likely more than offset upward pressure on premiums from underlying
cost pressures, so premiums would fall on net.

Indeed, under my base assumptions, I estimate that the nationwide average per member per
month premium in the individual market would fall by 4.3 percent in 2019 in a stable policy
environment. This estimate is subject to some uncertainty, primarily because of uncertainty
about underlying individual market claims trends and about the margins insurers are likely to
target for 2019. However, I estimate that average premiums would have declined in a stable
policy environment under a range of plausible alternative assumptions.

The remainder of this analysis proceeds as follows. The first section provides an overview of my
methodology for estimating insurers’ revenues and costs through 2018, and the second section
presents the resulting estimates. The final section examines what these estimates imply for premium
changes in 2019 in a stable policy environment. A pair of appendices provide additional detail.

 

 

Trump’s undermining of Obamacare violates the Constitution, new lawsuit charges

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https://www.nbcnews.com/politics/donald-trump/trump-s-undermining-obamacare-violates-constitution-new-lawsuit-charges-n896626

Image: People Sign Up For Health Care Coverage Under The Affordable Care Act During First Day Of Open Enrollment

ASHINGTON — After congressional Republicans repeatedly failed last year to repeal the Affordable Care Act, President Donald Trump promised to “let Obamacare implode” on its own.

A new lawsuit being filed Thursday argues that Trump’s efforts to make good on that promise violate the U.S. Constitution.

Trump has “waged a relentless effort to use executive action alone to undermine and, ultimately, eliminate the law,” the complaint charges, according to a draft obtained by NBC News. The lawsuit is being filed in Maryland federal court by the cities of Baltimore, Chicago, Cincinnati and Columbus, Ohio.

Since Trump’s first executive order directing federal agencies to claw back as much of the Affordable Care Act as possible, his directives have increased health coverage costs and depressed enrollment, the complainants say.

Specifically, the suit argues that Trump is violating Article II of the Constitution, requiring the president to “take care that the laws be faithfully executed.”

“There’s a clear case of premeditated destruction of the Affordable Care Act,” said Zach Klein, Columbus city attorney.

This includes making it easier for individuals and trade groups to purchase coverage outside the law’s insurance markets; threatening to eliminate cost-sharing reduction payments; cutting funding for “navigators,” or those who help individuals enroll in the program; and using federal funds Congress dedicated to implementing the law toward making videos criticizing it.

On Wednesday, Health and Human Services Secretary Alex Azar announced a plan for cheaper, short-term insurance plans, the latest example of actions that critics say will drive up costs on Obamacare exchanges.

During a call-in appearance on Rush Limbaugh’s radio show Wednesday, Trump took credit for all but ending the Affordable Care Act.

“I have just about ended Obamacare. We have great health care,” he said. “We have a lot of great things happening right now. New programs are coming out.”

The suit also relies on a list of Trump’s tweets indicating his intent to unravel the law, according to a lawyer involved in the case.

Constitutional scholars have long debated the extent to which the chief executive must “faithfully” execute U.S. laws under Article II — from Franklin Roosevelt’s objections to legislative veto provisions and Harry Truman’s seizure of steel mills.

Citing the same “take care” clause, Republicans took issue with President Barack Obama’s executive orders on immigration as well as his delayed implementation of the health law.

This case stands apart from all others, says Abbe Gluck, a Yale University law professor and expert on Article II, because it’s not about the extent to which Trump is “faithfully” implementing a law. Rather Trump has been frank that he is sabotaging the law, she said.

“That’s what makes this case novel, first of its kind and really important,” Gluck said. “No scholar or court has ever said the president can use his discretion to implement a statute to purposely destroy it.”

“If there’s ever going to be a violation of the ‘take care’ clause, this is it,” she said.

If successful, the suit would strike down aspects of a Trump rule designed to undercut insurance markets; render a judgment he’s violating his constitutional obligation to enforce the statute; and issue an injunction that he implement the law faithfully.

LOCAL IMPACT

The suit also cites Trump scaling back oversight of insurance issuers, cutting open enrollment in half, urging a federal court to throw out Obamacare’s protections for pre-existing conditions and undermining the individual mandate.

All of these actions, they say, undercut confidence in the program and enrollment, the keys to its success. The whole concept of insurance, whether it’s for cars, homes or people, is to minimize risk by creating a diverse pool — in this case of healthy and unhealthy, young and old participants.

John Yoo, a law professor at the University of California, Berkeley, and former Bush Justice Department official, said a president can’t refuse to enforce a law just because he disagrees with it.

Still, Obamacare was written in a way that gives great leeway to the executive, said Yoo.

“Is there something specific in the statute that he is refusing?” he said, adding that funding reductions don’t qualify. “That’s the constitutional standard,” said Yoo.

In 2017, there was a 37 percent average increase in premiums nationwide, and 3 million more people lacked health insurance than did in 2016. In Columbus, city-subsidized health centers saw almost 3,000 more uninsured patients in 2017. As the uninsured rate increases, Columbus must also pay more for ambulance transports, draining millions of dollars from localities.

“The accumulation of these (acts) has cost Americans thousands of dollars more, and it was done in a way that can be clearly traced” to Trump’s orders, said Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid under Obama.

The budget strain is also hampering efforts to address the opioid crisis. Ohio has the second-highest drug overdose death rate, according to the Centers for Disease Control and Prevention, with the city of Columbus averaging nine or 10 Naloxone administrations a day to prevent deaths.

“The time for criticism is over,” Klein said. “We have no ability to recoup that money. We just have to eat it due to the Trump administration’s efforts to sabotage the law.”

HEALTH CARE POLITICS

The plaintiffs deny politics play a role in the timing of the suit, which they say they have been building for the past year.

But it will likely serve as a reminder to voters of Trump’s hand in rising premiums just as they are set to skyrocket. Trump’s 2016 campaign platform was built in part on greater economic security for working-class Americans.

Insurance companies are hiking rates in the individual market, citing decisions being made in Washington. And premiums are set to surge in 2019, with a majority of states proposing increases over and above the previous year.

After several elections in which Republicans used Obamacare to attack Democrats, the party says it’s regained the advantage on the health care issue. In the past few years, the Republican-led Congress has voted dozens of times to try and repeal the law, failing each time. “People got to see they (the GOP) have no better alternative,” said Slavitt.

“Most Democrats are saying ‘look we never said the ACA is perfect, but the other person is trying to take away your coverage,” said Slavitt.

Trump’s former Health and Human Services Secretary Tom Price has also faulted Congress’s repeal of the individual mandate for coming premium increases. Further, Trump’s Justice Department is taking aim at Obamacare’s most popular provisions: a ban on insurance companies’ discriminating against individuals with pre-existing conditions.

CONSTITUTIONAL OBLIGATION

The suit seeks to force Trump to adopt policies intended to expand rather than shrink enrollment; reduce rather than increase premiums; and promote instead of attack the ACA.

Among the specific rules plaintiffs seek to reverse are allowing exchanges to strip individuals of tax credits without notification and reducing oversight of insurance agents and brokers, as well as oversight of the law in general.

“What’s insidious here is the administration is doing it knowing that confidence in the act is key to its success,” said Adam Grogg, senior counsel at Democracy Forward and the lead litigator on the case. The fewer Americans who enroll in the program, the more volatile the market, he said.

“The overall picture here is one of sabotage that drives up the rates of uninsured and underinsured and leaves cites and counties holding the bag,” Grogg said.

Four cities are charging that the president is failing to execute the law by actively undercutting the Affordable Care Act.

 

High Deductibles Aren’t Working

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High Deductibles Aren’t Working

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Each year, for well over a decade, more people have faced higher health insurance deductibles. The theory goes like this: The more of your own money that you have to spend on health care, the more careful you will be — buying only necessary care, purging waste from the system.

But that theory doesn’t fully mesh with reality: High deductibles aren’t working as intended.

A body of research — including randomized studies — shows that people do in fact cut back on care when they have to spend more for it. The problem is that they don’t cut only wasteful care. They also forgo the necessary kind. This, too, is well documented, including with randomized studies.

People don’t know what care they need, which is why they consult doctors. There’s nothing inherently wrong with relying on doctors for medical advice. They’re trained experts, after all. But it runs counter to the growing trend to encourage people to make their own judgments about which care, at what level of quality, is worth the price — in other words, to shop for care.

Shopping for health care may sound ludicrous on its face — and sometimes is. People don’t have time, let alone the cognitive focus, to shop for treatments while having a heart attack, or during any other emergency.

But not all care we need is related to an emergency. Some care is elective, and so potentially “shoppable.” Scholars have estimated that as much as 30 or 40 percent of care falls into this category. It includes things like elective joint replacements and routine checkups.

And yet very few people shop for this type of care, even when they’re on the hook for the bill. Maybe it’s just too complex. Even when price transparency tools are offered to consumers to make it easier, almost nobody uses those them.

A National Bureau of Economic Research working paper published Monday adds a lot more to the story. The study team from Yale, Harvard and Columbia considered a health care service that should be among the easiest to shop for: nonemergency, outpatient, lower-limb M.R.I.s.

This is the kind of imaging you might get if you’re having some trouble with a knee or ankle, but not bad enough to need the image right away.

The study, which focused on more than 50,000 adults between 19 and 64, strongly suggests that people get their M.R.I.s wherever their doctors advise, with little regard to price. The authors didn’t eavesdrop on patients, so they don’t know exactly what the doctors said about where to get M.R.I.s.

But the identity of a patient’s orthopedist explains a lot more about where he or she got her M.R.I. than any other factor considered, including price and distance. Less than 1 percent of patients in the study sample availed themselves of a price comparison tool to shop for M.R.I.s before receiving one.

By this reasoning, the authors concluded that doctors sent people to more expensive locations than they had to. On the way to their M.R.I., patients drove by an average of six other places where the procedure could have been done more cheaply.

“Many patients are going to very expensive providers when lower-price options with equal quality are available,” said Zack Cooper, a health economist at Yale and a co-author of the study. Though patients seem to follow the advice of their doctors on where to go, their doctors don’t have all the information on hand to make the best decisions for the patient either.

There are over 15 M.R.I. locations within a half-hour drive for most patients. As with many health care services, there is a large variation of prices across these locations, which means a tremendous opportunity to save money by selecting lower-priced ones. In one large, urban market, prices for the procedure are as low as about $280 and as high as about $2,100.

If patients went to the lowest-cost M.R.I. that was no farther than they already drove, they’d save 36 percent. Savings rise if they’re willing to travel farther. Within an hour’s drive, for example, savings of 55 percent are available. Savings are split between patient and insurer, depending on cost sharing. On average, patients pay just over $300 toward the cost of the procedure.

There is no evidence that the quality of low- and high-priced M.R.I.s differs, at least enough to be clinically meaningful. The study found that virtually none of the M.R.I.s at any price level had to be repeated — strong evidence that the doctors relying on them are satisfied even with the lower-priced images.

At almost $1,500, the average price of a hospital M.R.I. is more than double that of one at an imaging center. The study found that doctors who work for hospitals (rather than independently) are more likely to send their patients for more expensive hospital-based imaging. Just getting all patients to use M.R.I.s that are no farther away and not in a hospital could save 16 percent.

What this latest study suggests, in the context of other studies, is that if people can’t shop for elective M.R.I.s, there’s hardly a chance they are going to do so with other health care procedures that are more complicated and variable.

Even if 40 percent of health care is shoppable, people are not shopping. What seems likelier to work is doing more to influence what doctors advise.

For example, we could provide physicians with price, quality and distance information for the services they recommend. Further, with financial bonuses, we could give physicians (instead of, or in addition to, patients) some incentive to identify and suggest lower-cost care. An alternative approach is for insurers to refuse to pay more than a reasonable price — like the market-average — for a health care service, though patients could pay the difference if they prefer a higher-priced provider.

Leaving decisions solely to patients, and just making them spend more of their own money, doesn’t work.