That's a popular theory, but it doesn't help much because a) we want universal access (poor people just won't use it if they have to pay) b) non-professionals don't review metrics critically and don't have enough knowledge to (and the metrics are hard to interpret for experts) and c) laymen just don't have enough knowledge to make good decisions with their money, they'll just use price as a signal of quality regardless of the underlying quality.
For some ordinary, understandable things, we can get people to pay if they have the means and understanding to do so, but we need to pay for outcomes (indexed for the base sickness of the population) for more complex cases. However, paying for outcomes forces the financial risk onto the doctor, so what we really need is some mixture of "pay for performance" and "fee for service" to keep them in business, but focused on adapting their practices to evidence and modernity over the decades.
One way to reduce bureaucracy and paper work is simply "Medicare for everyone" which reduces the number of forms, data links, and creates a massive negotiating position for the payer which is needed in an inelastic market such as medicine.
To give an example, if the patients are directly on the hook and grandpa is sick, they'll just send him to the "highest quality hospital" as determined by a mixture of patient reviews ("The rooms were well lit and people smiled!") and price ("This is the most expensive and therefore best hospital in the area!"). It might even have the best metrics (the sickest and (correlated) poorest will go to the cheaper hospital and tank their metrics). They'll then pay basically anything to keep grandpa alive regardless of what the hospital asks, maybe raising money if they need to.
Hence, inelastic complex market without where transparency can actually hurt.
The other thing to note is that if people of means pay $100 cash to obtain better healthcare and jump the line, it's kind of like paying more to get gas during hurricane Sandy. You're not creating more or better resources for the people, but merely rearranging them at high cost to the benefit of the affluent. This TED talk has some interesting points about this trend:
I agree that the emergency or otherwise time sensitive stuff is harder to fix up but it's still doable.
I am not suggesting that the rich be able to spend $100 to see a doctor and all the cattle should be left to fend for themselves. What I am suggesting is that it's not outside the realm of possibility for people to fund their own care.
Right now the way insurance is structured they lump together "maintenance" with "serious" and "catastrophic" all in a single insurance policy. That is unfortunate because most regular human beings can self-fund "maintenance" and many can even self-fund "serious" but only very wealthy folks have the capacity to pay for "catastrophic"
The reason we want individuals to pay for "maintenance" and even some "serious" stuff out of pocket is two-fold. First we want competitive pressure on doctors to not jack their prices up. Second, it will help encourage a culture of "do I really need this?" among patients and they will ask their doctors about more than "will it help" but more like "is it worth it" and while some doctors might lie to enrich themselves most that I have met aren't the type.
Why do we want competitive pressure on doctors not to jack their prices up? Because right now the way things work is that the insurance companies have a pretty good idea of what things cost and they negotiate doctors down very aggressively on that. They will of course let the docs make a little money, but nothing crazy. Let's say 10% as an example. If you can only make 10% on your costs then the easiest thing to do is to work on increasing your costs, which then makes a bigger pie for you to earn 10% of. Furthermore there is no incentive for doctors to come up with cost-savings because if they do, it simply reduces the size of their pie to earn 10% of. The unfortunate side effect is that even though medicine has more and more technology and that technology is getting cheaper and cheaper, the cost of medicine is rising.
I realize that I don't have the answers to everything but competitive pressure and rewarding innovation are sorely lacking in medicine today. Other forces are also necessary, like publishing outcome statistics in addition to prices. But I find it very difficult to believe that for the mundane stuff that makes up a lot of a person's exposure to medicine until something serious or catastrophic happens (or late in life) would go a long way towards reshaping people's expectations as well.
For some ordinary, understandable things, we can get people to pay if they have the means and understanding to do so, but we need to pay for outcomes (indexed for the base sickness of the population) for more complex cases. However, paying for outcomes forces the financial risk onto the doctor, so what we really need is some mixture of "pay for performance" and "fee for service" to keep them in business, but focused on adapting their practices to evidence and modernity over the decades.
One way to reduce bureaucracy and paper work is simply "Medicare for everyone" which reduces the number of forms, data links, and creates a massive negotiating position for the payer which is needed in an inelastic market such as medicine.
To give an example, if the patients are directly on the hook and grandpa is sick, they'll just send him to the "highest quality hospital" as determined by a mixture of patient reviews ("The rooms were well lit and people smiled!") and price ("This is the most expensive and therefore best hospital in the area!"). It might even have the best metrics (the sickest and (correlated) poorest will go to the cheaper hospital and tank their metrics). They'll then pay basically anything to keep grandpa alive regardless of what the hospital asks, maybe raising money if they need to.
Hence, inelastic complex market without where transparency can actually hurt.
The other thing to note is that if people of means pay $100 cash to obtain better healthcare and jump the line, it's kind of like paying more to get gas during hurricane Sandy. You're not creating more or better resources for the people, but merely rearranging them at high cost to the benefit of the affluent. This TED talk has some interesting points about this trend:
http://www.ted.com/talks/michael_sandel_why_we_shouldn_t_tru...
Aside: I used to work in the healthcare billing industry.