edit: Okay, I saw the phrase "moral hazard" and decided to search on page for "HSA". Bingo. This is ~90% Republican boilerplate. Let the consumers directly assume more cost and more risk, and tell women to stop expecting pre-natal care. Sluts knew what they were getting into.
You don't think there could be some validity to the idea that insurance really drives up costs, and if the majority of medical procedures were paid for out of pocket, the costs would fall to levels people could afford out of necessity?
The underlying assumption behind the "skin in the game" theory of controlling costs is that health care behaves like the iconic Econ 101 Widget: producers compete to make it cheaper because the consumer can easily compare the costs with the utility they'd get out of the widgets.
But health care operates differently, for two reasons:
1) Giant information costs. There's a 99% chance you don't know enough to reliably diagnose yourself and decide on a course of treatment. The cost of learning if you like a dish at a restaurant is ~$20 and an hour of your time. The cost of making informed medical decisions is ~$90,000 and four years. So we have professionals and rely on them.
2) Cost-benefit analysis tends to get chucked out the window when
death is on the line. If your physician tells you that the pains are probably nothing, but there's a 5% chance that it's horrible cancer which will kill you in a year if you don't catch it, then you're getting that fancy new test, whether your insurance covers it or you're putting $2,000 on your credit card.
Because of these two, the high stakes and asymmetric information, doctors are the de facto decisionmakers for most patients. If anyone's incentives should be changed, it's theirs.
The current healthcare bill moves towards paying providers based on results, rather than a per-procedure fee which encourages overtesting. The author of the Atlantic piece just assumes that doctors will change their fee structure because of the power of the market, which I seriously doubt. Look at the credit industry: they deal directly with the customer all the time and their fee structures have gotten less and less fair.
The author also assumes that these problems will be solved by the emergence of a new profession of patient advocates, which basically translates as "well, you can always sue your doctor". My guess is this would have about a gazillion unintended consequences, the most obvious one being that upper- and middle-class patients will scare doctors into behaving better for them than they do for the dirty poors. More litigation, even if it's in a new, supposedly streamlined process, is almost never the best way to fix a system.
