Voices from both the left and right are calling for more competition as an answer to soaring health insurance costs. The left wants a public option to compete with private plans to keep them accountable; the right wants to open up competition for private health plans across state lines. Neither seems to understand the nature of competition in health care, and why it does not lead to improved accountability.

Health care is not like selling cars, where manufacturers compete on price, features and quality to consumers of their products. In health care, competition is among middle men — insurance companies and employers, who often negotiate to protect their own interests at the expense of patients, doctors and hospitals — the recipients and providers of health care.

Nationally, there is no correlation between competition in health insurance and lower premiums, and more choice of plans does not generally mean lower costs. Hawai'i, which has had one of the most concentrated commercial health insurance markets in the country, dominated by two insurers, HMSA and Kaiser, has had among the lowest average premiums of any state.

In Hawai'i, every new plan entering the market in recent years has paid lower fees to physicians than the dominant HMSA plan, including fees for clearly underpaid shortage specialties such as primary care internal medicine, family practice, pediatrics and psychiatry. Mainland plans may offer lower premiums, but they pay lower fees, have more burdensome managed-care policies, unreasonable and burdensome drug formulary restrictions and prior authorization requirements, and are generally much worse at claims processing. There is often no recourse and no accountability for doctors struggling with unreasonable policies, especially for Mainland plans with no local input. Doctors often refuse to accept patients with plans they find unreasonable, leading to problems with access to care when people get sick.

The other problem with competition in health insurance is the effect of risk pooling and adverse selection. A plan can only keep premiums affordable if it pools healthy subscribers, whose premiums are greater than their health care costs, with less healthy subscribers, whose care costs more than their premiums. If some plans are able to skim off healthier subscribers and push the sicker ones onto other plans, or on to public plans like Medicaid and Medicare, then the cost will rise for those plans stuck with the sicker subscribers. This is called adverse selection. Especially for individually purchased health insurance, plans try to fight adverse selection by imposing restrictions or charging much more for those with pre-existing conditions.

The state employees' unions are now following the lead of the teachers' union in offering HMA/Summerlin as an alternative to HMSA. HMA/Summerlin has all the above problems of Mainland for-profit plans, and many doctors won't accept it. When many teachers found their doctors would not take their new HMA/Summerlin plan, they pressured their union to open enrollment and allow those who wish to go back to HMSA, for a higher premium. Some of the teachers have gone back to HMSA to preserve access to their doctors.

Unfortunately, you can bet those are generally the ones with more health-care needs, so that HMA/Summerlin has effectively "cherry picked" the healthier teachers who rarely see a doctor and left HMSA with the sicker, more expensive ones. This will pressure HMSA to increase premiums further, forcing more state employees into HMA/Summerlin. As you can see, due to adverse selection, a better plan for doctors and patients can be driven out by a worse plan, and then many patients may find that their doctors will not accept their plan.

In health care, competition does not lead to quality or accountability. We need to stop focusing on competition and start focusing directly on accountability. Hawai'i needs health plans that will truly make health care work better for doctors, hospitals, and patients, and not serve Mainland for-profit insurance companies, pharmacy benefit managers, and other middle men who don't care who gets hurt by their policies.

Health plans should have robust mechanisms to obtain feedback from local doctors and patients about what works and what does not, leading to improvement in policies. A few local plans, including HMSA and UHA do use committees and panels of local providers to influence policies, but most other plans, including all of the Mainland ones, do not. If Hawai'i wants to keep health care premiums down, the unions and the administration would do better to maximize risk pooling instead of increasing competition. If current trends continue, the more responsible and accountable plans could be driven out, and we will all pay the price.

Stephen B. Kemble is a psychiatrist and an assistant professor of medicine at the John A. Burns School of Medicine at the University of Hawai'i-Manoa. He wrote this commentary for The Advertiser.