Whole Foods co-founder and CEO John Mackey contributed a very compelling commentary on health care reform to the August 12 Wall Street Journal. He offers eight reform ideas that differ from the plan currently being considered in Washington in that they would foster less government control and enable greater individual responsibility. This exemplifies a point I made in a recent blog that just because other entities don’t share the Obama administration’s precise reform philosophies doesn’t mean they are against reform altogether. There are an abundance of ideas out there, some good and some not-so-good, but for some to deem them unworthy simply by virtue of being different is rather shortsighted.

In any event, one of Mr. Mackey’s reform ideas is to in some respects deregulate the health insurance industry, namely by allowing smaller and more regionalized health insurers to do business across state lines. Besides spurring the type of competition the Obama plan so greatly values, this would also allow insurers to decrease the administrative investment necessary to comply with 50 different sets of regulations in 50 different states. Making this happen would likely require a federal preemption law that sets regulations that effectively supersede existing state insurance regulations, presenting problems for those folks who believe strongly in “states rights.”

Of course, it wouldn’t be that simple in other dimensions, either. There are any number of secondary issues that would have to be addressed. First, states have put great faith in their individual laws for such things as basic coverage or privacy. For example, some states currently forbid the use of behavioral health and/or substance abuse information in electronic health records, while others don’t. One state may require insurers to pay for a certain treatment or procedure, another may not. And so on. In addition, health insurance is more complex than home or auto insurance where coverage amounts are absolute: a home or car can be reimbursed at either market value or original purchase price; home and auto repairs go to bid and are covered once a deductible is met. There is no definite price for health and we’ve seen that there is little or no consistency in price structure or costs for health care procedures. Also, any plan wanting to expand coverage into new regions would have to create or “rent” provider networks; non-networked physicians have no pricing contracts or reimbursement schedules with health plans. That means they can charge whatever they want with consumers responsible for paying the bill – and many of the bankruptcies reported due to health care costs likely stem from things like a  $72,000 spinal fusion charged by a doctor in New Jersey, in spite of Medicare’s reimbursement rate for that procedure being less than $2,000.

So, while deregulation and cross-state competition may seem like a good idea on the surface because of the competition they may create and the regulatory nightmares they may alleviate, in the end, many insurers would have a whole other set of inefficiencies to contend with and consumers would find navigating the health care system even more treacherous than today.

But, like many reform ideas, perhaps it can all be worked out – with time and with great concern for unintended consequences.