We buy many expensive things in our lives such as cars and houses. We finance most of these efficiently via private savings and credit. Funding of health care, though, is distorted by the government. The government provides a tax break for medical expenses but ONLY if you buy your medicine through your employer and ONLY if you finance all of it via insurance, rather than through savings or credit. This introduces two additional parties into the transaction between you and your doctor - two parties who have different interests than you AND that also must be compensated for the time of their involvement. What a waste. The solution is to return power to you. Here are 10 simple fixes:
1) Switch the tax deduction from your employer to you. This A) gets rid of one middleman B) instantly fixes the portability problem where you lose your job and insurance at the same time and C) fixes the problem that if you get sick your insurance company drops you. Notice how few life insurance companies drop customers because they are near death, but health insurance companies drop sick patients. Why would you buy a policy that allowed for that? You wouldn't but your employer would because it's cheaper and really, if you get very sick you'll stop working there, so what do they care if your insurance stays in place for years after you're not working anymore? They don't. In an individual market, policies without long term contractual protections would never sell the way they do with a group based market. Which policy does the HR director at your company select for you? The one that gives you the best coverage or the one that invites all HR managers to Disneyland for an annual conference? Once your own money is withheld and managed for you, you lose power. Fix the tax code and return power to you.
- How it Saves Money: fewer administrators at your company
- How it Improves Quality: When you cut a check directly to a supplier they treat you better.
- How it Empowers You: Directly switches power from your employer to you
2) Make the tax deduction valid whether you buy insurance or save the money for future medical bills. This is the BIG one. It puts YOU in charge. This leads to the concept of the Medical Savings account combined with a catastrophic care policy. Here's an example of how it works: Right now you fork over a huge amount of money each month to an insurance company and then you have to petition for it back if you see a doctor. If you go to the doctor 4 times a year, then in 10 years you have to make 40 applications for reimbursement of your own money. Make no mistake - you are paying the salaries of all the administrators involved, be they at your doctor's office, the insurance company or your company's HR dept. Ugh. Do you really want to pay all these people to control your own money? Most of this can be eliminated. Instead of handing over money every month to the insurance company, you split the premium. Part goes to the insurance company and they get involved in the once-a-decade time when you need an operation or something big. The other part of the premium goes into your medical savings account and you pay for the other 39 visits out of that account. You can see any doctor you want, just like you can buy any computer you want. You don't have to check if a doctor is "in your network". A lot of steps are removed and it's less paperwork and expense for you and your doctor. If something happens and your savings are depleted, your insurance company is the backstop. But it's rare so they need a lot less staff. Plus since you pay the bills yourself, this system reintroduces competition among doctors. No more $100 aspirin charges at hospitals. They only try that cause they send the bill to some administrator who wasn't even there. They could never get away with that if they had to send the bills to you. Waste and fraud are always more when a third party pays. Finally, notice how bad service can be. Doctors often keep you waiting, they often don't want to spend time talking about your condition with you. That's because you don't pay them. You are not a customer. You are a billing code. There's no billing code for "didn't keep patient waiting", nor for "spent time talking to patient". I'm not vilifying doctors, just being realistic that the person cutting the check is the one that runs the show in any process. That should be you, not an insurance administrator 95% of the time. The tax code should allow you to put money into a medical savings account getting the same tax break your employer gets when they withhold from your paycheck and buy insurance on your behalf. You use the savings for valid medical expenses or if you lose your job to keep up payments on your catastrophic care policy.
- How it Saves Money: MANY fewer staff at insurance companies which are reduced to much smaller companies than they are now. Less paperwork for doctors.
- How it Improves Quality: You have more power to shop around and are not restricted to doctors approved by others. When the doctor knows that the check must come from you, they will treat you better.
- How it Empowers You: Directly switches power from the insurance companies to you.
3) Let people buy insurance from any state. What if you could only buy computers made in your state? It's ridiculous and inefficient. If an insurance company wants to compete nationally now it has to set up offices in 50 states and comply with different rules in each state. What a colossal waste of money that could be saved with a simple rule change. In small states, there are so few insurance companies that compete, that they have near monopolies.
- How it Saves Money: Fewer offices and staff at insurance companies.
- How it Improves Quality: This breaks the mini-monopolies which exist in many states and will lead to long term quality improvement inherent with more competition.
- How it Empowers You: Let's you shop around for the best prices
4) Remove insurance 'mandates'. I want a policy that only covers expensive care like cancer and heart attacks. Insurance companies would be willing to sell me such a policy if that's what I wanted to buy. But the transaction is illegal because the government in many states says I can only buy a policy that covers sex change operations, drug rehab, acne and everything else. They phrase it the other way around though. Politicians say that they want the evil insurance companies to pay for these things. But it's the same as prohibiting you from buying what you want. The rest is just spin. These mandated policies are called 'Cadillac' policies. What if car companies could only sell cars with every feature under the sun? "Look at those cheap car companies, they don't want to give you gold rims! Let's make them!" OK, sure, but then look at the price. Catastrophic care, not allergy shots, is what we need to cover. The rest we buy through medical savings accounts, which are cheaper because they eliminate the expensive middleman from most transactions.
- How it Saves Money: Fewer staff at insurance companies trying to make sense of complex rules. Fewer computer programmers coding all the rules into each insurance company's systems. Less abuse from customers taking advantage of services that are mandated to by 'included' in group plans but which are really things they'd never pay for on their own cause they are just not worth it.
- How it Improves Quality: More focus on what you want and less focus on what someone else thinks you want.
- How it Empowers You: Let's you choose a package that lets you cherry pick what you want, not what your neighbor wants and got some politician to foist on everyone.
5) Tort reform. A proven strategy to reduce costs by as much as 20-30%. Standardize penalties and move towards arbitration with experts rather than lottery type lawsuits. Fear of lawsuits negatively affects doctor's judgment. For example, they run extra tests they don't even need just for that one in a zillion case that might come back and sue them (aka 'defensive medicine').
- How it Saves Money: Less money to lawyers. Less expensive defensive medicine
- How it Improves Quality: Doctors are not learning from their mistakes because they don't admit them due to liability. When a plane crashes the NTSB does an investigation and makes improvements. No one is driven to ruin by lawsuits and everyone learns. Consequently plane travel gets safer and safer. Medicine would improve similarly.
- How it Empowers You: It removes power from lawyers and greedy people trying to game the system at everyone's expense and returns power the honest players within it. You do lose the power to frivolously threaten the system but maintain the power to be compensated fairly for real problems.
6) Clear and uniform insurance Labeling. Basically, all policies should have a uniform chart on page 1 saying what they cover and what they don't. More information, not more intervention. This is a lot like uniform nutrition labeling. The congress has the power to create standards to smooth commerce. We can also require insurance companies to write all policies in a standardized format and register these online so that software can easily find and parse all policies and then present them to customers with cross comparisons.
- How it Saves Money: Uniform standards reduce costs and smooth transactions. Customers spend less time shopping and navigating through policies. Clarity up front leads to fewer costly disputes later.
- How it Improves Quality: Clear information leads to better decisions for consumers and less chance for scams and fine print from insurance companies.
- How it Empowers You: Give you more clear information
7) Clear and uniform service provider labeling. How much does it cost to get an MRI at hospital X? Good luck calling to find out. The government can provide simple clear formats for electronically posting or registering basic things online and consumers can take it from there.
- How it Saves Money: same as above
- How it Improves Quality: same as above
- How it Empowers You: Give you more clear information
8) Clear and uniform medical records. A no-brainer to save money. Government should not store your medical records but it can simply provide a computer standard for formating them. All emails are formated one way. All web pages are HTML, etc. A simple XML type format is flexible yet powerful and uniform. Once this is hashed out computer systems can become much more useful and efficient. What if it was like a medical version of facebook. Any doctor can be your friend and post a test to your wall for you or other doctors to see, etc. But you can easily block who has access to what. Lots of good systems can be developed. But without some uniformity, the industry is spinning in circles. It's not hard to pick a records format, but only the government can declare a standard.
- How it Saves Money: Eliminates thousands of non-uniform forms required by all players. Fewer programmers programming thousands of non-uniform non-interoperable systems.
- How it Improves Quality: New systems will allow multiple providers in different facilities to communicate about your case. Fewer mistakes and more information.
- How it Empowers You: You can access your own records, probably for the first time
9) Reform the FDA. The average drug costs over $1 Billion to bring to market. Yes we want to test drugs because if a million people take a drug and 1,000 get sick that's bad. But do we want 50,000 people to die waiting for the drug to be approved? This again comes back to the lawsuit issue. As a drug company I can't be sued if 50,000 people die because I didn't bring a product to market. But if I bring the product to market and save 50,000 people, but 1,000 different people die, I'll be sued into oblivion. Government inhibits and delays the approval process on drugs and then despite their own approval turns around and enables the lawsuits that follow. Once a drug has undergone approval and customers have been clearly warned about the risks, patients must assume some of the responsibility. The drug company can pool some money together so that those that lose the risk can draw benefits from those that gained. The government can acknowledge that cutting edge technology has inherent risk and make this an orderly pool and not a lottery lawsuit with blame assigned to all.
- How it Saves Money: Fewer lawyers. More efficiency in the approval process.
- How it Improves Quality: Many good drugs are unavailable because the approval cost is too high and the risks unfairly distributed. Reform would allow important drugs to come to market.
- How it Empowers You: Let's you use product that work for your body, even if a handful of people react negatively to them.
10) Preexisting conditions & the poor - These last bits will probably end up needing means tested subsidies. But if we can do the big items above, this last bit of welfare will be affordable.
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That's it. That's all that's needed. We don't need 1100 pages of fine print. Have you tried to read the bill? I have. It's practically unreadable legalese. It's the biggest scam ever. And it's a lot more than 1100 pages in the end. It sets up 50+ new agencies each of which will have it's own hundreds or even thousands of pages of regulations. The only people that will be able to navigate the system will be those that wrote it. Do you trust that all current and future politicians and bureaucrats will think only of your interests and not their own? Even if you support the idea that the rich should pay for the system, there's no reason to make the system inefficient by involving a million government bureaucrats at every level. Common sense says that we should make the system more efficient and then there will be more available to everyone.
