Having socialized medicine does not appeal to me and Medicare is not a good example what medical insurance could be. I ask the question “Is there a way to reform our medical care system so that everyone can have adequate quality medical care and eliminate the bureaucratic nonsense that is in our current system?”
To put it another way, “What is wrong with the current system and what can we do to fix it?”
I am not an expert on health care reform, and never will be. I am only a user of the health care system just like the rest of Americans; however I have become a student of the subject by reading and analyzing in a search for answers to the above question. This paper represents my current incomplete answer to the above question.
It would be greatly appreciated if you would like to help with my education on this subject or ways to improvethe quality of the document.
1. More Competition
“Redefining Health Care” (2) talks about competing on “value for patient”. Health Care Value for Patient is health outcome per dollar of cost. When Health Care Value increases, costs go down or quality goes up or both. Metrics on health care value are needed if we wish to improve and fix the health care system. Health Care Value is measured at medical condition level over the full care cycle so that meaningful competition can take place resulting in a continually improving health care system.
Corporate Competition
The purpose of a company is to provide products and services to customers. The general thinking is profits are the purpose. Profits are a tangible way to measure how well a company is serving its customers when it is operating in a truly competitive environment. A profit is made when it successfully delivers products and services to customers. Profits are then used to pay the owners and grow the business. The focus tends to be on profits when it should be on the customers, the source of the profits. In health care, it does not seem right for a business to be making a profit on the sick, but as long as the business is delivering good health care value in a competitive environment this should not be a problem. Also there is no reason to believe that a nonprofit business will automatically deliver better results than a for profit business. It is the value of the health care results delivered that matters.
Corporate Competition in Health Care
Business in health care needs to put health care value delivered as their primary measure ahead of profits. It would be nice if profits were proportional to health care value delivered. Deliver no health care value then get no profits. Deliver health care value then get profits to the degree that health care value was delivered.
In a free market system it is possible to have a monopoly, which eliminates competition. It was necessary to enact antitrust legislation to combat monopolies so that competition could exist in the market place. There are other ways to eliminate competition and when this happens it is the role of government to create, change and enforce laws that guaranty competition in the market place.
To compete in a market, it is normal to have a product or service. For there to be competition, comparisons need to be made so a person can select the best product or service that meets their needs. If a product or service does not exist, can there be competition? If all that exists is a promise to deliver a produced or service sometime in the future when special conditions have been meet, can a person make intelligent comparisons when purchasing the promise? Is this a situation in which the business should not declare a profit or income until the customer has received the product or service promised/purchased? Does government have a role to see that a competitive environment exits in such a market? In the health care industry what is needed is competition on the value of health care delivered. No health care, no income, no profit.
Competition in Health Insurance
If health insurance companies are to compete in the market place, the buyer needs to understand what they are purchasing. Without that knowledge, can intelligent decisions be made? Can there be competition? What are the health insurance companies selling?
Is it a game of chance?
The customer says I will get sick this month. The company says ‘no you will not and we will take that bet’; just pay the monthly premium (your wager) and we will pay your medical bill. When you do not get sick, you lose the bet and the monthly premium. If you get sick, you win; they pay the medical bill. Well, maybe, there is no guarantee that the medical bill will be paid. The company will review your claim and may deny it, thus not paying off the bet. Somehow you did not get what you thought you had purchased (health care when you got sick).
Is it assuming your health care risk?
Instead of you getting sick the company will get sick for you. Somehow that is not what they are selling. It’s the cost of the health care they will assume? That’s getting closer. The first dollars spent for medical care is your problem. No small change for the company. Then they will pay the rest? Not necessarily. There is a limit depending on the size of your premium (wager). And you claim is reviewed just like previous paragraph.
Is it a savings?
Your deposit money in an account, which is held there so that when you need medical care, you can withdraw the money needed to pay the medical bills.
Is it a pool?
You join a group of people that will help pay your medical bills if you help pay their medical bills. You pay a monthly premium that is placed in a pool so when someone in the group has medical needs the money in the pool can be used to pay the medial bills. It is a kind of group savings account.
Is it investing?
Your money is being invested in the health care industry so that when you need health care the providers are available and you will be paid a dividend in the mean time. Then when you need health care you will have funds to pay for your health care and the health care providers will be available.
Is it health care?
You are paying now for health care you may need in the future.
Is it redistribution of wealth?
You are making donations (paying premiums), the amount is based on your wealth, so that people who cannot afford health care when needed can receive health care they/you need.
Is it insurance for the provider?
The money is collected from you by insurance companies before you need medical care. The providers are now assured of receiving compensation when providing medical services. They bill your insurance company when providing medical services.
Is it an advocate for your good health?
They will help you find the best providers as well as paying for you to get you well. They will work with you to stay well. They can be an advocate because of keeping track of which providers do the best job and know what is required to get you well and stay healthy.
When selecting a health insurance company, you are trying to purchase expensive (unaffordable) medical care you may need in the future. You need to know if the company will help you get the best health care value. Will they help you find the best provides that deliverers quality medical care for your medical condition? How much do they pay in calms each year to how many people? How much money did they save by denying claims? What percentage of the premium is paid in benefits? When they increase rates, is it the same for all policyholders they insure or do different groups have different increases? Buying health insurance is not the same thing as buying health care. The health insurance company needs to compete on how well it can get you quality health care, something it has no part in creating, but it is what you want and need.
Provider competition
The patient has no idea what their health care will cost and has no reason to ask or be told since a third party will be paying the bill. The health care provider may not know what will be paid for the patient’s health care. So to get provider competition, make the providers prices for medical care transparent and applied without discrimination (the same payment collected from everyone). Then give the health care bill to the patient for review, approval and payment instead of sending the bill for payment to a third party, who has utterly no idea what medical care was really delivered.
Since many people do not have the funds to pay the bill at the time that they receive medical care, they could pay the bill from their medical account. Everyone should have a medical account used to pay all their medical bills, and all medical bills would be paid from an individual’s medical account. The medical care provider would receive payment only from the medical account of the patient (no cash, no third party). The government and insurance companies paying for the medical care would make the payments to the individual’s medical account. The amount they pay to the individual medical account would be the same as that they would have been paying to the provider for the medical care delivered. Charitable contributions could also be made to the person’s medical account. The patient or guardian of the patient would be financially responsible for the medical account. What is not paid by the insurance companies, governments, and charities; is paid by the person or persons responsible for the medical account. From a providers view point, it is the same procedure for everyone (uniform) with the benefit of not waiting months to get paid and no third party making demands.
The patient has the right to make the choice of their health care provider(s) and the health care they want. When a person makes a choice in the marketplace, they consider many things; cost, quality, functionality and many subjective factors. It is very difficult for one person to make a good decision for another person. For a bureaucracy to make good decisions for people they don't even know is impossible. It is also highly unlikely if not impossible to make good decisions without good information. Also, when a third party is interfering in a very difficult and emotional process by limiting options based on cost and other factors which do not result in quality health care, it is very hard to have a positive outcome.
The patient needs to be making decisions about their money as well as selecting the correct options to treat their medical condition. They need financial information (cost) and medical information so they can select the best options for them self. When a person is sick, it is a time when some very difficult decisions need to be made. This is not the time for a third party to be limiting choices solely to control costs and having no interest in finding choices that will have the best results for the patient.
There are two problems that must be solved. First, the patient must have the ability to authorize the expenditure of funds. This could be accomplished if a sum of money sufficient to cover the anticipated cost to treat their medical condition was deposited into their medical account, an account that can only be used for medical expenses. The money would come from government, private medical insurance, a cost sharing pool or charity. The patient could elect to have a procedure that was more or less than the money deposited in their medical account. If they elected for a more expensive procedure, they would be responsible to make up the difference. If the procedure were less expensive, the surplus would be in their account to be used for medical care as needed. Second, medical outcome data (provider performance) must be available so the patient can select the provider that will deliver, for them, the best medical outcome. Providers must have transparent metrics that are indicative of the quality of the medical care being offered. The patient may need professional help when using the metrics to evaluate providers to be used in treating their medical condition.
Reformers Competing For Better Health Care
The government publishes a measure of the number of people who are uninsured, with the implication that you must have health insurance to get medical care. This number is quoted over and over again and used as an indication of the magnitude of the problem in our health care system. When everyone has health insurance, the problems with funding health care will go away; at least that is the inference. By innuendo the government is selling the idea of insurance delivered by profit making companies. Or maybe they are selling universal health insurance, delivered by a single payer system, the government.
We need meaningful metrics to tell us the magnitude of the medical care system problems. With metrics in place, health care reformers will be able to tell if their changes are working, and how well they’re working. In addition they can compete on which reforms are doing the best job of delivering quality health care. The professionals in the medical care system need to be continually adding metrics as they learn how the metrics can help in delivering quality health at a lower cost. The government needs to establish measures that are definitive in telling how well the medical system is meeting the needs of the American people. All metrics need to be readily available to all the people making health care decisions.
When Competition Is Not Possible
There are times when cooperation is the watchword, not competition. Normal competition is not possible in but one health care system which can only compete by working to improve its own performance. When all the parts of the health care system need to work in harmony in order to provide quality health care, competition is not possible but cooperation is mandatory!
Everyone has a medical history. Every time you see a medical care provider the medical history can change and also the provider needs to update your medical history. When seeing a provider for the first time, one is quizzed on their history and their family’s history. The history is very import. One’s good health could be in the balance, or may be one’s life. In this example there is a lack of cooperation and no amount of competition will make the situation any better. With our technology, great minds and importance, a patient’s medical records should be accessible by any medical care provider 24/7 anywhere in the world that the internet can be accessed.
For this situation, something more than cooperation is needed, leadership. The medial care industry has no leadership.
- “The absence of national medical leadership that would offer programs and policies to deal with the growth and complexity of medical care in the last third of the twentieth century added to the frustration of many physicians. The umbrella organization for all physicians was the American Medical Association, which came to be perceived by the outside world as offering knee-jerk opposition to almost any proposed innovation in the delivery and financing of medical care. Its doctrinaire opposition to virtually all governmentally sponsored programs put it at odds with elected representatives of both parties. Since it seldom proposed meaningful alternative solutions --- as did the leadership of a number of specialty societies---it appeared to behave as if it either did not recognize the problems that beset medicine or preferred the status quo. Significantly, the AMA provided little evidence that it understood or was sensitive to the expressed needs of the general public. This appeared especially to be the case during the period in which Congress passed the bumper crop of health legislation in 1965. Inevitably, the organization's behavior during the debate on the two major initiatives, Medicare and Medicaid, led it to lose credibility among, or to be viewed as irrelevant by, policy makers in both the public and private sectors.” (3)
The importance of leadership in the medical industry cannot be over stated!
Competition and cooperation are very important components in solving the health care crisis but without a true and dedicated leader it is going to be very difficult to accomplish. The leader can be an organization.
PS The epiphany, of no health care leader, came after starting this document.
The title might have been “Health Care Crisis Solution: More Competition, Less Government and a Health Care System Leader”
2. Less Government
To solve the health care crisis we need less government. The government’s laws, rules mandates and bureaucracies create major problems in delivering quality health care in a cost-effective manner! Special interest groups get government to pass laws to solve their problems their way. Laws tend to force people to behave as lawmakers and special interest groups believe to be in somebody's best interest. The laws may help some people, like special interest groups, but hurt other people and have unintended consequences.
- "We have seen that the myriad problems with American health care and health insurance are the result of decades of government interference in the markets for these goods and services. The systematic violation of the rights of health care providers and insurers to freely produce and trade goods and services has created a dysfunctional system that has harmed countless providers, insurers, employers, and patients.
- We have also seen that more government control of medicine and health insurance is not the solution. Evidence and logic show that government interference in the market leads only to rising costs, rationing, and needless suffering and death.
- The current system is unsustainable. Unless policy changes are made, American health care and health insurance will not remain in their currently dysfunctional conditions; they will necessarily get worse (recall that health care costs are rising far more rapidly than the rate of inflation). One way or another, the current situation will change. We do not have a choice in that matter, but we do have a choice as to the direction of that change.” (4)
We need a new health care system, but to do this the government needs to remove the things it has done to create the health care mess. Let us now consider some of the ways the government is hurting health care. This is a short list of an extremely long list of unknown length.
Health Care Insurance: The Addiction
There is a belief that the free market system is not working for health care. Health care costs and quality are not being controlled as would be expected in a free market system. Could it be that a free market system does not exist for health care? Is health care insurance playing a role?
Health insurance is a ‘great thing’? Hospitals and physicians have the assurance of being paid for their services. Employers attract employees with medical care benefits. Employees get medical care they need without worrying about how they are going to pay for it. Employers get to treat medical insurance as a business expense. The health insurance company collects and disperses funds. Health insurance is so great that it is sold to individuals not covered by employer benefits even at a tax disadvantage. These great benefits of health insurance were extended to all over 65 by the government providing health insurance (Medicare). Health care insurance is so great that health care has been turned into a profit making business. Business entrepreneurs are assured of income just by sending bills for services to the health care insurers, like Medicare. The country has become addicted to the concept that one must have health insurance to be able to have health care.
The employers, governments and health insurance companies, in general, are the buyers of health care services not the patient. The consumer of health care does not purchase health care or health care services! Without the consumers of health care participating in the purchasing of their own health care, then one must conclude that a free market in health care does not exist.
Some individuals do buy health care directly, so one would think here could be some free market activity in health care. Health care providers charge the same to all. Medicare and insurance companies set the price that they will pay to providers, which is not what was charged in most cases. The provider's must make their price as high as possible so they can get a reasonable reimbursement from Medicare and other insurance companies. This then shifts the cost onto the uninsured, and those that are not getting as big a discount as Medicare or other insurance companies. For all practical purposes, the charge is nonnegotiable and must be paid and is enforced by legal action. So even for the uninsured, a free market does not exist for medical care.
- “As a consequence the battle between payers (both government and employers), deliverers, and insurers of care placed the real consumer, the patient, on the sidelines. In the traditional economic model there is a tension between the buyer and the seller, but the buyer is also the consumer. In medicine the tension between the purchaser and the seller still existed, but the purchaser---the employer--- was not the consumer. That role belonged to the patient who, seemingly, was left out of the equation. There was little reason to believe that the purchaser truly represented the patient's needs and desires. The priorities that the potential patient set might or might not be those of the employer. Furthermore, the seller was no longer the producer. The seller was the insurance company----insurance, after all, is what the employer was buying. The producer, however, was the physician, the allied health personnel, and the hospital and its infrastructure. The insurer did not represent those interests either. This departure from the traditional economic model that balances interests (not always in, the most equitable manner) between parties with, divergent interests, this confusion of roles, was among the forces making for what has been referred to as the "destabilization" of health care” (3)
It should be clear that the way that health care insurance has been used makes a free market in health care totally impotent. The free market system is what we depend upon to keep prices down and quality up. Then when there is an “infinite” amount of money available for medical care, because insurance will pay, the price for medical care will increase as well as the profits to medical care providers. A for-profit business raises its prices until it starts losing market share or gross profits. To keep prices down the purchaser must be in the position of saying; you price is too high I will buy health care from another health care provider. Since the payer is not the consumer and the health care service has already been delivered, the payer is not in a position of doing this. Medicare tries to keep prices under control by fixing the prices it will pay. This is an impossible task for any bureaucracy to accomplish. Since health insurance has eliminated the free market in health care and thus eliminating competition that is normally used to determine a fair and reasonable price, there is no way to tell how much should be paid to the health care provider. One might think cost information could be helpful, but since there is no competition and no reason to keep costs under control, that doesn't help either. Since, what is charged has no relationship to cost and what is paid has no relationship to what was charged or the costs of providing the medical care. One must conclude that the health care compensation system is totally out of control.
In today's market, insurance pays for services not medical care. It is called fee-for-services. It is resources expended in an attempt to deliver medical care. The more that the provider does the more they bill the insurance and the more they will be paid. What the provider accomplished for the individual is not important when the insurance company pays the bill. The patient/insurance should only be paying for medical care results received.
There can be no free market in medical care when medical care is not what is being bought by the patient and sold by the medical care provider. The government has played a major role in the destruction of our free market system in health care by promoting our addiction to health insurance.
Medical Malpractice
Medical malpractice insurance adds to the cost of medical care by virtue of the premiums paid by medical care providers. There seems to be some debate whether this is a significant cost are not, but the threat of litigation may be much more costly than the cost of malpractice insurance premiums.
The threat of litigation may be doing more harm than good. It is suppressing the disclosure of valuable information, which could be used to increase health care quality and decrease costs through meaningful competition. The patient needs performance information about the perspective providers of medical care when making life-changing decisions.
The below quotation is an indication that the information is being withheld because of the fear of litigation.
- “These continuing medical education and recertification efforts, designed to assure that practitioners maintained their skills, were well intentioned. Nevertheless, they could not be more than proxies for clinical performance. Although "audits" of office practice became a component of some recertification programs, there was no agreed-upon acceptable way to judge how well a physician performed in a day-to-day clinical setting. Regrettably, informal peer review also did not serve well. The threat of litigation led physicians, hospital administrators, and medical societies to keep information about performance quiet. Dr. Fein recalls asking some hundreds of members of a state medical society whether they knew any physicians whom they felt their own family members should avoid. The overwhelming majority responded in the affirmative. Nevertheless, when asked why they were unwilling to "do something about it" in order to protect the public at large and in order to avoid government intervention and handle the problem "within the family," the president of the society intervened with a reminder that if they attempted to deal with "incompetence in some formal manner," they would have to face the threat of suit. In turn, that would require an increase in dues. It became clear that these physicians would readily advise their family members on aspects of physician competence, but were disinclined to take action that would protect all patients. Though refusing to act through their society, they nevertheless continued to decry government attempts to police the system----particularly through licensure----in an effort to improve quality. (3)
Information is required so that good decisions can be made when patients are evaluating medical care providers. This kind of evaluation can result in a competitive environment, which then can lower costs and improve health care quality. With improved health care quality there will be fewer deaths from medical provider’s errors. The lack of the needed information can thus be very costly, much more costly than malpractice insurance. The threat of litigation may not be the only reason for suppressing the required performance and cost information, but it should not be one of the reasons. Any other reasons should also be eliminated.
If the responsible people are doing the right things, they should be shielded from malpractice litigation.
The right things:
- Medical care providers document their performance and make it public. Such as: “Did things go as well as expected? Was the desired results achieved? If not why not? , Etc”
- Medical care providers compare their performance with their own past performance and other providers’ performance and do what is needed to improve their performance.
- When medical care providers determined that an error has been made, they report it. If harm has been done to the patient they take full responsibility and do what is needed to make the patient as whole as possible.
- They do an analysis to determine the facts and the reasons for errors so that the errors will not be repeated when providing care to future patients. The results of the analysis are made available to other providers so they also can avoid making the same mistakes.
- They maintain performance metrics to see if their performance is improving over time, and how they their performance compares to other medical care providers’ performance. They can see who has room for improvement. Then they use the information to improve their own performance.
Litigation should not be necessary if all the responsible people are doing all that is humanly possible to deliver quality medical care. The information, which had been placed in the public domain by the provider or their representative, must not be used against them in litigation proceedings.
If responsible people are not doing the right things so they can deliver quality medical care, then they should not be shielded from malpractice litigation. One might infer, in this situation, that medical malpractice litigation is very appropriate.
If there is a need to determine, ‘who is financial responsibility for medical errors?’ that should be easy. It is the persons or organizations that would be profiting from the medical care provided. Basically, who is sending the bill and collecting the money for the services.
The current way government handles medical malpractice is not working as intended and needs to be changed so that the quality of health care can be increased and the cost decreased.
Government Forcing Emergency Rooms to Be Used As Primary Care Facilities
Emergency Rooms (ERs) are designed and staffed so that emergency medical care can be provided rapidly. Overcrowded ERs defeat the primary purpose of ERs. The government should be concerned on how to keep ERs from being overcrowded. Instead it has passed laws (such as Medicaid, Medicare, and EMTALA) that add to the overcrowding of ERs. ERs are a very costly way to provide medical care. There is a high financial cost but there is also a cost in human life. People are waiting hours that they can ill afford to get emergency medical care. The Emergency Medical Treatment and Labor Act of 1985 (EMTALA) was put in place because the hospitals were asking for payment information before treating the patient. Now the patient can wait hours before being examined to determine their medical condition even when they have the means to pay. The government is causing people to die unnecessarily! In addition, hospitals are closing their emergency rooms because they are not receiving appropriate payments for services they are forced to provide.
The Government Says the Paperwork Is More Important Than Health Care
In the "Health Insurance Portability and Accountability Act (HIPAA)." there is a provision to protect the individual's medical privacy. It makes health care providers criminals if they do not take care of paperwork before providing the patient health care. Health care providers must get a patient to acknowledge in writing their right to medical privacy. The government has managed to increase the cost of health care with no increase in health care benefits. People's privacy needs to be respected by the people handling personal medical information. Education may be needed for some people to accomplish this objective.
A person's medical information is not strictly a private matter. A person with a contagious disease does not have the right to keep it a secret and infect other people. At Virginia Tech 32 people were killed. The individual’s right to privacy may have contributed to the death of 32 people.
A person's medical history has information (implicitly or explicitly) about their medical providers that could be used in determining the provider's performance. This kind of information is needed by others so as to evaluate the providers when considering their own health care options. The information is needed so there can be competition among providers thus increasing quality and decreasing cost.
The law, in protecting a person's medical privacy, makes it more difficult for the patient’s loved ones to work with the medical care providers so as to get proper health care for the patient. The loved ones need to be able to give information and get information so that the patient can be given the proper care.
The law acts as a handy shield. When providers do not wish to give out information that might be incriminating, they say, “We cannot give you that information because it would violate the patient's privacy rights”. It makes investigative reporting difficult and hard for lawyers to get the facts in a malpractice lawsuit.
An individual's medical information contains data that may be valuable to the public. The individual needs to be protected while allowing appropriate public access. The subject is too complex to fit into one-size fits all law. Professional judgment is needed when balancing these potential conflicting interests not a harsh costly law.
3. Search for Solution
The America Health Care Dollar Belongs to Americans
For all practical purpose the money spent on Health Care comes from the wealth created by the American People. There is only one source for this money even though to hear some people talk you could get the impression that there are other sources for the America Health Care Dollar. This may be because most of the money gets into the control of governments and health insurance companies where it becomes their money, which they must control and disperse so that it is properly spent on health care that is really needed, at least in their judgment. They do not want their dollars to be wasted. Because of this tortured journey, not all the American Health Care Dollar gets to pay for health care and not all Americas get the health care for which Americas have paid. It is lost to administration expense, profits, fraud, and who knows what else. It is possible that as much 50% of the American People’s Health Care Dollar does not pay for health care. It is clear the system needs to be reformed so that all the money destined for health care actually gets to pay for quality health care.
A Search for Health Care for All the People of the United States
In most cases health care is something you will need in the future. So why not have every one save on a regular basis so when they get sick, they will have the money to pay for their medical care? Sounds good, but it only works some of the time. One problem is that not everyone earns sufficient income so they can save for their medical care when they have a need. Another is that people do not like saving, especially for something they do not believe they will need. Even when people save a substantial amount of money, their unexpectedly high medical cost can exceed their savings and their ability to pay the medical bills. So savings may be a necessary first step, but it is not sufficient to get the required health care in all cases for all people. Something more is needed.
Not everyone gets sick at the same time, and some people almost never need medical care. So is there a way to share the savings since all the money is not needed at the same time. People could put their savings in a pool so that it could be shared with other people putting their savings in the pool. If someone in the pool does not have sufficient funds to pay for their medical bills, the fund could give or loan them the needed money. A Medical Care Pool is needed, with an administration, to receive and distribute funds.
Not everyone has money to put in the pool. But some people have sufficient wealth that they can pay for their own health care and have funds left over so they could share some of their wealth with people less fortunate than themselves. Everybody needs to make a contribution based on their wealth. For all the people to have health care there must be charity and or welfare. If the total shared wealth is large enough, then with a method of distribution based on need, all the people in America can have health care.
The government is already using taxes to pay medical bills for the qualified poor. These tax dollars could be deposited into the pool to pay for the poor. The special government medical assistance programs would not be needed. The government can quit forcing ER’s to treat the poor since all people can get medical care anywhere. The poor would get medical care just like everyone else. There would be one method to pay for health care for all the people.
Most people are already paying for health care, theirs and others, one way or another. Thus they are not in a position to make a contribution to the Medical Care Pool. There are drastic changes that are needed if these people are to going to have their medical care dollars deposited in the Medical Care Pool. Today the government collects taxes with a large percentage being used to pay for health care. This money needs to go into the pool. This is money that people are already contributing to health care even if they are not aware of it. The amount of money that employers are paying for health insurance needs to go into the pool. The money that people are paying for health insurance should go into the pool as well as the money they are paying for their health care needs. There is a large part of people’s income that is already going to pay for someone’s health care. Many employers are using the employee’s earnings to pay taxes and health care insurance. There must be a major restructuring of the system so the health care dollars get to the Medical Care Pool which then gets to the people that need health care. By doing this, the employers can be relieved of providing health care for their employees which means they do not have to retain a portion of the employees earnings. Since everybody may not be making a contribution based on their wealth, some adjustments may be needed in the tax code. It would be nice if everyone made a contribution freely, but unfortunately the word contribution may be just another word for federal taxes. But as already stated the money is already coming out of American’s pocket. What is being changed or eliminated are the hands it passes through before it gets to pay for some one’s health care. Hopefully with most it making to its final destination, the health care provider, with the hope of reducing administration costs and unwarranted profits.
Today we have a very chaotic way of funding health care and not everybody gets health care. There are different ways to collect the wealth and there are different ways to distributed it. You can only get the wealth from the people that have it. In some way, we must get the health care to the people in need. There is a limit to the amount of health care that can be delivered because there is a limited to the amount of wealth available for contribution into the Medical Care Pool. So everyone must be continually vigilant on health care cost so that there is money to pay for everyone’s health care. Even though the objective is to have health care for all, providing all the health care possible no matter what the cost is not practical.
How do we distribute the funds so that everyone can have health care? The funds would be redistributed based on people’s health care needs. If everybody is going to have health care, is there any other way. People need medical funds to ‘stay well’, so money will be added to their account on a regular basis to satisfy this need. Most people when they have a catastrophic medical event become the less fortunate and need help with paying for medical care. When this happens, the person receives a ‘get well’ deposit. The amount normally needed to get well from their medical condition. When there are extenuating circumstances additional deposits may be needed and made. Some medical conditions are chronic and the people will need regular deposits into their account so their health can ‘remain okay’. In this way all patients all the time can pay for their medical care.
Now that the patient gets health care funds instead of the medical care provider, a problem has been introduced since the patient may use the funds to pay for something other than the medical bills. To solve this problem the funds are deposited into a special account, “The Individual Medical Investment Account”, on which restrictions are placed. The funds may only be used to pay for the patient’s valid medical care delivered by a qualified health professional. In this way, there is some assurance the medical care provider will be paid for the medical care they delivered. The patient receives care and then gets a bill (which will be a major shock and adjustment) for the medical care delivered. The patient reviews the bill, and if they agree that it is for the medical care they received and the amount they agree to pay, then they authorize the bill to be paid from their special account. The provider would get the funds transferred to their account as quickly as if it was charged on a credit card. Everyone would use the same method for paying for their medical care. This should eliminate a lot of administrative costs as well as get the insurance company out of the “doctor’s office”.
The medical care providers will need to change what is being billed. They need to bill for what has been accomplished for the patient, what medical condition has been resolved, what medical diagnoses was made, what medical help the patient received, etc. So the patient will be able to understand what medical care has been delivered. For example: The patient should not be billed for tests. They should be billed based on what the tests accomplished. When the patient is billed on results, they will be in a better position to select medical care providers that deliver the best medical care value.
The Individual Medical Investment Account
A purpose of the Individual Medical Investment Account (IMIA) is to give control to the individual, the patient. There is a relationship that must be restored between a patient and the medical care provider. Because there is third party paying for the medical care, this third party lays clams to the right to affect decisions made by the medical provider and the patient for the purpose of reducing the third party’s financial obligation. Because every individual uses their IMIA to pay for medical care, the medial care provider has no need to know the source of the patients’ funds. From the provider’s point of view, the patent is paying the provider directly from the patient’s funds. Now the health care provider is free to talk about all options available and their cost to patient.
Another purpose of IMIA is to eliminate the need for the interaction between the health care provider and the tired party payers. The provider could now concentrate on health care with no need to be evolved with medical insurance bureaucracies. The health care providers administrative cost should also be substantially reduced, sense all patients use one method to pay for their medical care, no third party payers.
Individuals would have the account from birth to death, used to pay all of their medical bills. Money would be deposited in the account based on the individuals medical care needs. The account would be like a bank account that is used for savings, checking, credit card, debit card, investments, etc. The money in the account would be the individual’s to spend on their medical care expenses. They could also deposit funds to their account. The account would have a credit limit, so they could change to the limit without asking for financial assistance. If they had special needs, they could ask for financial assistance.
The money would be held in a trust, like a national bank. The trust would have the responsibility to care for this money as outlined below. It would pay the bills and invest the money. It would maintain a database and see that the money was only used on medical costs. It would oversee monies owed to the trust from credit cards or borrowing against ones account. The trust would be a nonprofit organization. It would invest the money that it held in trust so that it could pay dividends to the Individual Medical Investment Accounts and to pay for the expenses to run the trust
The trust needs money, financial reserves, to invest so that it can pay dividends to the Individual Medical Investment Accounts and pay its expenses. The trust should have money because of the money that is being deposited into the accounts. There is a risk that the monies used to pay the medical bills would be greater than the deposits. If this is so, the contribution must be adjusted so that the fund would have money to invest. When there are sufficient financial reserves, the contribution would be reduced. The trust should not make highly speculative investments or where investments would present a conflict of interest. It should prefer to make investments in the health care industry with the objective that everyone should have access to quality health care.
An organization would need to be created to oversee the trust so that it is accomplishing its mission, which is quality health care for all. It needs to keep the trust on track, but not tied in knots.
Gifting is the transfer of monies from your IMIA to another IMIA
When an individual has sufficient funds to pay anticipated medical expenses, they can direct how their money is invested as one would do with an investment account. There are limits on how they can invest. For example, they cannot invest in great paintings and hang them in their home or their brother-in-law's plumbing business where they have a financial interest like being on the payroll. The trust must guard against people making investments that are conflicts of interest. The purpose of the individual investing is to allow those who put their own money in the account to make their own investments. A person can borrow money from their account when there are sufficient funds to pay anticipated medical expenses and the person has sufficient needs and is in a position to pay the money back. They will pay interest on money they borrow, which will be equal to the money that the trust is earning on their investments. If the trust is making 10% a year on their money, then the borrower will have to pay 10%. The loan rate will track, up and down, with the trust's earning rate. The trust must guard against people abusing the loan privilege. The purpose for loans is to allow those that have been aggressively putting money into the account to be able to get to it for important personal financial needs. Most people should not need the borrowing provisions of their account.
Some people will not be able to pay their debt. The gifting provision is intended to help reduce this number. The trust will need methods so that they can forgive some of the debt. There's a fine line between forgiveness and entitlement. The trust will need to work hard to educate people that the medical payments are not entitlements, and they are to be repaid. There will be people who will pretend not to be able to make the payments and then others that truly cannot. It will be hard to tell which is which. But the trust must to do the very best it can.
The owner of the account will need to have one or more beneficiaries and directions on how the money in your account is to be divided among the beneficiaries. When loans are made, there needs to be provisions on how the loans will be paid upon death of the owner.
When the insurance companies make payments for medical bills, they will make the payment to the persons individual investment account. There will be absolutely no money going to or from insurance companies and medical care providers. There is no need for the insurance companies to have any dealings with the medical service providers. The trust can send the billing information to the insurance company, which should be sufficient to make payment to the individuals account. The insurance company should pay the same amount as it would have paid if this system did not exist. The provider should not expect any more money than he would have received if the system were not in place.
Assumptions:
- a) There are people who have more than enough money to pay their own medical bills, and can help pay the medical bills of others.
b) There are people who can pay their own medical bills but would be very little help to anybody else.
c) There are people who cannot pay their medical bills, and never will be able to pay them.
d) There are people who cannot pay the medical bills now, but will be able to pay for them in the future.
e) There are people who cannot pay all of the medical bills, but can pay part of them.
f) By taking all the money that is available to pay the medical bills. All the medical bills can be paid. If this is not so, the universal insurance system will not work, a government run health care system will not work. The results would be that some people would not get health care.
g) Since not everyone will be able to pay for their own health care. Someone else will have to pay. Every system must get monies from those who have and use it for those who need. It does not matter whether an insurance company is redistributing the funds or the government is collecting the money in taxes and likewise redistributing the funds.
Everyone should have the medical care they need. Is insurance the answer or maybe there is another way?
Is Medical Insurance Necessary and Sufficient?
We know that the medical insurance companies deny claims so they can increase their profits at the expense of human life. Thus, medical insurance is not sufficient! We also know that if we have a sufficient amount of money we can pay our medical bills. One must reach the conclusion that medical insurance is neither necessary nor sufficient.
OK, that is a little hard. For most people it is necessary and sufficient. But having medical insurance does not necessarily gets you the medical care needed or avoid bankruptcy caused by large medical bills. There are others that cannot or do not even buy insurance, so medical insurance increase their cost of medical care because of cost shifting. Let’s take a close look at Medical Insurance.
Medical Insurance versus Home Owners Insurance
Home owner insurance does a good job of transferring risk from the home owner to the insurance company. For most people buying a house means taking out a “30 year” loan. If the house is destroyed, they are not normally in a position to pay for two houses. They could take the risk that nothing will happen. The chance is very low for the house being destroyed or severally damaged, but if it happens it would be financially devastating. Since the risk is low and the maximum liability can be determined, a company can sell home owner insurance at a reasonable premium. The insurance should be affordable if the house was affordable. The only people that need home owners insurance are the people that own a house.
Everybody can be in the need for major medical care at any time in their life. The probability of a person needing medical care is high. The question is not if but when and how much. Everybody needs some amount of preventive care. For some health needs, there is no limit on the amount of money that could be needed for a person’s medical care.
Asking insurance to assume the financial risks associated with health care expenses is not reasonable. Since the probability for everyone needing health care is high, the premium must be large (the average cost for all Americans plus ten percent). There are a large number of people that cannot afford the large premium, so health insurance is not possible for them. Since the cost of medical care for an individual has no upper limit, an artificial limit must be set no matter which third party is paying. The only question is how high a limit will be set. The higher the limit the larger the premium must be and the financial risk to individuals has not been eliminated. If the goal is health care for all Americans, then health insurance does not meet that goal. It does not take care of the less fortunate. It is not sufficient. If medical insurance is to exist, how should it work?
A Desirable Model for Health Insurance
First it should not be called insurance. Maybe it should be called “Universal Health Care Financing “or “Health Financing”.
The money that people pay to have health care sometime in the future should not be considered as income for the company. The IRS should not tax this money as income. This money should be considered as a deposit in an account that will be use by the company to pay for someone’s health care. It would be like depositing money into a savings account in a bank where the bank pays interest on the deposited money. In this case there would be only one account to which everyone makes deposits. When there are medical needs, money is withdrawn to pay for medical needs. When the patient agrees to the amount of medical care delivered, the company takes from the account payment for the health care services delivered. This payment is taxable income that the company has earned by seeing that the patient receives the best health care possible. There is no income for the company until health care has been delivered to patients. The amount of income would be proportional to the health care delivered. If the patient made a full recovery, something like a maximum of 10% of the costs could be taken as income. If the patient was expected to make a full recovery and did not, then the income might be just 1% of the cost. If the patient died, maybe even no income. Keeping the customer healthy is a way of delivering health care which could generate income for a company.
The company makes an income by getting their customers healthy and keeping them healthy.
Is It Possible?
Health insurance is needed because medical care is so costly.
Medical care is so costly because of health insurance
Referees:
1. Atlas, M.D., Scott W. Power to the Patient: Selected Health Care Issues and Policy Solutions. www.hooverpress.org/productdetails.cfm?PC=1095. [Online] February 25, 2005 . [Cited: Jun 29, 2008.] http://www.hooverpress.org/productdetails.cfm?PC=1095. ISBN: 978-0-8179-4592-3 .
2. Porter, Michael E. and Teisberg, Elizabeth Olmsted. Redefining Health Care Creating ; Value-Based Competition on Results. Boston, MA : Harvard Busines School Press, 2006.
3. Richmond, M.D., Lulius B. and Fein, Ph.D., Rashi. The Health Care Mess ; How We Got into it and What it Will to Get Out. Cambridge : Harvard University Press, 2005.
4. Zinser, Lin and Hsich, Paul. Moral Health Care vs. “Universal Health Care”. TOS Vol. 2, No. 4. [Online] The Objective Standard, Winter 2007-2008. [Cited: June 29, 2008.] http://www.theobjectivestandard.com/issues/2007-winter/moral-vs-universal-health-care.asp.
5. Rich, Robert F. Health Policy, Health Insurance, and the Social Contract. SSRN. [Online] Comparative Labor Law and Policy Journal, Vol. 21, pp. 397-421, Winter 2000. [Cited: June 29, 2008.] http://ssrn.com/abstract=296221.
6. Most Doctors Aren’t Using Electronic Health Records . [Online] The New York Times , June 19, 2008. [Cited: July 4, 2008.] http://www.nytimes.com/2008/06/19/technology/19patient.html?_r=2&adxnnl=1&oref=slogin&adxnnlx=1213884120-m/O7IKytEKHcNINTw0uMqg&oref=slogin.
7. Is Web-based-SaaS Software Right for Your Practice Software Advice. software advise. [Online] [Cited: July 4, 2008.] http://www.softwareadvice.com/medical/is-software-as-a-service-right-for-your-practice/.
Posts
