What an incredibly tough problem. Make no mistake, the root, nation ruining problem facing America is the rate at which health care provider costs are rising. And don’t listen to the kidders, no nation has solved the problem, they have only made more time before catastrophe.
The biggest part of the problem is the incredible inefficiency of medical providers and the systemic lack of any incentives other than those to increase waste. The obvious solution to that would be open market competition – better companies would provide the same services cheaper and in most cases make more money doing so.
But the market solution is ruined partly by the fact that many people cannot afford service and we as a nation insist on providing service anyway. Don’t listen to the kidders; America is always going to treat the sick and injured regardless of ability to pay.
The second impediment to competition between providers is that so many of us have insurance either through our employer or from the government. Since insurance pays for everything, we just don’t know or care what the providers are charging. In addition, we don’t go shopping when we are sick or injured. For ordinary competition to work we’d have to be spending our own money and we’d have to make provider decisions in advance, before any illness or injury.
These obstacles to a free market allow providers to have five full service, full staff hospitals where there should be one, drug companies to charge any outrageous price they wish, doctors to cover any expense problem by simply charging more and liability lawyers to gorge themselves like ticks on a dog.
Until now, nobody really cared.
Since we are going to provide a service to everyone, regardless of ability to pay, a tempting “solution” is to just have government pay all the bills and collect taxes to get the money. The problem with that is that it’s just a form of entitlement and it only makes the cost escalation problem worse. Don’t listen to the kidders; in nations where costs are lower, the reason is government price controls and rationing and they are still going to go broke one day. Don’t listen to the kidders; some of that is absolutely in America’s future; the alternative is economic ruin. Don’t listen to the kidders; Americans will never let the irresponsible rot in the gutters – get over it.
What some of us are searching for is a more “American” solution to the problem; something that encourages responsibility rather than creates more dependency and certainly something that is permanently affordable. Others want to take the socialist route and the sooner the better. Never forget that the latter approach still leads to economic ruin; it just takes longer.
Insurance is part of what is needed to form an affordable system. The principal is that everybody saves for that rainy day catastrophe but for most of us the day does not come. [It's a kind of voluntary free market distribution of wealth. We running dog capitalists call it risk sharing.] But with insurance, unlike personal savings, we ultimately don’t care what the providers charge when the rainy day comes. We are dependent upon the insurer to control provider charges.
Unfortunately, when there is a dispute between insurers and providers over what services are covered or what the service costs, we take the provider’s side unilaterally. So insurers just raise premiums to cover whatever the providers want to do. The alternative for the insurer is to suffer greater ire from customers and massive punitive damage awards to the liability leaches.
The second problem with an insurance solution is that the average Joe has no concept of insurance as protection from disaster. People who buy any kind of insurance think that every dollar of “loss” should be covered by the “insurance”. But paying a company to pay unavoidable expenses is extremely inefficient and for small amounts, very, very expensive.
People are going to have cuts and scrapes, a need for periodic medical, dental and optometrical examinations and minor procedures. We’ll pay vastly more for these small things if we expect an “insurer” to cover those costs.
Think about just two issues. Would it make sense for a person to pay someone to pay the rent? For any entity, private or government, the operational cost of tracking deposited money from an individual and later paying it to a third party is going to be the same regardless of the size of the payment – say around $35. But $35 on top of an $80 checkup bill is far different than $35 on top on a $25,000 surgery. Insurance only makes sense when protecting against unexpected and unaffordable events.
And don’t listen to the kidders; private companies – while making a profit – will administer anything far cheaper than government.
So we need insurance as part of our solution because it represents savings and because it represents continued growth of those savings over time to match the natural growth of costs over time. Government cannot do insurance because government cannot save and government cannot invest. We need private industry for that. And don’t listen to the kidders; any industry that is responsible for other people’s money must be regulated.
The federal Affordable Care Act and the Massachusetts Act Providing Access to Affordable, Quality, Accountable Health Care basically provide insurance to almost everyone while doing almost nothing about spiraling costs. Both are “paid for” by reducing payments to providers which is absolutely not the same thing. In the federal law there may be hundreds of ideas about controlling cost growth – aka “bending the curve”. Trust me folks, we’ll need to try all of them and more.
At the macro level, the nation must begin to accept a few basic principles that will be the enablers of any real solutions.
1. When the public is paying, services will be rationed.
· Patients will be denied expensive procedures near the end of their lives.
· No transplants for the 350 pound smoker with six other chronic diseases.
· No new hip for the granny in hospice.
· Cancer treatments that cost hundreds of thousands and add only months of life will not be provided.
· Brain dead people will be unplugged. So will those diagnosed as PVS – in a permanent vegetative state.
2. This is critical; this is America: Anyone can buy private insurance to cover absolutely anything.
Next, I believe these concepts to be basic and critical to a real solution:
· The public will not pay any fee-for-service providers. The public will only pay providers who publish their rates by condition. I think the provider should provide the meds and supplies in both acute and chronic situations.
· A non-profit agency will be established to track provider charges and results. This will involve mandatory reporting and all data will be public. My concept would be to pay bonuses to the most effective providers and continuously reduce payments to the least effective. This is the competition part.
· The Medicare board that establishes treatments and costs today will be expanded in order to establish “best practice” procedures for all diagnoses. When the public is paying, nothing outside “best practice” will be covered.
· None of the new agencies may be sued for their practices or decisions – take it up with your legislator.
· No provider may be sued. Disputes will be taken to independent arbitration provided by a nonprofit independent agency. The agency will provide patient advocates and decide all compensation and punitive actions. All results will be public and part of provider tracking.
Finally, I believe that we must do what it takes to legally tax everyone from cradle to grave for government regulated medical services. Standards should be set by the feds but administered by the states. The new “CMS” – currently Centers for Medicare and Medicaid Services – should be outsourced to private industry, by the states, under federal regulation.
Under my system, everyone picks a private insurer exactly as with Medicare B and Medicare Plus. The government pays your basic premium from taxes and you have the right to buy more services. Insurers would absolutely be allowed to operate nationally under federal rules administered by states.
Workable or not, all I’ve provided is an outline of key principles. Try describing this or any other healthcare solution with a 9-9-9 bumper sticker. We need legislators who represent the interests of the nation above their Party and who are allowed to serve long enough to understand complex issues. We need government agencies staffed by real professionals, not lawyers – leave the lawyers in the legislature. Our government agencies must be free from the interference of Executive Branch politicians and ambulance chasing scumbags – if we don’t like agency decisions, take it up with legislators.
Let’s put an end to all government by referendum, Executive Order or judicial fiat.
How’s that for complexity? Don’t you wish you had the responsibility, within our system, to solve this? Have a nice day.
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