What follows is a summary of the plan for The American Health Care System. This summary is only a few pages and therefore cannot answer all questions or address all issues but is intended to outline broad ideas.
The Need
Our healthcare system has problems. Prices are too high and rising. Availability of insurance is not uniform and the delivery and pricing systems are dysfunctional and unfair. There is widespread agreement that the system needs reform, but there are widely divergent views of the solutions needed.
Defining We
Our health care system affects everyone in America. The number and type of providers available and the quality of care and the prices charged by those providers are concerns for each of us, whether you are a consumer or a provider. Likewise, the availability and pricing of insurance and coverages available are a concern for all of us.
Doctors and nurses and patients will have a role in the solution. So will insurance companies and drug companies and those who create medical devices. Charities will have a role to play. And yes, so will government.
What is the Problem?
The problem with our health care system exists because we have created a dysfunctional system. There is plenty of blame to go around, but when we instituted wage and price controls in World War 2 employers had trouble attracting top talent. To compensate they began offering health insurance as a benefit of employment, which allowed them to bypass the wage and price controls.
Competition between employers caused most of them to begin offering insurance and employers were incentivised further when the government gave them a tax break for offering health insurance. This was not a big problem when health care was less expensive, but it removed the consumer from the process and substituted the employer, who made group decisions about which plan they would use and at what cost. Insurers began gearing their activities toward employers rather than consumers.
Governments then added to the problem at the State and Federal level by imposing numerous restrictions on providers and insurers and employers and consumers, some of which made sense and some of which did not. Also, the charity that government provides to the poor or elderly for health care often removes the consumer from the process as well, and this adds to the problem.
Group insurance lowered premiums for those who were part of a group, but raised them for the unfortunate people who had to buy individual policies. Providers marked up prices in anticipation of insurers marking them down dramatically. Providers stopped providing transparent pricing and instead hired additional office staff to figure out the maze of insurance and regulations involved.
And then, in an effort to fix all of this dysfunction, we passed the Affordable Care Act to add an entire additional level of government bureaucracy and regulation, and it made things worse.
What Does the Plan Do?
The American Health Care Plan fixes the problems while ensuring everyone is cared for. It addresses the following:
Pricing and Delivery
De-Couple Health Insurance from Employment
Eliminate any requirement for employers to provide health insurance.
Eliminate the deduction for employers who provide health insurance.
Require any employer dropping health insurance benefits to provide those benefit dollars back to the employee as compensation so the employee can buy health insurance.
Create Transparent and Uniform Pricing
Health care providers should post the pricing for their services in a transparent way and should not base pricing on the type of health insurance one has or how the bill is paid.
Providers could charge whatever they wish but would have to make that pricing clear up front, on a website or a wall They DO charge for their services now, so they DO know what their pricing is for each and every thing they do. They would just need to post that and stick to it.
Insurance companies should be required to post what they will pay for various services, the same way a provider does. The consumer would then be responsible for the difference after satisfying any deductible.
Use Government Buying Power
Although we would expect government to get out of the health insurance business like all other employers, they are still a powerful force in the healthcare marketplace as a consumer of health care services. It is entirely appropriate for government to use their buying power to drive down prices through competition.
Interstate Commerce
The Constitution specifically gives the federal government authority to regulate commerce across state lines. Congress should use that authority to open up free markets and competition between state lines and to counter the various state bureaucracies who are just engaged in cronyism. In this case the federal government would be acting to REDUCE government interference in free markets.
Lodges were originally formed as health care cooperatives, and they worked well.The lodge would “hire” a doctor to take care of the group. This brought wages down for doctors and the medical community worked with government to eventually end the practice. We need to remove restrictions on lodges and midwives and nurse practitioners and HMOs and PPOs and urgent care and cooperatives and let people see what works best.
The FDA
It takes an excessive amount of time and money to get a new drug or medical device approved. At some point there must be a cost/benefit analysis done on whether it is worth it to let people die either because a drug is not approved or the patient cannot afford it because of the regulatory cost involved with getting it approved. In the absence of any market forces, the FDA has no incentive to reduce the time or cost involved. They are acting out of an over-abundance of caution without any real driver to stop doing so.
Congress needs to provide the oversight, balance, and direction needed for the FDA to streamline their approval process.
Tort Reform
Although many bristle at the idea of tort reform, we must look at ways to avoid the frivolous lawsuits that waste so much money while still providing a legitimate mechanism for people to obtain justice when they are wronged.
Most People
Catastrophic Insurance
The purpose of insurance is to cover those unexpected and unfortunate events that one could not possibly afford otherwise. We all pay in but only a few have these unfortunate events so the price of the insurance can stay affordable.
Automobile crashes. Cancer. Heart attacks. Everyone needs an insurance policy to protect them in case these things should happen.
Deductibles and coverages could vary depending on your individual needs and how much you can afford, just like auto insurance. Most people should shop around for a catastrophic plan that meets their needs and budget and pay a monthly premium to maintain it just like auto insurance.
Regular Care
Most people should pay for routine care with cash from their pocket. Regular, routine care is not unexpected. Insurance companies are not going to lose money, so you are going to end up paying at least as much in premiums as they will to the providers.
Remember, with prices being posted and everyone using cash the prices will not be the artificial ones we have now; they will be the real ones which will be much lower and subject to competition.
Comprehensive Insurance
Nothing will prevent these plans from being sold and so anyone wanting to buy a policy that covers any variety of things may do so. Insurers will need to decide what they will offer and for how much and what they will cover and what they will pay for and how much they will pay for it. Consumers will shop around. Prices and coverages will be set by the market.
Health Savings Accounts
Most people will contribute money tax free to an HSA and will use that money to pay for their medical expenses. Money stays in the account until needed and is never lost.
Once an individual saves enough to cover the deductibles on their health insurance policy they are protected from unexpected expenses
Poor People
States
Each state is responsible for seeing to the well being of it’s citizens, and that includes their health care. Each should have a program that deals with poverty and specifically the need to provide health care for the poor
Aid should be provided in a way that does not disrupt the free market, but strengthens it. Each individual should choose and purchase their own policy, even if the money to do so comes from the State. Everyone must remain involved in the process.
Each state must regulate the process in their state for things like fraud and breach of contract and other illegal and unethical behavior.
States should provide high-risk pools and come up with other innovative ways to provide healthcare for poor people who cannot afford it on the free market themselves.
The Federal Government
One of the problems with the federal government’s health care policy is the splintered nation of it’s involvement. Medicaid and Medicare are directly involved in health care as is the VA. Numerous other social welfare programs are also involved in providing health care for the poor.
There should only be ONE program that works with States to provide health care for the poor. It doesn’t matter what we call it; it should help only the poor and there should only be one program.
Medicare and VA health care commitments should be honored, but through the new, single program. New commitments should not be made with the exception of a commitment to care for people should they become poor and cannot afford it. This is a change which will take time, but we should not be paying for health care for billionaires going forward. Honor our commitments but wind down all of the programs but one.
Fiscal Responsibility
As State and federal governments work through these things they will need to determine what kind of coverage they can provide to the needy, and in doing so they need to fund those coverages with taxes. The costs have to be borne by their citizens in a transparent way, and whatever program a state implements needs to be paid for. This will call for tough choices at the state level, just as it does at most people’s kitchen table.
Charity
Charities play a vital role in American Health Care. From churches to civic organizations to corporations Americans give an incredible amount to help lessen the burdens of their fellow man. They will continue to play a vital role.
As we transition to a new market based system and employers step back and providers and consumers work through all of the changes it will be the role of charities to make sure nobody falls through the cracks. Sometimes a bureaucrat in Washington or Jefferson City does not understand the needs at the community level; but churches and civic groups do. This is when we step up.
The Willfully Stubborn
And what of the healthy single 34 year old who skydives drunk and refuses to buy any kind of insurance? When he crashes his car are we all required to cover him after the fact? The chain smoking 400 pounder who likes his double quarter pounders and has plenty of cash but will not buy insurance because he uses that money to gamble?
Covering those people anyway will make us feel better but it will also change the entire paradigm here. It removes the incentive; it puts consequences for bad decisions on people who did not make those bad decisions.
Requiring people to have insurance creates an entirely new set of problems.
People who make this bad decision should not be given coverage after the fact; but if it ruins them financially they should still get the same care as other poor people. We should not refuse to treat someone but they should face a financial consequence for bad decisions.
Will the plan “work”? Free markets set prices very efficiently when allowed to operate properly. Removing those elements which do not allow for free markets and competition will normalize prices, which in this case will lower them dramatically. In that respect there is no question that the plan will accomplish the intended goal.
Will the plan cover all of the poor sufficiently? It will certainly allow the poor to be covered less expensively. Each state will have to decide how much they can afford to provide, given their budget and the number of poor citizens they have needing coverage.
This Plan will force choices to be made. Economics is the study of how people meet unlimited wants with limited resources. Government sometimes fails to understand that there are limited resources but people sitting around kitchen tables are painfully aware of the fact. The more we drive decision making into the hands of real people who understand their own needs the more we will have a system that works for everyone.
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