10 replies to this topic

[OEXCHAOS]

A Much More Modest Health Care Reform Proposal

I have been struggling to come to grips with why our health care system is so expensive and inefficient. The free market provides so much for generally lower and lower cost, except when it comes to health care. I just couldn't figure it out.

Then I had an epiphany:

I've been attempting to apply a free market model to a health insurance/health care system that only pretends to be a free market.

In a free market for say, automobile insurance and maintenance, you either buy comprehensive coverage or you don't. If you do and you have an accident, you'll get your car fixed. If you don't, you're walking. You take the risks and you pay the costs. We're OK with that. Folks shouldn't get stuff that they don't pay for.

In our health care/health insurance model, however, we simply CAN'T operate that way. It would be "fair" if those who didn't pay for health insurance wouldn't get health care, but the consequences of that are too often death. As a practical matter, the vast majority of human beings are far too compassionate to simply let people die. More importantly, as a philosophical matter, LIFE trumps fairness. The whole point of a free market is so that we can LIVE as moral creatures of reason. It is simply irrational to ignore the permanent cost to humanity due to unnecessary death.

So, not only are "we" going to provide health care (as we do) for folks, but we should. This takes health insurance away from the optional "comprehensive auto insurance" model and toward the mandatory "liability/financial responsibility auto insurance" model. Just as we reasonably require folks to be responsible for any damage that they may cause to others while driving, it seems to me that we can properly require individuals be responsible for their health care.

Note: I'm not saying that we should provide health care for folks. I'm saying that we should require that folks be RESPONSIBLE for their health care. This is a distinction with meaning. The lack of a direct connection between individuals and the provision of their health care is what got us into this mess in the first place.

Health care is not a right. It's a responsibility. You have a responsibility for making provisions for your own health care. If you don't, somebody else is going to do it for you, to one degree or another. That's simply the way it is. Rational people don't sit by and let folks die in the gutter because they can't afford an anti-biotic. It's not a legitimate choice to not provide for your own health care. Such forces good people to take care of you at their expense.

So, since we know that either hospitals, doctors, insurance companies, and/or government is going to pick up the tab for the uninsured, we need to find a way to make the uninsured responsible. I propose that EVERYONE be required to have a large deductible health insurance policy AND a Medical Savings Account (MSA). Now, normally any good capitalist is going to be opposed to compulsory mandates, but since my health insurance costs are my obligation anyway, and if others don't pay their costs they're going to be imposed upon me anyway, this is the only way for the responsible to be protected from the irresponsible.

While we're dramatically expanding the pool of insureds, we ought to preclude insurance companies from dropping folks or excluding pre-existing conditions. If everyone is to be insured, we don't need to worry about free-riders and we certainly don't need insurance companies fattening profits by weaseling out of providing coverage. To be sure, we should let insurance companies risk-rate behaviors, like smoking, obesity, motorcycling, and the like. After all, such behaviors impose costs, but excluding health conditions is just silly and contrary to the whole point of insurance. (some of these ideas have already been put forth and embraced by John Mackey of Whole Foods http://online.wsj.co...0072865070.html , but I don't think he addressed all of the real benefits).

The MSA part is key here. We've all got a responsibility to control health care costs. We've been abdicating that responsibility to government, which blithely pays 18%+ in fraudulent Medicare claims, and to insurance companies which try to control their costs, but only raise doctors costs and annoy their clients. We need to change that and the only way to do it is to put folks back in charge of deciding what they're going to pay for and making sure it's fair and honest.

Can you imagine what would happen if some outfit tried to charge Grandma $40 for aspirin that she never even received? Can you imagine her cutting a check out of her MSA? I can see that 18% Medicare fraud disappearing overnight. I can see costs being examined that haven't been looked at by patients and their families before, too. I can imagine that trivial colds that used to send folks to the doctor for antibiotics might go away on their own in a couple days.

From what I've heard, folks who have MSA's are quite satisfied with them. These seem serve folks well, gives them choice and control over many expenses. They definitely help cut costs. We should make sure EVERYONE pays attention, gets involved, and gets more for their money.

So, what about poor folks? It makes no sense (in the context of reform) to give poor folks "free coverage". All that does is increase demand, when they're already big consumers of health care. The poor are not children. They don't need the mommy state to absolve them of their health care responsibilities and just pick everything up. Rather than letting costs get shifted to hospitals (which pass them on) or to the taxpayer without any accountability, or just picking up all expenses, the government can fairly cheaply fund the MSA's for the poorest of us, as well as the high deductible insurance. As incomes rise, a portion of one's income (or taxes) will can fund the MSA's and insurance.

Now, one might assert that the poor aren't equipped to make sound health care decisions with their MSA's. Now, putting aside the fact that such is demeaning, it seems extremely likely that arming millions of Americans with MSA's is going to beget an army of cheap "first line" health service providers--everything from Walmart to GP/Family Doc boutiques. Why not? No insurance companies or government bureaucrats to deal with, and lots of simple problems to fix for paying patients. These first line health care professionals are not likely to fail to refer seriously ill folks up the line. So, there's a very good likelihood that the poor would receive BETTER health care AND conserve precious resources.

So, with a few tweaks (perhaps including insurance portability and the elimination of state-by-state regulation) that bring about universal high deductible coverage, we're going to increase the risk pool and decrease average individual costs of insurance, and increase real competition, allowing for more customer satisfaction. Also, if insurance companies don't have to spend so much money and effort ducking risk, there's likely to be some significant savings there--then, if they want to squeeze more net return from their customers, they might focus on helping people stay healthier longer. Add in MSA's, and we put patients back in the position of being responsible consumers doing their part for cost control, instead of being passive recipients of whatever services at undisclosed and un negotiated cost. So, we get price discipline, more choices, more accountability from all stake holders, less fraud and waste, and much less bureaucracy.

The above has to be better than a nationalized health care plan, given that the federal government has a bankrupt Medicare and Social Security system already and can't even deliver mail with a monopoly without losing money.

[Rogerdodger]

Finally somebody who is thoughtful! How refreshing.

I always hated helmet laws...
Until I saw my sister-in-law celebrate her 30th birthday in a nursing home.
Nearly 20 years ago, she was in a motorcycle accident with no helmet and no insurance.

BUT SHE HAD THE BEST HEALTH CARE IN THE WORLD!
You and I paid for her brain surgeon, weeks in intensive care in a coma, months in a rehab center @ $600 per day, years in an apartment for disabled and now we pay for her daily living expenses thru SSI.

We have also paid for her 3 or 4 cancer surgeries, and several rounds of chemotherapy for the past 7 years.
But she lives a good life, has an apartment and an old clunker she drives around town and right now is out with my wife getting a new hair-do.

It seems that we must walk a fine line between the libertarian and the collectivist.
The answers are indeed difficult.

But under the proposed health care plans, she would have been a budget item, perhaps too expensive to "save".

The mandatory MSA, like mandatory Social Security, is the best idea. IMHO
It makes the consumer conscious of cost.
That alone would save a fortune.
I've had an MSA.
I found that you can get a $2,500 colonoscopy for $600 just by shopping around!

The problem is that the "Lock Box" is protected by politicians.

PS: My sister-in-law just got back from the salon and looks wonderful with her new "do".

Edited by Rogerdodger, 03 September 2009 - 07:20 PM.

[mss]

The one other big cost is Doctors, hospitals insurance premiums. There is a limit to what an error is worth. A lost leg is not worth $50,000,000. A smashed finger nail by a hospital room door is not worth $10,000 plus medical cost. REAL settlements I know about. Lawyers and torte limits must be addressed. Excellent post you have outlined for reform. mss

[OEXCHAOS]

Tort reform may or may not save a lot. I suspect that you could do a lot by simply having jury requirements, like 50% with an economics degree and 50% with some medical training (nurse, medic, ems, doc). One suspects that crazy awards would go down, but proper punative awards might well increase. Maybe settlements would decrease, but that's a tough guess. Thanks for the feedback, guys. I had a feeling I was onto something when my friends were more interested in my philosophy than in the proposals.

[Rogerdodger]

The poor are not children. They don't need the mommy state to absolve them of their health care responsibilities and just pick everything up.

I believe in the "tough love" and individual responsibility approach to life.
And yet I know that there is a considerably large group who will never live responsibly.
That group is a problem.
Darwin had a simple solution for them.

But we are too "compassionate" and feel the need to "help" them.
(Although I could argue that government "help" is often actually destructive, especially when it removes incentives for responsibility.)
The MSA idea could help with that issue in that they might actually see some reward for their responsible actions.

And for those who understand the concept of "codependency", you understand that often the "helpers" do not want the needy to become independent and responsible.
It would destroy the "helpers" feelings of superiority, to which they are addicted.
But that's a whole other problem.

And probably why the idea of individual Medical Savings Accounts was not included in the House Bill.

Edited by Rogerdodger, 04 September 2009 - 10:58 AM.

[Rogerdodger]

Pre-condition disqualification?
Too poor to pay for Health insurance?
Here's a very simple way to help the few million in this situation:
Lower the Medicade requirements immediately.

Health insurance too high for the self-employed?
Make it tax deductible immediately.

The fact that these options, along with MSAs are not being considered tells me that this debate is not about solutions but about government control for the sole purpose of politicians getting their share of 1/6th of our economy.

[colion]

One thing that increases costs, as well as prevents one from shopping for policies nationwide, are individual state mandates for policies which jack the cost up. Some mandates are small change like paying for toupees but others such as in vitro fertilization and coverage of the birth mother in an adoption can add big bucks to a policy. How much do these items increase premiums? Don't know but suspect that like pork in bills passed by Congress they probably add up to something substantial.

[Rogerdodger]

individual state mandates for policies which jack the cost up.

Yes that is a big problem.
Why not let me choose my options?
I won't need maternity care, or a sex change, so why should I pay for such coverage?
But maybe a toupee would be nice.
And how much extra would I have to pay for Viagra?
Let me decide if I want it and how much I'm willing to pay for it.

I have lots of options on my car insurance such as glass coverage or towing and I can choose my deductible (which is simply the amount I'm willing to self-insure for.)
Geico sends me a mailing all the time telling me how much I can save.
Even a caveman can figure it out.

But another point:
The healthy do not need health care.
The sick do.
Obviously if one's premiums were based on actuarial type tables, cost of coverage could be inexpensive for the young and healthy but prohibitive for someone advanced in age or with a pre-existing serious condition.
The only solution to those situations seem to be collectivist.
IE: Those who are healthy must pay higher premiums to pay for those who are dependent on expensive health care.
But collectivism always results in the empowerment of a minority of individuals and oppression, and in the end, as Ayn Rand noted, "horrors which no man would dare consider for his own selfish sake are perpetrated with a clear conscience by altruists who justify themselves by the common good."

Last year, the UK had nearly 4,000 women giving birth in hallways, elevators and bathrooms:
The babies born in hospital corridors: Bed shortage

France watched 15,000 elderly die during one summer heat wave.
So the collectivist way has it's own deadly shortcomings.
Oh well, now we can get their stuff.

Edited by Rogerdodger, 08 September 2009 - 12:02 AM.

[OEXCHAOS]

I think it's important to remember that health insurance doesn't really exist for a point in time. It's SUPPOSED to be exist for you in a continuum. You aren't likely to need health insurance at 21, but it's guaranteed that you're going to need it by 80. The whole point is to minimize the disastrous nature of big health care expenses by spreading the risk aver large numbers of folks over long periods of time. So, major coverage really needs to be as close to universal as possible. The other stuff? Well, that's what the MSA is for, right? For the most part.

[Rogerdodger]

So that would spell out something like the Social Security system.

That's encouraging.

How's that lock box working?

Google social security bankrupt, get about 5,170,000 references such as:
Such as:

Social Security Bankrupt in 2010?

Apr 15, 2009 ... Social Security always was doomed. Eventually the number of retirees would bankrupt the system. They have known that since the first day the ...

So really, what we are talking about is the government once again forcing citizens to save for the future.
That's great except that the government will have access to the money.
Our only hope is that they can run it as successfully as they did Freddie Mac and Fannie Mae!

"Sep 10, 2008 ... "These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank"

Edited by Rogerdodger, 08 September 2009 - 10:08 AM.