Friday, June 12, 2009

What COULD Be Done to Fix Health Care?

(This follows from the previous blog.)

So what COULD be done in a reasonable way to solve the health care problem?

Without benefit of Larry Summers’ team or the leftover staff of the Clinton Health care folks, here is my alternative plan:

First, I would have the NIH or some new agency collect the various coverage mandates from all 50 states and come up with a Recommended Homologated Minimum Coverage Plan. The Plan would not be Cadillac coverage, but would have a heavy emphasis on prevention and some limits on coverage for chronic conditions. It would be intended as a safety net under the system, not as a choice plan for those who have more money to spend. This is within the constitutional power of the Federal government. States will be free to adopt or not adopt this standard plan. Most will adopt it, because it will be politically expedient. Small employers and those without insurance will demand it.

Second, I would ask the top ten health insurance providers to offer an All States Plan as per this standard. This Standard Plan would then be portable across all states. Today you have to sign up for a different plan in every state, losing your coverage and your deductible each time you cross a state line.

Third, I would have each of the insurers who offer such an All States Standard Plan to give up their underwriting on these plans in favor of a guarantee from the Federal government to the insurance company to cover any losses for existing conditions on the actuarial costs involved. This guarantee would be in the form of a contract between the relevant Federal agency and the insurance company. No one could be refused for pre-existing conditions.

I would require all employers over ten people to have a plan, even if it only the Standard plan. I would encourage, if it needed encouragement, every qualified insurer to offer extension plans, as they do now for Medicare part B. There is no reason why people who desire a premium plan and can afford it to be denied such a plan. That is Capitalism. I would maintain the deductibility of the Standard plan to all employers, and consider the excess benefits of premium plans as taxable income to the employee. Furthermore, the self-employed or those employed in small companies would also have the benefits of the tax deduction for the Standard Plan through their own individual tax return if it was not provided by their employer.

Moving to the broken parts of the system:

An estimated 30% of current health care costs are liability insurance for hospitals and practitioners, tort awards and the precautions drug and device manufacturers must take against tort awards. A surgeon pays as much as $120,000 per year for malpractice insurance. Hospitals order excessive tests and have extensive liability reviews to avoid being sued.

On drugs, the Courts have ruled that even though a drug is extensively tested for efficacy and safety, the manufacturer can still be sued for things they did not even suspect, in spite of the preponderance of good the drug may do. This has a chilling effect on new drugs and has caused drug testing to escalate to the billion dollar range. I would propose a transparency vs claims standard for drug law suits. I suggest the FDA can require a pharmaceutical company to publicly file its entire testing protocol and and all the results, and then to put the entire list of results and side effects on the label, or on a site accessible to the public, in plain language. This makes an implied contract between the manufacturer and the patient. If the patient suffers symptoms that were revealed and known as a possible side effect, there can be no liability to the manufacturer. It is up to the patient and his/her doctor to make the decision on the risk and the rewards of the treatment with all the data at hand. If, on the other hand, a court can show that a side effect was discovered, or should have been discovered, in the testing process, but was not disclosed, the pharmaceutical company is liable. That keeps the drug companies honest and the nuisance suits out of the courts.

Since medicine is beyond the competence of the average consumer, I would encourage a new profession - the medical counselor, and provide fees for that service in the Standard Plan. This person is an educator and advisor who will counsel patients on their alternatives and risks using information provided by their doctors and the drug companies. This will serve as a double check on hasty and erroneous procedures and further empower the consumer to budget and negotiate costs. The competence and independence of these counselors must be protected and audited. This function is the missing link between the consumer and the provider in today's health care setup. There can be no informed market response without informed consumers.

The efficient exchange of medical information between the doctors, nurses, hospitals, pharmacists, counselors and specialists should certainly be expedited by a good system that encompasses digital graphics standards for X-rays and tomography as well as prescriptions, insurance coverages and laboratory reports. Such systems exist now in the best hospitals, but there are no standards to interchange data among them. Right now the emphasis is on billing, billing and billing, and it is a nightmare. If doctors could solve the billing problem there would be a 25% increase in the time they could spend with patients and a significant reduction in their admin staff. I suggest a billing outsource service powerful enough to force insurers to cut through their egregious billing practices in favor of a rational approach that they all could use.

Te White House report had an economic goal to reduce the growth of health expense in the US by 1.5% per year. I believe the above plan meets that modest goal without a Constitutional amendment, without creating a new Juggernaut public entitlement and without the oversight of Big Brother and his evil companion, the Tax Collector.

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