A Brief History…

UPDATE: A bulletin from the NHS on how well single payer medicine works. IN France, the hospitals are described as spotless but patients there have free choice and competition.

A year ago, I wrote several posts on what I considered a useful model for reform of the US system. The present debate seems to be focused on everything but a viable model for reform. The Obama/Baucus plan that is slowly emerging from the Senate finance committee seems to be vague and there are aspects that seem to represent politics and nothing else. The “white paper” seems to be mostly propaganda and lacking in concrete proposals. It does point out that France spends about half of what we do on health care (page 15 chart)/ per capita with excellent results. Baucus’s “vision” continues the usual blather about providing everyone care at less cost.

It contains six “elements” that typically lack focus.

1. Individual Responsibility. Covering all Americans means the enrollment of every individual in some form of health care plan, private or public.

OK, I agree with that.

2 Strengthening the Employer-Based System. We must ensure the continued viability of the employer-based system — the principal source of health coverage
for most Americans — to allow workers to keep the insurance that they currently
have and value.

This is bogus. One of our problems is the employer-based system but, for Democrats, this means exempting union plans from any controls on utilization.

3. Guaranteed Access to Affordable Coverage for Individuals and Small
Business.

This is the entire problem misrepresented as a factor. It is THE PROBLEM !

Here Baucus comes up with one concrete proposal.

the Health Insurance Exchange — will connect individuals and employers to insurance offered at local, state, regional, or national levels. Insurers offering coverage through the Exchange would need to meet certain requirements established by a new Independent Health Coverage Council.

This is basically what the Clinton Plan was about. It is too vague to even know what they are talking about. Presumably this is the “co-op” concept we have heard about.

4. Strengthening Public Programs. Existing public programs represent an effective and efficient way to increase access to coverage and decrease the number of
uninsured.

The existing public programs are certainly not efficient and Medicare is losing doctors at a rapid pace as they try to cut the budget by stiffing providers. Medicare will be out of funds in less than 10 years.

Offering individuals approaching age 65 the chance to buy into Medicare early and eliminating the requirement that disabled individuals wait two years to enroll in Medicare would ensure coverage to populations that the private market is under-serving.

These statements represent a big reason why Medicare is bankrupt. Adding beneficiaries without new funding is a terrible way to do business.

5. Focusing on Prevention and Wellness. Increased access to preventive care and wellness is another step that could be accomplished in the short term.

This is an old canard that has been proven to be ineffective in controlling costs. Early diagnosis in breast cancer will improve survival but whether it saves money is another matter.

Increasing the availability and effectiveness of primary care coverage could create a national
focus on maintaining wellness, rather than treating illness — which would improve
quality and reduce costs across the health care system.

This is utter bullshit but sounds good. The fatal flaw in the Canadian system is the emphasis on primary care with severe rationing of specialist care. Politics goes for the visible benefit and the long term benefit often is ignored.

6. Addressing Health Disparities. In our current health care system, racial and ethnic minorities disproportionately lack ready access to high-quality medical care.

This is standard political speech but means little. The urban underclass is the source of our poor life expectancy and child mortality figures but to expect that these people will take advantage of better access to care is naive and is the usual political pablum offered to rube voters.

None of this suggests that a useful plan will emerge from this committee.

My suggestions, which will go nowhere but which are based on 40 years of practice plus a graduate degree in health economics, are as follows.

1. The employment connection with health insurance must be broken. This can be done by forming large funds, like pension funds, to which employees can transfer their insurance plans. The Employer should be happy to do this as the plans will then be funded by payroll deduction, as they are now. The employer will no longer be expected to manage the plan. The same insurance company ASO (Administrative Service Organizations) that manages the employer plan can submit bids to manage the new funds. If the employee loses his job or changes jobs, the health plan remains the same.

2. Like in France and in Medicare, the fund will pay 80% of the approved charges for approved procedures and services. This will not be the total payment as co-pays and balance billing will be added. It does provide catastrophic insurance, which is what insurance should be.

3. Private insurance plans, chosen by the individuals, will contract with funds and the individuals to cover the remaining 20%. The same companies that provide “MediGap” insurance for Medicare beneficiaries could enter this market. For the poor, government subsidies can fill this gap.

4. The insurance funds will pay on a national fee schedule, which will be negotiated with provider organizations like hospital associations and medical associations. This fee schedule will resemble the indemnity-style health plans that were still around when I began practice. This pays a flat fee for each service. “Usual, customary and reasonable” fee payments have led to fee inflation and moral hazard. The flat fee will be on the low side but no lower than Medicare fees and without the hassle. The doctor can negotiate a higher fee with the patient and fees should be posted in the office. This is the only way we will ever get a market in medicine. The greatest benefit of such a system will be the open disclosure of charges. Only when prices are known can we have a market.

5. Balance billing, the charging of an agreed upon fee over and above the insurance payment will be permitted. If someone wants to see the best surgeon or internist in town, they will be expected to pay accordingly.

6. Patients will be expected to pay doctors for services at the time of service and they may seek reimbursement from the plan for covered services. This is why posted charges are important. France has a program where very large bills need not be paid first. The out-of-pocket payment can be capped.

7. Community clinics and HMOs will be permitted to do business as they do now with the insurance fund negotiating a rate of payment for coverage. The subscriber may be expected to pay extra for services not covered by the plan.

8. Drugs will be covered but co-payments will be expected for non-generic drugs. This will be far less expensive for younger patients but Medicare Part D has cost much less than expected.

9. Payments from the plan will be limited to services accepted as scientifically valid by evidence-based medical guidelines or other scientifically based guidelines.

10. A program to forgive medical student loans in return for adhering to the national fee schedule will be developed and extended to future medical students. Eventually, this should result in very low medical school tuition.

11. Ideally, Medicare, Medicaid and workers compensation should be brought under the fee schedule and the program of management of the health plans.

Tags: health care reform, Medicare

This entry was posted on Thursday, July 2nd, 2009 at 2:13 pm and is filed under health reform. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.