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Simple Cures, Not Central Planning

The prescription & cure for Obamacare.

While there is no certainty, it appears that a sufficiency of Supreme Court justices are skeptical of Obamacare. Starting with an uninformed assumption that the law will be deemed unconstitutional in toto and thrown out, what then? The Obama administration has no plan B. No contingency whatever should this eventuate. Simultaneously it does not appear that the Republicans or anyone else has put forth a reasonable, proactive plan either.

I have written about this before. Below I will articulate a very reasonable, realistic, pragmatic and cost-efficient plan which has at it’s very center equality. If you are an advocate of big government and central planning you will not like it. If you are an advocate of no government and every man and woman for himself or herself you will not like it. I will infer that you understand the terminology and concepts I will use. If not they are readily defined elsewhere on the Web.

Revoke the insurance industry’s antitrust exemption. There is no rational, legal, fiduciary or other reason for it to exist. Period. What devolves from this will all be good.

Fair Trade. At present the American people pay 90 to 95% of the cost of all pharmaceutical research and development and then subsidize prescription costs for the rest of the world. Canada, Europe, everywhere there is some form of socialized medicine with government caps on costs such governments purchase our pharmaceuticals for less than pennies on the dollar. For them it is a take it or leave it posture and our government permits it. Thus we pay $10 per pill for some vital new medication while Canada purchases a few million units at $.05 or less per pill and then distributes them to its population (until they ran out for the year) and resell them back to us for less than $10 per pill. Great system, what. Precisely how is this fair trade?. We must have absolute equity in this area to save billions of dollars per year. If Canada or another country does not want to pay fair market value then they can do without it. Or, we can have trade wars. We place outgoing tariffs on the pharmaceuticals and/or incoming tariffs on their imports. This would mean Beaujolais nouveau at $2000 a bottle and a cheap Louis Vuitton purse for $250,000. Get the picture?

Tort reform. Dirt simple except for the specious arguments and financial clout of the trial lawyers. Place caps on noneconomic damages and attorneys fees. Implement objective review boards–not death panels–to winnow out frivolous lawsuits. Allow those whose suits are deemed frivolous to proceed with litigation but in such cases make the attorneys and litigants responsible for all costs if they lose (As they do in Great Britain). Remove statutory protection from malpractice claims from HMOs, State hospitals, clinics and other health service providers, the Veterans Administration, etc. Make it easy to sue insurance companies foe bad faith. Equality. An absolutely level playing field. Quality of care and standard of care must be the same everyplace. Risk and reward must be the same every place. Smacks a bit of capitalism but there’s something somewhere in the Constitution and Bill of Rights about equal protection under the law. Isn’t there?

Risk Pools & Boundaries. Eliminate state lines in the sale of insurance. Prohibit the creation of artificial risk pools. At present if an individual applies for individual insurance such individual is identified as a risk pool of 1 and rated accordingly. Establish that a minimum risk pool is 250,000 people. Determine them regionally but broadly. Not by zip codes for Greenwich Connecticut, Miami Beach Florida, the South Bronx but by region; New England, mid-Atlantic, the Midwest. Within the regions randomly assign people by a formula of dates of birth and/or Social Security numbers and address. Birthdates is a particularly good way to assure that rich or poor, there is a reasonable assortment by age, income level and other variables in each risk pool. No gerrymandering is allowed. Once assigned to a risk pool it is rigid. You can’t change it suddenly by moving. You are stuck there for at least 5 years or more. No exemptions or waivers.To eliminate finagling all insurers must offer identical menus of insurance plans and then, again, 2, 3 or 4 of them are randomly assigned to these huge risk pools. Members of the pool then get to purchase the product they wish. For example: the state of New Hampshire has approximately 1,000,000 residents. If the entire state, including snowbirds were deemed a single risk pool costs would drop dramatically. By the way, for those who choose to purchase insurance everyone would be assigned the same way. This would include the president, Congress, federal employees, union members, Medicare and Medical recipients Et al. No exclusions, waivers, exemptions, deferments, special circumstances. Even roll in the medical benefits of ALL Workman’s Compensation. How about that for equality.

Medicare. Think about it. A restricted risk pool made up exclusively of elderly, retired and progressively infirm people supplemented by younger individuals with severe chronic illness and/or permanent disabilities. Indeed, until the inception of Medicare many older people had no insurance and could not afford it if it was available. They were too high risk. But, if you blend a reasonable proportion of this population across the board in a large risk pool it does not skew it substantially. Leave Medicare as it stands for those who have it–if they want to keep it–and for those who are 55 or older. But offer all the opportunity to buy into the general public risk pools with the premiums, choose from the array of policies offered, spread the risk across the entire population instead of having a working population pay the increasingly enormous shortfall in Medicare (and Medicaid) and the system will work. Conceptually this applies to any of the other high risk segregated populations; Workmen’s Compensation, disabled veterans, black lung disease and everything else.

Individual Purchase. Everyone purchases their own insurance. Given that insurance must be issued without regard to pre-existing conditions or any other factor. Let’s say that a risk pool of 250,000 people is bid out to one carrier and that a risk pool of 1 million people is bid out to 3 or 4. Everybody buys their own insurance and pays their own premium. Employers cease to purchase the insurance and make adjustments in wages. Unions cease purchase to insurance and dues and funds are returned to the members to purchase their own insurance. Self-insurance is prohibited. This eliminates all of the loopholes and shenanigans that go on with union trust funds and corporate self-insurance plans. This is not single-payer. This is not socialized. This ensures free market competition. Attempted arguments by insurers that this would complicate matters or jeopardize risk pools would be specious. All of the same individuals would be eligible for insurance and purchase their own insurance as a direct transaction with an insurance company. They would have to make independent decisions about which plan to choose and how to manage their benefits. Corporations, businesses and unions would cease to be middlemen. Benefit managers would be out of business. This is so simpleminded it has to work.

Mandate. There is no mandate to purchase insurance. Just a very strong incentive. With the above changes in place premiums become more even and manageable. Cost shifting from the private sector into Medicare, Medicaid and the uninsured are almost completely eliminated. That is a huge amount of money. But there is no mandate that one purchase insurance. There is however a statement that everyone is responsible and liable for themselves and their dependents. One can choose not to purchase insurance and pay fee-for-service as they go along. They can buy into the system whenever they want, but not retroactively. So if some dolt chooses to spend $15,000 on a motorcycle and not purchase health insurance that’s fine. If said dolt crashes and ends up with huge medical bills he’s still responsible. If he has no assets the system is stuck. However, if he has assets then they are vulnerable. A simple change in bankruptcy and estate planning laws would make everything available. No discharge through bankruptcy. No shelters in trusts, retirement plans, relatives names and all of the usual dodges we are familiar with and some of the more arcane ones that we aren’t familiar with. So the motorcycle rider faces loss of his home, retirement plan, trust fund, recreational vehicle; anything and everything he’s touched for a decade or more. If a defendant individual, the parents are fully liable. One is not forced by mandate to acquire health insurance. Yet when one looks at the new landscape which insists upon individual responsibility and liability as it offers much more affordable, guaranteed issue health insurance through the private sector things are quite likely to change. Particularly after 1 or 2 well-publicized incidents.

Management. Managed care needs to be phased out completely within 18 months and replaced by Managed Outcomes. At present in the private sector at least 30% of costs go to administration and management. These are the bean counters who count your days in the hospital, authorize your MRI, keep you on hold for an hour to get prior authorization for prescriptions, explain your benefits in incomprehensible language with terms and conditions that differ every time you ask someone at the 800 number and otherwise are obstacles to efficient cost-effective treatment and good doctor-patient relationships. On the provider side hospitals, clinics and doctors’ offices have full-time salaried and benefited staff devoted only to dealing with utilization review, prior authorizations, benefit questions and problems, and of course the largest bugaboo, billing. Billing is a mystical and devious process which has the multifaceted purpose of keeping the insurance companies’ float intact for as long as possible, trying to deny payments and benefits, fomenting friction between patients and doctors and otherwise finding creative ways not to provide or pay for what you bought. On the public side the bureaucracies of Medicare and Medi-Cal and the netherlands of Workmen’s Compensation and other multibillion-dollar quagmires administrative and management costs far outstrip benefits provided. These equal or surpass England’s pathetic National Health Service wherein for each physician there are 2 administrators and for each of those 2 administrators there are 2 more administrators and so forth and so on in an arithmetically overgrown inverted pyramid. Obamacare would make this look streamlined. If the above were all implemented, to include Managed Outcomes total administrative costs can be reduced well below 10%. That other 20% or more can go either back in your pocket or towards more and better healthcare. Keep in mind that these bureaucracies are reduplicated in every sector: every insurance company, every state, Medicare, Medi-Cal, the VA, workman’s compensation. They metastasize faster than any known tumor. However they can be readily eradicated.

Reimbursement. Nurses, physicians, paramedics, and most everyone involved in the provision of healthcare services are underpaid, not overpaid. And there is a gross inequity in many ways. Hospitals have replaced nurses with orderlies. Satellite pharmacies and blood gas labs and other services have been closed and replaced with full-time benefited salaried administrators who write policies, go to meetings, try to justify their existence, and bleed the system. The alphabet system of JACHO, NCQI and several other entities need to be dissolved into one streamlined proactive, not authoritarian system. By the by, look at your statements. Have you been hospitalized and had surgery recently. Did you notice that your physician gets paid roughly $.10 to $.25 on the dollar while the hospital gets $.90-$.95 on the dollar reimbursement. They have to pay for all those administrators. It remains very important to keep private practice vigorous and available. Family practice per se needs to be phased out in favor of internal medicine and pediatrics again but no one will ever know you better than your family doctor. This may not seem of critical importance in an abstract sense but when you or your loved one becomes critically ill and you are surrounded by highly trained, experienced and brilliant hospitalists and intensivists it remains that no one knows and understands you and your family better than your family doctor. He or she needs to be there for you and have substantive input into your care. And they should be compensated at a rate at least 10% higher than hospital based and employed physicians.

Simplicity v. Inertia--Independence v. Dependence. Efficacy. independent people and businesses prefer simplicity. Efficacy is used in medicine means efficient and effective. As a practical matter most people want things to be as simple as possible. That is not always feasible but it is almost always desirable. Government is rarely efficacious or simple. Remember, government has given us the present Tax Code, a contorted miasma that no one fully understands which is full of contradictions, exceptions, waivers, exemptions and special interest accommodations. Present Medicare and Medicaid guidelines and regulations are ludicrous. There is the ever present Postal Service. And of course, the government’s latest abomination, the TSA! Do you want your healthcare delivered, supervised, modulated, controlled and rationed by legions of IRS and TSA agents, or, your family doctor? If you sincerely prefer the 1st you really need quality psychiatric help, the likes of which are unlikely to be available under Obamacare. The 2700 page “law” which was passed by Congress people who had not even read it could never have been conceived by Rube Goldberg on LSD.

Certainly the above will be called simplistic by some. Really it is not. It is simple. Simple is anathema to government and bureaucrats. Simple is clear, transparent, obvious, and accountable. What would happen if FedEx were given complete control and authority over the United States Postal Service (with the latter’s unions out of the picture)? Pretty simple. Entities invested in the continued dysfunction of the system would be enraged, disempowered and eventually unemployed. And no doubt would file a bunch of lawsuits. Remember, regardless of distorted and dishonest news reporting simple flat tax proposals or simple to tier tax proposals, the kind which are readily understood by the average person on the street are not resisted by that average person on the street. By gosh, they are sensible. Opposition to a simple tax code comes from government, the IRS (most of which would be rendered redundant and unnecessary), banks, insurance companies, financial institutions, and wealthy people who use the tax codes to shelter, maintain and build wealth as they avoid taxes. In truth some of the institutional support for Obamacare was coerced by threat of government regulation and interference with pharmaceutical companies and insurance companies, hospitals and the like, but it was a coercion that was simultaneously seductive because it gave them goodies and in many ways maintained a status quo that they understand and that justifies their present iteration and existence.

Cogitate about the above if you will and compare it to the 2700 page ACA. This can be fleshed out in careful, methodical, fair and efficacious detail in less than 270 pages, sans any loopholes, exemptions, exceptions, waivers, and other built in tricks. Remember if you will, or ask someone older to explain the “simplicity” of the Selective Service System during the time of the Vietnam War. It was unfair, discriminatory, and readily manipulated by money, influence, race, class and status. Obamacare already has more waivers and exemptions to special interests than one can count. So if you think the above is ridiculous I'm sure you would enjoy healthcare in Great Britain. Please spare me and do not write a bunch of obnoxious comments. If you think the above has merit please forward it to your Senators and Congressmen with the question, “what part of simple don’t you understand”?