The goal of the Protective HealthCare Act, PHA, is to medically insure everyone without raising personal taxes and at the same time lowering the cost curve closer to what is seen in other free nations. We currently spend 18 percent of our Gross Domestic Product on Healthcare and that figure is increasing every year. Other countries spend about 10 percent and there is no credible data supporting the idea that our healthcare is any better than other countries for a majority of Americans. (Read my earlier blogs on the cost of healthcare in the United States as compared to other free nations.) http://bit.ly/2j18EMA
Currently Medicare sets prices for everything in medicine like charges for exams, labs, procedures, tests, etc. Most private insurances follow Medicare rates. In the PHA healthcare providers and institutions would follow Medicare rates. (Note – Medicare is the biggest buyer of medications yet it does not have the ability to negotiate pricing. We pay 3 times more for medicines than other countries.)
Currently we have Health Savings Accounts HSAs. HSAs allow patients to put money into a tax-free account that can be used for medical services. You are allowed to set aside a maximum 3,400 dollars per individual per year. I believe that we should expand the program.
HSAs should have no cap, roll over from year to year, be used by the person to pay another persons healthcare bills if they want, and finally any money not used could be willed to another person tax free at the time of death. We always say to people to save for a rainy day this would encourage them to do so. Also if you have a sick parent, friend, family member, and they need medical care you can use these funds. I also believe that the elderly may see the end of life care differently if they know money not spent could be used by a future generation. I would also broaden the uses of HSAs to include assisted living facilities, hospice, and other medical related expenses not covered. Every person would carry around an HSA debit card. The card could be handled by a private company or the government for a prearranged fee agreed upon by the patient. (Think competition with different credit card companies.)
The HSA card would allow patients to have freedom of choice in doctors, hospitals, and services. But it would turn patients into true consumers of healthcare. It would also force private insurance to compete for a patient’s hard earned money. Patients will have the freedom to put money into their HSA instead of paying premiums. The insurance companies will now have to offer plans that are more competitive and offer more.
We need to make patients more accountable for knowing and evaluating the cost of care. I know patients that spend more time researching what hair shampoo to use than the time to pick a doctor. I believe that there are several reasons for this lack of accountability for basic consumer research. First if you have a insurance plan whether it government run or through insurance that is going to pay the bill there is no incentive to discriminate where to go and how much it costs. It has been amazing to me that when insurance companies began instituting copays and deductibles that patients began asking questions on how much procedures and tests costs. We also would have discussions with patients on the different prices of surgery at the various facility fees. This showed me that when the patient has some skin in the game they become more price conscious. When a patient does not have to pay for healthcare – price does not matter. If you know that you will not be paying a medical bill it becomes easy to go in to the Emergency Room for a routine problem rather than book an appointment at a doctor’s office.
Another reason that patients have not become educated consumers of healthcare is that their insurances limit the providers that they can use. If you want to decrease the cost curve of healthcare you have to have open competition. If you are only allowed to use Hospital A then they can charge whatever they want to charge for an MRI. If you allow the patient to choose where they complete an MRI then they are going to find the most cost effective place to complete their scan. Now Hospital A knows that they will be competing with the market so they will have to be more efficient and price competitive.
Cost competition will usher in an era of cost transparency in the market. Already we see apps that show patients the different pricing for procedures at different facilities.
What will you do for patients below the poverty line that need medical care. If we are going to cover everyone then we have to have a safety net for the poor. The current system of giving them a Medicaid insurance card is not working. We tell them that they have healthcare with this card but the number of hospitals and providers that accept Medicaid patients is dwindling because care cannot be provided to this patient population under the current reimbursement structure and increased bureaucracy. For example, when I see a TennCare (Medicaid) patient and I have to refer them to another specialist we can’t find any that are taking these patients. We have to send patients hours away and they are put on a long wait list to be seen. How do we solve this problem and provide healthcare to the less fortunate without going further into debt?
Instead of pouring money into a broken system the government subsidizes the HSA debit card for the poor while they are in need. We give food stamps to the poor but we don’t give them healthcare stamps. We don’t give people an unlimited amount of money for their EBT card (food stamps) every month. If we didn’t give food stamps but instead gave people a food card that they could take to the grocery stores to receive food for a fraction of what it is worth then eventually no grocery store would accept it. The same idea works here. Put money into their HSA. It is not an unlimited amount of money but a set amount per person per month. You can cap the amount that would be spent on Medicaid each year. We must stop borrowing money to continue to meet the demands of Medicaid. We now have 75 million people on Medicaid. What is the impetus for people not to receive Medicaid? Now that you have a finite number per month that can accrue over time you will have to go shopping just like if they were to shop for groceries. If they know that going to the ER for a regular medical problem will be more expensive than going to a walk in clinic they will go to the clinic especially if their HSA is running low. We would save money in the system because you eliminate a whole layer of administration in the clinic trying to collect these bills. If they need a procedure that is above the amount that they have in their HSA they can save up for the procedure, have relatives chip in with their HSA cards or pay out of pocket. If it is an emergency surgery and they do not have any other alternatives then their future HSA payments will go to paying down the debt. This allows us to budget for Medicare and cap our expenses in this program. (This would also help with the problem of small local hospitals going bankrupt because of the EMTALA law that is forcing them to provide care to patients that will never pay for their care. More on that later.)
Most healthcare bills never deal with Tort Reform because it can kill the legislation right from the start. But I think if you look at all other countries they have an answer to medical malpractice because they understand that without some plan in place their system can be saddled with expenditures that increase the overall cost of healthcare due to the practice of defensive medicine and higher premiums. In the House Republicans Better Way proposal they noted that tort reform could save the health care system 300 billion annually. I believe if a patient has suffered malpractice that they should have an avenue to sue for pain, suffering, and future medical bills.
Louisiana has a policy for patients to seek damages for malpractice. Their system tries to cut out frivolous lawsuits that increase the expense of carrying malpractice due to all the time and money utilized to have the case go through the system only to be thrown out later. Not to mention the stress that it adds to the already difficult job of providing healthcare. I believe that their system can be implemented in a federal healthcare system. Here are some of the details.
All malpractice cases must go in front of a three-person medical review board assembled to determine whether there is merit to a patient’s complaint. The panel is staffed with physicians who have expertise in the specialty in question. The panel decides if the case has merit. Their decision is not binding but can be used in court if the case is pursued further.
The winning party pays the cost to have the case in front of the panel.
There is a Louisiana Compensation Fund to compensate patients for suffered loss, damages, and expenses because of medical malpractice for a healthcare provider enrolled in the fund. It generates revenue by charging providers, hospitals, nursing homes, chiropractors, optometrists, dentists, oral surgeons, and nurses. In a national program I would make all healthcare providers and hospitals participate in a National Compensation Fund. The Money would not be considered Federal Property so it could not be used in a Federal budget crisis.
Damages are capped at 500,000 with the ability to receive unlimited coverage for future medical expenses.
I believe that if lawyers and patients understand that there is no grand windfall to a lawsuit then it would drive the number of frivolous complaints down. In the current system many malpractice providers are settling cases that may not be malpractice because it is cheaper for them to settle than spend the money on a long protracted case. It would be much easier to settle a case if a panel of experts decide that a case has merit. The physician can deal with the decision, the patient can know that justice has been served, and the costs to the system are limited.
We would not eliminate private insurance or the ability to self-pay for any procedure or doctor. If employers want to add a benefit to their plan they could use a private insurer to supplement any costs. Or they can pay their employees more for them to put more money in their personal HSA. Or they can pay directly into the employees HSA.
Everyone will be required to watch an end of life and Advance Directives educational video online and choose an option. They also have the freedom to use HSA money to pay a lawyer to write their own personalized Advance Directives. They will have to complete this documentation before they can begin using their HSA card because they will have to name the beneficiary of their HSA card accrued money. These documents will be stored as part of their Electronic Medical Records. (As technology improves and the system is adopted patients will each have their own personal health records that will be updated in real time.)
The United States currently pays more for drugs than any other country. We spend 40 percent more than Canada for the same medications including generics. Canada controls price through government regulation of pricing. Currently Medicare the nation’s largest buyer of drugs is barred from negogiating drug prices. That is not a free market approach. We can’t dictate pricing but we should have a Medicare panel that can negotiate pricing. The pharmacuetical companies have the right to not sell us the drugs if they do not find that it will make them a profit. But our country should not be subsidizing drug prices around the world. (The current administration has backed a plan that will help create more competition in the generic drug space. That will help.) What to do about the high cost of new drugs? A drug company has a blockbuster drug that no one else has and they can charge a higher fee to recoup research and development investment and make a profit. This high cost is a problem in our country and in other countries with Universal Healthcare. A free market approach would be a global fund that purchases this drug and is allowed to sell to the world. They can negotiate a cheaper price because of the high volume purchase. If the drug is approved in the states then Medicare, Pharmacies and Insurance plans can negotiate with the global fund. The Pharmacuetical Company makes their profit encouraging them to continue research. The lower costs of these newer drugs put them more in the reach of Medicaid patients. They will have to save their HSA Medicaid money and solicit others for their HSA money to help pay for their medications. I have found that people are willing to help. With the expansion of the HSA program you have now made it easier for people to help when needed. (Currently some states are suing big pharma to gain Medicaid patients access to expensive drugs. In Washington state a suit was won by plaintiffs forcing Medicaid to provide an 84,000 drug treatment for Hepatitis C. This raised the state’s Medicaid budget from 24million in 2015 to 222million. You can see why this issue needs to be dealt with now and can’t be put off any longer.)
The elephant in the room is what to do with all of the illegal immigrants that are living in America. Currently many of these patients will show up in our Emergency Rooms when things get so bad that they have no other place to go. They go to the ER because with the Emergency Medical Treatment and Labor Act, EMTALA, they have to be treated regardless of the ability to pay or insurance status. Many times these bills go unpaid putting financial pressure on the hospitals and medical staff. (It has led to hospital closures throughout the state especially in small towns.) This is a waste of resources and health care dollars. If you are fiscally responsible you have to deal with the problem and stop pretending that it does not exist. We often think of only the group that may cross the border but what about the group that has overstayed their Visa. We need to have a comprehensive program that also includes securing our borders not only by land but deals with the people who come here for a visit and stay for a lifetime illegally (this is currently the number one pathway for illegal immigrants). We need to halt chain migration, temporary protected status if there is no immediate threat, and the diversity lottery until we fix this problem. (Legal Immigration should be based on skills and merit.) We are 20 trillion dollars in debt and borrowing 600 billion dollars a year and all programs need to be re-evaluate. We need to have all of the undocumented people living in this country come out of the shadows and register. This is not only a healthcare financial crisis but a homeland security crisis. Failure to register in a timely manner will lead to immediate deportation. Once registered we can have accurate data on the impact and contribution of this group and make informed decisions on what to do as a country with this problem.
I know that you will have specific questions about the program. I can deal with those one by one. But as I have stated in previous blogs the federal government is responsible for 40% of our health care dollars when you look at Medicare, Medicaid, VA system, Disability, Grants to name a few. The reality is that a Federal Plan is necessary and a State by State plan is not feasible. This is the most free market approach to the problems facing our healthcare system.