The fact that we spend more than 15% of our GDP for healthcare is unacceptable. Medical insurance no longer functions like insurance. Insurance is also not medical care. These interrelated fundamental disconnects have caused our problem.
You’d be hard pressed to find someone saying that our system is fine, that it doesn’t need reform. We need reform. If you don’t think we do, you live under a rock.
Other types of insurance are not allowed to decide an event is covered, then retroactively deny payment and take the money back. Medicare and insurance companies also don’t pay for the entire event covered in question. For example, if an x-ray really costs $100, and an insurance company only pays 50%, then $200 must be charged in hopes of getting full reimbursement as much as the insurer will tolerate. If it isn’t tolerated, the provider has to charge everyone else more money.
If car insurance functioned like medical insurance, you would have to be in the same risk pool as someone with five DUIs, vehicular manslaughter on his driving record and a monster truck attached to a wrecking ball. On top of that, the guy with the monster truck would be guaranteed renewable, portable coverage. Because insurers must take such a risk, you the customer must share it and pay higher premiums.
Small and medium sized insurers especially get in trouble for breach of contract and fraud. Under our current system, the rights of some happen to be more unequal than others.
Other types of insurance are not forced to cover the most expensive and exotic treatments available. For example, if homeowner’s insurance had to cover lawn ornaments, mowing the lawn and painting fences, it too would be unaffordable. Insurance is meant for catastrophic events.
Government involvement impacts the private sector more than most think. There are no grounds to call our healthcare system “free-market”. The biggest transition of government into what was left of the free market came with Medicare under President Johnson, which at first paid reasonable prices. The second biggest transition came with the HMO Act of 1973 under President Nixon, which left in place the old flaws and effectively tied healthcare to employers.
Government created problems in healthcare include:
1) Inconsistent quality (odds of you getting certain procedures vary by location)
2) Paperwork costs
3) Restriction of choices that doctors and patients can make
4) Dominance of insurance and pharmaceutical companies
6) Price inflation
7) Interference with price discovery
8) Misallocation of resources
9) Actuarial malfunction
10) Artificial shortage of providers
11) Lack of competition
12) Reimbursement rates change depending on where you are
13) Prices change depending on who is reimbursing the provider
14) Artificially small pools/insurance tied to employers
Solutions must be implemented on the state and federal level according to constitutional restrictions. You’ll see where laws are required in parentheses before each solution. Solutions must include–
(Federal law if transaction across state lines/State law) Pharmaceutical published price lists. If you buy a drug, you should know how much it costs in advance. That price should not magically change based on who insures you.
(Federal law) Let’s have actual free trade when it comes to pharmaceuticals instead of banning imports. While we’re at it, we should scrap GATT, CAFTA, NAFTA and our involvement in the World Trade Organization so we can have the jobs to pay for healthcare.
(State law) Provider published price lists. If you go to a doctor, you should know how much it costs. We can include hourly or per procedure rates. That price should not magically change based on who insures you.
(State law) If a provider causes a disease or illness during treatment, the provider should eat the cost of treating it.
(Federal law applying to interstate transactions) Extend Robinson-Patman to cover medical insurance and pharmaceuticals. It’s time to separate employment from health insurance. We must end the existing conspiracy to charge different groups different prices for the same products to railroad more into insurance.
(Federal law if transaction across state lines/State law) Once insurance decides to pay – that’s it. You can’t go to a garage, get your car repaired, then take some or all of your money back a year later.
(Federal law) Medicare will not pay for any drug unless its wholesale price is the same regardless of who is buying it and its price is published.
(Federal law) Sarbanes Oxley shall not apply to healthcare organizations. This law only serves as an additional cost ultimately paid by patients. Given the financial crisis, it clearly hasn’t helped anyone. Sarbanes Oxley, has, however, given large companies with the structure to comply with it a competitive advantage. Until Sarbanes Oxley is taken out of the equation, don’t expect to see new providers, drug companies or insurers. Sarbanes Oxley isn’t just an arbitrary cost, it’s geared in favor of large companies with the infrastructure to comply.
(Federal law) If a patient and a doctor agree upon a course of treatment doesn’t have FDA approval, a patient and a doctor shall not be barred from getting that drug if they agree that it would help.
(Federal law if transaction across state lines/State law) Allow consumers to buy solely catastrophic coverage. Due to mandates in our current law, you can’t buy a policy specifically for catastrophic illness or injury. This is the primary reason to have insurance in the first place. Unlike the policies we’re forced to buy, a policy that only provides catastrophic coverage is affordable.
(Federal law if transaction across state lines/State law) Allow policies to be written according to a consumer’s wishes. Mandates force you to purchase coverage you don’t necessarily need. For example, if you have no fertility problems or don’t want to have children, state mandates in Connecticut force you to buy a policy with fertility treatments anyway.
(Federal law) If there absolutely must be a tax incentive for healthcare, it must count equally whether it’s for health insurance premiums, out of pocket expenses, copays, deductibles, medical devices and all things necessary for treatment. Anything short of that is a protection racket for special interests.