Health Care Reform–My two cents

The United States of America has many wonderful qualities, but not its healthcare system.  The rancorous debate during the last three months has exposed many flaws in our healthcare system. Sadly, I am becoming doubtful that true reform will exist.  Despite my doubts, however, I too, feel compelled to weigh in with my prescription for healthcare reform.

For transparency sake, allow me to first reveal my problem assessment—I see six.

  1. Too many people do not have access to basic medical care
  2. Too many medical procedures are ordered for people who have care
  3. Tax policy provides an advantage for employer provided medical coverage over individual provided medical coverage
  4. Consumer protections are insufficient against insurance companies and medical providers
  5. Mandated medical services do not address society’s priorities
  6. Today’s systems mix insurance coverage (spreading risk for uncertain events) and financing schemes (smooth monthly payments) for voluntary medical procedures in the same consumer contracts.

There are many other unintended consequences exhibited by today’s healthcare system.  But public policy that effectively address the above six root causes will make substantial differences in the lives of America’s citizens.

The following solutions are not a one-to-one match for the above problems.  Each solution works to support one or more of the problem definitions.  Hence, my policy solutions for healthcare reform in no special order.

Insure healthcare access for all citizens at a minimally acceptable level of coverage; allow those who can afford greater coverage the right to go beyond the minimum

A contentious aspect of healthcare reform is the assertion that the government will take over healthcare.  News flash, the government runs healthcare delivery for Veterans, the elderly and the poor.  An expansion or retraction of government involvement is not the central issue.  No, the core issue should be the definition of “minimum acceptable coverage.”

The public policy decisions about minimum coverage should cover six key segments of the population.  However, my designation of these segments does not imply that government should provide the service.  How the government insures healthcare access has lots of possibilities, but the core idea should be that every citizen has access to a defined minimum level of care—Universal coverage, meaning everyone gets the same services, would be a disaster as it violates this country’s value paradigm.

I believe, there is ample room for private citizens to operate with a profit motive and deliver minimum levels of government mandated services.  As an illustration, we have federally established minimum food safety standards, but we do not use government feeding stations to abate hunger across any income range.  And the nonprofit feeding locations that exist do not run for profit entities out of business.

The six key segments

  1. Obstetric care
  2. Children under the age of 5
  3. the top infectious disease risk to the American society
  4. Veterans and all injuries sustained in military service to the country
  5. the top causes of death in the American society
  6. the poor who cannot afford services  .

The federal government—the Department of Health and Human Services—should define at regular intervals the infectious disease risk and top causes of death as a policy directive to keep the society healthy and workforce productive.  And eventually, we will have to admit that minimum coverage is excessive, but the society through its elected representatives is the proper place to put the constraints on such a system.

The other segments address population segments that I feel need special attention for minimum coverage levels.  Medical situations not captured in these segments, of which there are many, must fall in to a second category of medical services—those allocated by income and ability to pay.  Nothing should restrict states or nonprofit entities from providing services beyond the federal mandated minimums, however, care should be taken as public policy inevitably addresses the migration of people between jurisdictions.

Provide consumer protections

Two aspects of consumer protection are of most concern:

1)    Consumers who make medical service decisions under duress

2)    Insurance companies and medical providers motivated by excessive profits (fraud, greed, and zero compassion) at the expense of reasonable care.

In any capitalistic society, both concerns must be addressed.  The cry from many people is that the patient and their doctor should be left alone to make the medical decision they believe is most appropriate.  Hogwash, not because the philosophy does not have a place, but because it is inapplicable to so many circumstances.  For example, a person who receives a surprise diagnosis cannot make rational decisions for medical services, and neither is the person on the way into surgery able to distinguish the value of post surgery medical services.   Yet, the occurrences are both common today.  Removing duress from decision making will bring down costs by limiting procedures and services.

The gamesmanship of medical service providers is simply, to seek profit over the care of the patient.  This arena would be better left to the states to enact with support from the federal government to identify the areas needing attention.  Unfortunately, human beings’ bad attitudes cannot be regulated away, but their behavior can be addressed.  The consumer protections in this arena would affect the license to operate, public disclosure of poor performance and disciplinary procedures.

Make tax policy neutral to all aspects of providing and receiving medical services

Realistically, a person’s employment status has zero to do with the need for access to medical coverage.   Government should simplify life and the tax code by achieving a neutral tax position between employers and employees as it regards medical service expenditures.  For practical purposes, this means creating a deduction for individuals who purchase insurance and removing the 7.5% of income threshold for deducting medical expenses.  The alternative, taxing employer paid benefits as income is unnecessarily cumbersome to execute.  As a country we have provided for generations an interest deduction for primary residence loans, yet we debate health insurance deductibility—Nonsense.

End barriers for coverage for people with pre-existing medical conditions

The construct of pre-existing medical conditions is simply a vehicle for insurance carriers to point the finger at the other and say, “you pay.”  The concept has no place affecting access to coverage.  As a society, this issue has been resolved with car insurance—subrogation—but somehow, for human medical coverage, insurance companies can’t figure a way to consistently determine who owes who between the two companies.  Unacceptable.  If we can resolve who should pay for car insurance, we can, as well, for medical services.  We need a predictable and consistent system that is forced on the insurance companies to behave, without compromising the access to coverage for the person changing between the two companies.

Enact tort reform to reduce the unintended waste generated with the excessive ordering of medical services

American medical services generate more waste than any other country in the world.  The waste comes as excessive test and services.  Excessive testing is not better medical care.  The driver of this behavior is either a) greed & fraud, or  b) cover your ass (CYA) procedures to protect against tort claims of negligence.  Greed and fraud will exist in every system where a profit potential exist—see the call for consumer protection above.  However, the CYA procedures result from a flawed legal standard that penalizes good decision making in uncertain environments, thereby encouraging excessive waste.  Tort reform means adjust the legal standards for negligence—A public policy responsibility.  The are many arenas of government where “safe harbor regulations” exist—they are now needed in medical malpractice arena.

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