A Proposal for Healthcare Reform

[TomAiello 25]

Here's a pretty good proposal:

a) create a national health insurance policy with a high deductible (say $3000)

b) create a tax free health savings account for each citizen

c) deposit some amount into the health savings accounts (or just those of people under a certain income level) every year (for example $1000)

d) allow people to withdraw (tax free) any amount in their HSA that exceeded the deductible (in this example $3000)


Such a plan would encourage each consumer to mind costs, and motivate them to save money. It would also reward them for doing those things. At the same time, it would eliminate the catastrophic medical costs that can bankrupt people. It would also scale back the influence of the health "insurance" companies (really, I think that "healthcare finance companies" is a more accurate term for them), bring medical decisions back to the level of doctor and patient, and streamline the (massive) payment bureaucracy.

You could even use such a program to eliminate medicare, medicaid, and the VA health system (saving trillions of dollars) by simply deciding to deposit the full deductible amount ($3000) into the HSA of people who qualify for medicare/medicaid/VA care. If you did that, you might want to tax the amount they withdraw at the end of the year, although personally I think the system would work marginally better without that extra taxation of benefits.

You can then adjust the amount of the automatic contribution, and the rules for qualifying, to match your personal social engineering preferences. That could go all the way from giving the full $3000 to every American to eliminating the HSA contribution, and everywhere in between. A middle of the road proposal could give people with less than $20k/yr in income the full $3000 contribution, phasing that out as income went up, by $100 for each $1000 of yearly income (so that at $50k, the government made no contribution to their account).

Enacting such a plan would:

a) Create an incentive to save money on the part of every patient

b) Create substantial savings over the current system

c) End the problems resulting from our current employment based system

d) Provide universal coverage for every American

e) Substantially reduce the (massively expensive) influence of the health care finance companies (health "insurance" companies)


What do you think?

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[kbordson 8]

Initial impression: I like it.


Other issues -

actual benefits, ie what is "covered"? Is this "health care" or does it include dental/vision/medications, what about "alternative" techniques/procedures (chiropractic, accupuncture).

What if you don't use all the money for that year, can you "roll it over" to the next or is the money forfeit?

will this "encourage" / "force" a standardized billing system for the medical field (right now... there is NO standardization... a lab test can vary between $6 and $25 depending on whether your insurance plan will only pay "this" amt... and the lab "writes off" the rest - and instead tacks it on the next) Will this be met with "you can't tell me what to charge"! Who decides the "standard billing charges"?





- a VERY respectable starting point (better that that other plan that I read) but it won't address the issue with the rapidly escalating COST of medical care.

[TomAiello 25]

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actual benefits, ie what is "covered"? Is this "health care" or does it include dental/vision/medications, what about "alternative" techniques/procedures (chiropractic, accupuncture).

In the case of the HSA, you could spend it on almost anything (even non-prescription medications, for example).

In the case of the high deductible policy? It would be covering the typical catastrophic stuff that you see bankrupting people (trauma, birth complications, etc).

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What if you don't use all the money for that year, can you "roll it over" to the next or is the money forfeit?

You have to roll it over. That's the only way you can eventually exceed the deductible and be allowed to withdraw the cash. Rewarding people for saving money is one of the key components of this plan.

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will this "encourage" / "force" a standardized billing system for the medical field...Who decides the "standard billing charges"?

No. And no one. The idea of empowering the patients (i.e. making it a first party payer system) is that they will then be incentivized to shop around and pay lower prices for those parts of their healthcare (routine treatments, outpatient labs, primary care) that aren't urgent. The high deductible policy eliminates that need in the case of urgent care, so that you're not trying to price shop in the midst of a multi-trauma MVA.

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...but it won't address the issue with the rapidly escalating COST of medical care.

I actually think it would.

It will address the daily costs by reducing the overhead associated with "insurance" companies, and also by encouraging price shopping (by letting people take home the excess for their own uses).

You are correct that it doesn't really address the escalation of costs in the "high deductible" world. Major surgeries, for example, might actually become more expensive if it was known that the government was footing the bill. You could address this in the short term with a system that regulated the prices on things like that, but in the long term it's always better to design the underlying system to exert downward pressure on prices over time (like the low cost end of this proposal). Do you have any ideas on how to do that for the high cost emergency stuff?

In terms of high cost non-emergency care (surgery for ruptured disks and the like), I think we'd be ok to leave that to a private, secondary insurance market. People would price shop those policies, and if the policies had cost limits, people would price shop their surgeons, too.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[rehmwa 2]

So is this actually a proposal by some (yet unnamed) Congressperson?

Which, once we have a discussion on how neat this idea is, you'll spring it on the rest of us that some twit like Al Franken proposed it?

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[TomAiello 25]

Quote

So is this actually a proposal by some (yet unnamed) Congressperson?

Unfortunately, no.

I just made it up a few minutes ago. It's largely based on this article, with some other ideas thrown in.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[kbordson 8]

Other thought....

I really do like the high deductible. But maybe it should be a sliding scale.


For many $3000 might not lead to bankruptcy, but for some it might. Especially if the injury occurred on December 28th. ER visit, emergency surgery... release on Dec 31st. New year.... BAM - another 3k deductible for rehab.

Have the deductible based on income.

But... then the arguments about giving your financial information for getting health care comes in to play again.....

[TomAiello 25]

Quote

Other thought....

I really do like the high deductible. But maybe it should be a sliding scale.


For many $3000 might not lead to bankruptcy, but for some it might. Especially if the injury occurred on December 28th. ER visit, emergency surgery... release on Dec 31st. New year.... BAM - another 3k deductible for rehab.

The idea for the sliding scale on the automatic contribution was to avoid the sliding scale on the deductible, by making it "fair" for everyone, because the lower income people got subsidized directly.

You pretty much need to have a high deductible to encourage people to shop around, and exert downward (market) pressure on prices. I picked $3000 because I figured that's about the level that hospitals are already dealing with when they finance things out to payment plans for patients who have trouble paying.

What if you had a moving average year for the deductible, to avoid the end of year issue?

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[rehmwa 2]

Quote

What if you had a moving average year for the deductible, to avoid the end of year issue?

how about - there is no limit until you hit $3K - then the next 365 days are covered. At that point, you start filling the deductable again from zero

that way people that are healthy don't have to reset every year and get bonus for not over using the services

some people will take 3 years to hit $3K and than the 4th year is covered - they might be very healthy

others will use up 3 months to hit $3K and then the next 12 months are covered before they have to contribute again - these are very sick people or system abusers

this means if you use the services more - then you pay more - it also addresses catastrophic coverage which is really the big issue

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[kbordson 8]

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The idea for the sliding scale on the automatic contribution was to avoid the sliding scale on the deductible, by making it "fair" for everyone, because the lower income people got subsidized directly.

Good point.

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You pretty much need to have a high deductible to encourage people to shop around, and exert downward (market) pressure on prices. I picked $3000 because I figured that's about the level that hospitals are already dealing with when they finance things out to payment plans for patients who have trouble paying.

What if you had a moving average year for the deductible, to avoid the end of year issue?

Or make the end of year on July 1 to discourage unnecessary visits in July... the most DANGEROUS time to be in the hospital!!! (start of new residents/interns)

[TomAiello 25]

Quote

how about - there is no limit until you hit $3K - then the next 365 days are covered. At that point, you start filling the deductable again from zero

Generally I like it.

The issue is going to be with the chronically ill, who use up 3k every month. But then, that's an issue now, and it's going to be better under your system than under a typical yearly deductible system. And they will get 12 months of free care for every 3k they have to pay out of their HSA.

Plus, since those are people who would probably qualify for medicaid now, we'd be looking at giving them the whole 3k. Would you give that contribution (of whatever amount) every time the deductible re-set, or keep it yearly?

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[wmw999 2,123]

I rather like it, too. I agree with Karen that $3000/year is way too much for some people (it really is). But the idea of having people actually pay attention to their medical care is kind of refreshing.

Right now there's an awful lot of medical care going on, and according to soemthing I heard on NPR last night (some studies done in Maine), more medical care isn't necessarily correlated with better results.

E.g. caesarian sections -- some hospitals do a lot, others don't do as much, without a big change in infant or maternal mortality. Back surgery is another example.

The point made was that doctors are paid for procedures, rather than for care. So duh of course they do more procedures. And it's not malicious or money-grubbing -- people tend to do what's considered the standard of care in the community, and the more doctors in the community, the more care they can give.

You had mentioned in an earlier version that Medicaid and Medicare recipients are included in this -- I think that's actually pretty important; it reduces the incentive to stay where the medical care is good, without compromising the care for people who really need it.

But it's way too simple. It'll never work.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[rehmwa 2]

Quote

The issue is going to be with the chronically ill, who use up 3k every month.

what issue? they are the ones using the most of the services, so they end up paying $3K every 13 months - they'd be the biggest users and the biggest contributors as such - but the contribution would be capped, so it can be planned for.

...
Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[robskydiv 0]

Sounds like a winner. & that's exactly why they won't go for it. You mean "No hands in the cookie jar?"

Too simple.

[wmw999 2,123]

One question would apply to current insurance companies -- this would appear to put them entirely out of business, or am I missing something?

Wendy

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[kbordson 8]

Quote

I rather like it, too. I agree with Karen that $3000/year is way too much for some people (it really is). But the idea of having people actually pay attention to their medical care is kind of refreshing.

Right now there's an awful lot of medical care going on, and according to soemthing I heard on NPR last night (some studies done in Maine), more medical care isn't necessarily correlated with better results.

E.g. cesarean sections -- some hospitals do a lot, others don't do as much, without a big change in infant or maternal mortality. Back surgery is another example.

The point made was that doctors are paid for procedures, rather than for care. So duh of course they do more procedures. And it's not malicious or money-grubbing -- people tend to do what's considered the standard of care in the community, and the more doctors in the community, the more care they can give.

You had mentioned in an earlier version that Medicaid and Medicare recipients are included in this -- I think that's actually pretty important; it reduces the incentive to stay where the medical care is good, without compromising the care for people who really need it.

But it's way too simple. It'll never work.

Wendy P.

Commenting on the "payment by procedure".... I actually prefer a system based on physician productivity, Relative Value Units ("RVU"). But the current system has different "charges" for the same procedure based on the insurance company of the individual. (which I don't like, because then physician "cherry pick" the insurance companies they like)

The other option is payment of physicians by salary.

But both options have problems.

I currently am in the salary category (beginning a new group in a month) I like the salary - not cuz I'm lazy, but rather, I'm restarting my patient population so not a lot of "productivity" in the next couple of months. And once I am productive again, when I'm done counseling most of my patients on conservative, medical and surgical management of problems and then discuss the risks and benefits of those options. MANY prefer to try conservative or medical options. But SURGERY should still be an option... even for those women that say "I WANT A C-SECTION!!" (and no medical indication)

But basing salary on RVU's would encourage physicians to be "productive" but does encourage increased focus to those "high value" activities (like surgeries)

[TomAiello 25]

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I rather like it, too. I agree with Karen that $3000/year is way too much for some people (it really is). But the idea of having people actually pay attention to their medical care is kind of refreshing.

Right now people are being hit with bills of that magnitude, and they are surviving, mostly because they can negotiate payment plans for them.

Remember that under this plan, the government would be directly subsidizing the cost of care for lower income Americans. The only people who could be hit with $3000 in a year would be those making more than $50,000 per year, and I think they can handle it. People making less than $20k would never face any extra costs, and people between those two numbers would have a sliding scale, so that at 30k (for example) the most you'd ever have to face in a year would be $1000. Do you really think that $1000 is too much for someone making 30k/yr to handle (serious, not rhetorical, question)?

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Right now there's an awful lot of medical care going on, and according to soemthing I heard on NPR last night (some studies done in Maine), more medical care isn't necessarily correlated with better results.

I heard that piece too. It was very interesting. I wish there was a wider base of more recent data for it, but the data collection was pretty intensive, and I bet that it would never be allowed under the current federal regulations. Imagine the HIPAA violations.

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The point made was that doctors are paid for procedures, rather than for care.

Which is why the patients need to be in the driver's seat for payment--they are the one's with the incentive to manage costs.

Quote

But it's way too simple. It'll never work.

I bet it would work. It just wouldn't make it past the lobbyists in DC. Look at how much money it would take from the mouths of starving "insurance" company CEO's.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[TomAiello 25]

Quote

One question would apply to current insurance companies -- this would appear to put them entirely out of business, or am I missing something?

They're not really insurance companies. They're more healthcare financing companies. And yes, they'd get scaled down a lot.

Real insurance would still be an option (for non-emergency high cost procedures, for example). And I bet the healthcare financing companies would offer a version of their existing plans that would finance care below the federal deductible, marketing it toward people who are worried their HSA would fall short in any given year.

But, yes, I think that the current employer based healthcare finance company system is pretty much rotten to the core, and needs to go.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[TomAiello 25]

Quote

The other option is payment of physicians by salary.

I'm a fan of physicans being organized as small businesses controlled by themselves (or small groups of doctors).

My wife is now on salary, and one of the things she laments is that she can no longer give away her services to people who she thinks are deserving. Back when she was a greedy, money grubbing fee-for-service doctor, she saw indigent (or otherwise hard pressed) patients for free, and even took the time to make house calls. Now that someone else is in control of the financial reins, she can't do those things, and I know it bothers her.

-- Tom Aiello

[email protected]
SnakeRiverBASE.com

[funjumper101 15]

Quote

Here's a pretty good proposal:

a) create a national health insurance policy with a high deductible (say $3000)

b) create a tax free health savings account for each citizen

c) deposit some amount into the health savings accounts (or just those of people under a certain income level) every year (for example $1000)

d) allow people to withdraw (tax free) any amount in their HSA that exceeded the deductible (in this example $3000)


Such a plan would encourage each consumer to mind costs, and motivate them to save money. It would also reward them for doing those things. At the same time, it would eliminate the catastrophic medical costs that can bankrupt people. It would also scale back the influence of the health "insurance" companies (really, I think that "healthcare finance companies" is a more accurate term for them), bring medical decisions back to the level of doctor and patient, and streamline the (massive) payment bureaucracy.

You could even use such a program to eliminate medicare, medicaid, and the VA health system (saving trillions of dollars) by simply deciding to deposit the full deductible amount ($3000) into the HSA of people who qualify for medicare/medicaid/VA care. If you did that, you might want to tax the amount they withdraw at the end of the year, although personally I think the system would work marginally better without that extra taxation of benefits.

You can then adjust the amount of the automatic contribution, and the rules for qualifying, to match your personal social engineering preferences. That could go all the way from giving the full $3000 to every American to eliminating the HSA contribution, and everywhere in between. A middle of the road proposal could give people with less than $20k/yr in income the full $3000 contribution, phasing that out as income went up, by $100 for each $1000 of yearly income (so that at $50k, the government made no contribution to their account).

Enacting such a plan would:

a) Create an incentive to save money on the part of every patient

b) Create substantial savings over the current system

c) End the problems resulting from our current employment based system

d) Provide universal coverage for every American

e) Substantially reduce the (massively expensive) influence of the health care finance companies (health "insurance" companies)


What do you think?

I think that's a terrible proposal.

Why do conservative idiots continue to support private businesses making tons of money off of people's suffering?

It is time for the USA to join the rest of the civilized world and move to single payer health care.

The USA is the laughingstock of the world for the astounding ignorance and gullibility of its citizens. It takes a reallly ignorant imbecile to support the status quo, with a few minor variations.

Single payer, like the rest of the civilized world. Medicare for all. It can and will work, if we, the people, make it so.

[rickjump1 0]

The major obstacle to a plan like this would be the insurance companies. Up until last night, I had no idea the insurance companies (and major league baseball) are exempt from federal anti-trust laws. Now we know why citizens cannot shop across state lines for cheaper insurance and the insurance companies share data about customers, fix prices, and so on (Mc Carran-Ferguson Act 1945). It will be more than a battle, it will be a little war to fight politicians who are in their hip pockets. This won't happen overnight, but the signs are there. People want change, and this is a good start.

Do your part for global warming: ban beans and hold all popcorn farts.

[wmw999 2,123]

Ya know, every one of us who thinks this is a good idea could email their Senator and congresscritter. It sure beats just whining about it.

Insurance companies are not the source of all evil, and almost any system like this will do away with a decent number of jobs (all those insurance-paper-processing jobs). But in the long run, reducing costs allows the reallocation of assets to something more useful.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[kbordson 8]

ok... did you even really READ it?! I would cut and paste his post directly to your arguments to show that your comments do NOT seem directed to his idea AT ALL - but I don't want to waste that bandwidth on something you won't read anyway.

Read it. Think about it. THEN POST. m'kay.

[billvon 2,400]

Not a bad idea. It would be critical to ensure that there is opennness in the pricing structure, so that hospitals could not say "we'll itemize up to $3000, and above that we won't because the government will just pay for it anyway."

I also assume that the money in the HSA would be tax free to withdraw for health care purposes only.

[Rookie120 0]

I kinda like it! Was this your idea on your own or did you get it from someone?

If you find yourself in a fair fight, your tactics suck!

[rickjump1 0]

My way or the highway? Go back to your mudhole and troll.

Do your part for global warming: ban beans and hold all popcorn farts.