Today both Democrats and Republicans agree that we need to reduce the cost of medical care.  The argument is... how?

A solution requires an understanding of how we got to where we are.  And an understanding of "insurance."  Here is a link to an article I wrote about health insurance some years ago.  The dollar figures are dated but accurate.  The financing factors detailed are still relevant.

Insurance is for disasters

For those who don't have time to follow the link above, the main point is that insurance policies have traditionally been used to protect us from disasters. When they are used to pay for everyday expenses, costs become excessive unless strictly rationed. I believe we come out ahead to buy insurance for major medical expenses only, and use the money thus saved to pay for annual check-ups and ordinary expenses. This way we can have the freedom to purchase the care we individually require without the bureaucratic friction that drives up the cost of medicine.

Health savings accounts give you control

Health Savings Accounts are the best way for us to have maximum control over our health care choices at minimum expense. These combine

* the Health Savings Account itself, into which you put pre-tax dollars
* an insurance policy to cover major medical expenses, also paid with pre-tax dollars

You may use the Health Savings Account to spend on your regular medical and dental expenses, including medications. You add to the account each year. The account gains interest tax-free. Unused amounts carry over from year to year. Should any money be left at retirement, it can be transferred into your IRA.

The insurance policy covers catastrophic medical expenses that exceed the deductible, which can be paid by your Health Savings Account.

Currently, federal regulations require a health insurance policy with an individual deductible in the range of $2500. For people able to self-insure a bit more, a higher deductible amount would provide a significant premium reduction, but is opposed by proponents of a universal health care system.

There are many uninsured people who might find a government-subsidized or sponsored Health Savings Account empowering. By giving that person a stake in the cost of medical care, there is a high probability the net taxpayer cost would be less than with any other plan.

You can start a Health Savings Account at Brent Shirley Insurance..

People must be treated as individuals

You meet many people in a medical career.  Here is what I've learned that has shaped the views expressed here.

Health system regulation is failing

People blame current high medical prices on "administrative overhead." Actually, the problems started years ago, when the government distorted the system by allowing corporations to buy health insurance tax-free, but did not give individuals the same consideration. Physicians and hospitals raised insurance rates because most patients were no longer sensitive to price. Even today, you have great difficulty getting any hospital to tell you what something will cost. Physicians do not post rates. I believe it is because they know they are too high, and just hope the insurance company will pay quietly and you'll keep paying your premiums.

Just as we do not buy auto insurance that covers every oil change, we are better off with health insurance that covers disasters only. No governmental health plan, no matter how carefully crafted, will motivate your physician to work harder than she will if she knows you are writing a check when the visit is over. No system can ever give you greater choice than your community of neighbors can.

Some people are very good at maximizing dollar income while minimizing work output. Some sell used cars, some sell unnecessary auto repairs, and some are doctors. Our legal climate discourages "discrimination." The result is, the conscientious physicians are hobbled by insurance oversight measures needed to prevent the cheats from milking the system. Single-payer medicine will make this only worse.

There are benefits to the current system

Yes, laparoscopic surgery is more costly. But when you count the cost of time lost from work for the older techniques, you end up saving money. Sure, we spend more than the folks in South Africa on extended care, but there, when grandpa gets dementia, he's in their living room for ten years.

No, most insurance here doesn't cover dental care, but when you need it, you have the option of buying it.  You have paid less taxes. In Great Britain, dental care is "free" but unobtainable.  Private dental surgeons there charge much more than here.  And you have much more difficulty finding after-tax dollars to pay them with. 

In 1982, 26 percent of people over 65 were disabled. In 2000, the figure was under 20 percent.  See  page 5 in this report.  Today, any American can get free care for life-threatening illness. Would you rather get sick in San Marino? (number 3 in the world in "health care quality" per the World Health Organization) or the USA. Would you rather lose your child to a rare congenital heart condition in Andorra (number 4 on the list) or sell your house here and save your child?

These are the improvements we need to make

We need to…

• Give individuals the same rights a corporation has to purchase health insurance with pre-tax dollars.  Don’t tie health insurance to the employer.
• Medicare pays the hospital about 30% of what the “rack rate” is. If the hospital charges the uninsured patient less, then Medicare pays less.  Solution:  allow the hospital to charge patients less, while Medicare pays the same as it does now.
• Require all doctors and hospitals to publish the price of all medical services.
• Develop a system that allows individuals ready access to their medical records.
• Require providers to allow patient evaluation via the internet, for all to see.
• Give consumers the option of lawsuit-prohibited, low-cost medical facilities.
• Allow insurance companies to sell “no-frills” health insurance.  Most states will not let you buy "no frills" insurance, instead choosing to require coverage for things like hairpieces in Minnesota, and alternative care in Washington State.
• Re-invent the pharmacy. Streamline the process of purchasing drugs for consumers.
• Allow the individual states to govern marijuana use, euthanasia, and other local medical issues.
• Increase public support of medical research so that we can get the big pharma’s thumb off the research scale.
• Allow insurance companies to choose which doctors they wish to deal with. Some doctors are very good at milking the system. The insurance companies don't wish to needlessly get between you and your doctor, but they should have the ability to provide health care at the most reasonable cost.
• Rationalize the way we deal with poor medical outcomes. We need to end the medical malpractice lottery and replace it with special medical courts to rule on medical errors and fairly compensate the patients. Next, we need to allow medical licensing boards to evaluate physicians who have erred and take appropriate action to protect patients.
• Huge amounts of money are expended on people using methampetamine and other "terminal" drugs. Even more amounts of money are spent caring for the children they beat up.  We must stop returning these children to these families.  The political impulse that "people are victims" leads to society's abandonment of these children.  The political idea that "people are not responsible for their actions" poisons our society, especially in Welfare States such as Great Britain.  Read Life at the Bottom by Theodore Dalrymple.

• Provide for a neutral forum for medical technology assessment.  This could provide the ability to separate agreed upon information from controversial information, such as Wikipedia.  That forum allows for discussion of controversy on subsidiary pages.  It could also provide evaluation of health care information sources, in the same way that people evaluate books and products at Amazon.com. 

• Allow responsible use of the internet to provide health care and information, allowing physicians and patients to maintain contact and care relationships across state lines.
• Create a range of new medical training levels and specialties. For example, a fully qualified gastroenterologist with a certain amount of experience should be allowed to train and supervise nurse practitioners or physician assistants to perform colonoscopy or endoscopy. You may notice how even the price of high-tech procedures such as LASIK have become much less expensive with competition.  We could see the same thing with many surgical procedures if, and only if, there is a reason to compete, as there has been with the LASIK procedure. Allow people to enter the health care field with little training, then study to improve their skills and responsibilities while performing basic health care tasks under supervision.  The military "corpsman" program should be thus emulated, with scholarships to academic medical training for those advancing in skill and wishing to work in underserved areas.

• Make the process of approving drugs up to date and fair. Remove the political component.
• Split the responsilities of the FDA into two parts. Right now the FDA approves drugs, then has to monitor safety. We should separate that. For example, the US Federal Aviation Administration certifies new aircraft. The National Transportation Safety Board investigates accidents and decertifies aircraft if necessary. Similarly, the FDA should not be given the conflicting responsibilities of approving drugs for market and then having to second-guess itself.
• End restriction of the number of doctors trained. For example, when the number practicing seems too high, the training programs will restrict their supply of orthopedic surgeons. We do not allow any other industry to monopolize a market in that way. We are paying a price for allowing certain medical specialty boards to restrict competition. If we end that, we will see the same kind of competition we see for dental service.

What happened to Doctor Welby?

Medicare happened. The Medicare program has driven many solo and small group medical practices out of business.

Medical Politics

The hand of politics lies heavy on the health  care industry.   The push for "single-payer" comes from the same organizations that have given us the current dysfunctional system.

Increasingly, physicians are finding themselves in the position of public school teachers. All the devotion in the world, all the intelligence and study in the world, can not make up for a system which requires its professionals to deal with too many people in too short a time. That is what is happening in all industrialized countries in the world and a single-payer system here in the US will only make it worse.

A few years ago I had this to say about government medical insurance.