09.11The Health Care System Is Broken Beyond Repair…
Our thinking about America’s failed health care system is devoid of innovation.
The system that delivers health care in America is broken - everyone recognizes that. What the current proposals ignore is that the current system is shattered beyond repair. America’s health care delivery system won’t fix itself by making the federal government the captain of this Titanic or rearranging the deck chairs. The ship will still sink.
I know Sen. Obama, Sen. McCain, and the candidates for other federal and state offices act in good faith when they tour the country and listen to the stories of our fellow citizens. It’s important to recognize, however, that solving the individual problems embedded in those stories doesn’t solve the real problem. It puts a few extra folks in the lifeboats but the Titanic American Health Care System will still sink.
I have been in the insurance business for almost 40 years and spent at least half that time dealing with the health insurance issues of small businesses and individuals; problems that were often caused by the failed system.
The Kennedy plan, Hillary Care, Obama Care, the McCain plan - each of these has relied on the premise that the current system is fixable. It isn’t. Every one of these ’solutions’ fails to address the core problems of structure and responsibility.
There is at least one solution to the health care delivery system failure that serves the people first, as well as providers, insurers and government. I’ve studied this problem for thirty years as a consumer, a salesman, an advocate, a public servant and an advisor to insurance companies. The politicians, insurers, lawyers, and providers will never act to create real change without a paradigm shift. They will never act until Americans demand it.
· First, they have to admit that the structure that forces employers to manage the health care needs of employees is outmoded and decaying rapidly. It is putting the future of American businesses and their employees at extreme risk.
· Second, Federal and State governments need to recognize that solving the problem doesn’t mean taking over the system. Perpetuating a failed program with a new boss – especially one that demonstrates ineptitude through prior failure – is dumber than dumb.
· Third, insurance companies can’t expect to manage risk – the primary function of insurance – when they spend so much of the premium they collect on administration and paying for pre-paid services that are mandated by government or market demands These pre-paids but do not represent true risk.
· Fourth, the providers of health care charge more than they need to because the system puts them at risk of loss due to trivial law suits for errors that ignore our human limitations and imposes administrative overhead caused by the cumbersome structure of the insurance, legal, and regulatory systems.
· Fifth, the American consumer of health care fails to realize that the system is the problem. They blame the problems they face on government, insurance companies, or providers. They demand service and take little personal responsibility because they believe that the system should care for them.
A completely new system that addresses these five key issues and costituencies by restructuring the way we provide health care is entirely within our reach. Such a system would have these elements:
· First, employers would not be required to provide health insurance to their employees but would receive tax incentives – deductions and/or credits – to provide basic services such as annual physical exams, routine childcare, innoculations, preventative care counseling, etc. The federal agency that acts as overseer of this program would decide their exact makeup based on a wellness model. Local health care professionals could provide these services economically on a contract basis.
· Second, federal, and state governments could provide individual Americans with guaranteed coverage in the event of catastrophic illness that incurred expenses above a certain limit. This also allows the insurance carriers to provide coverage to everyone regardless of their medical conditions.
· Third, federal, and state governments in partnership with insurance companies could fund this program by creating a pool of money to that end.
o The federal government could provide funding through taxation.
o The state could supplement the federal contribution and provide oversight and administration.
o The insurance carriers could select a limit for the coverage that they would provide for all of their insured clients [not based on individual considerations] and pay a per-capita premium into the fund accordingly.
· Fourth, the system would protect health care providers from frivolous lawsuits and extraordinary malpractice insurance claims, lowering their cost of doing business and therefore the cost to the consumer and to the system.
· Fifth, every American could receive a small – perhaps $1,000.00 – subsidized medical savings account at birth that the federal and state governments and the insurance carriers would fund from the pool of money discussed earlier.
o The money in these accounts would escape all federal and state taxation during the life of the individual account holder.
o The money in these accounts would pay for medical expenses that insurance or employer wellness plans didn’t cover or for expenses incurred during periods of unemployment.
o Each individual could make additional contributions of after tax dollars at will. Others could make contributions of after tax dollars as gifts. At death, the individual could pass the money that remained in the account tax free to another person’s or several other person’s medical savings accounts.
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