The Health Bill: Coverage for the Providers only

The Senate Health Committee is ready to unveil a proposal to Congress that would tax the wealthy, create a government-run insurance company, and force employers and employees to get everyone onto a health-care plan. I am all for the spirit of change in this nation, but I prefer it (immensely) to be done thoughtfully, and without the ill-conceived alacrity with which this bill has been pushed. It’s my hope that Democrats and Republicans alike attack this bill and shoot it down, for it is built up on fundamentally-flawed principles, and will only serve the health care providers in the long run.

Oh, sure, I’ve been accused of being cynical. “Desperate times call for desperate measures!” Those who know me (personally) likely know my position with regard to the health care industry. However, that’s not the perspective I want to offer here; what I’d like to offer is the following proposition: by getting everyone onto an insurance plan, the winners will be the health care providers. By ensuring that either an insurance company or the government picks up the bill for U.S. citizens, the health care providers have closed up a (small) gap in their profit-making machine – the dreaded insolvent patient. The scheme proposed by Congress will drastically lower the number of bankruptcy filers who are forced into bankruptcy protection due to medical bills; the scheme will not, however, address the reason why people have to file for bankruptcy in the first place: the excessive costs of health care.

And we all know why health care costs so much. Procedures that people (arguably) do not need. A lack of incentive to engage in preventive health care. Keeping people overnight for minor reasons. Doctors that make exorbitant salaries. Bad diagnoses. It has been estimated that unpaid medical bills only account for 6% of the lost revenue to medical care providers; thus, that, alone, cannot be the reason why costs are through the roof. It’s not unreasonable to look at the factors above as the primary reason why, despite the economic recession, health care premiums will rise 9% (or more) for the next fiscal year (by forecast). It’s not unreasonable, therefore, to look at addressing the problems above, rather than looking at merely reducing bankruptcy filings.

It’s time to take a page out of the public health care system, to see how those Western nations – which spend, on average, less than 50% of what the U.S. spends on administrative costs in the health care industry – address health care costs. So, here’s my proposal:

First, Medicare/Medicaid shall provide coverage to the elderly, dependents, the disabled, and to the indigent, regardless of their infirmity or condition. All must submit proof of their status upon admission to a health care provider. All health care providers must admit the elderly, children, the disabled, and the indigent, and treat them, and shall be responsible for gathering the required information.

Under Medicare/Medicaid, health care providers shall be paid not by the hour or by the procedure, but by the number of patients served. Health care providers shall be paid additionally based on the number of patients successfully treated. Health care providers may be paid above and beyond the numbers served and successfully treated by petition to the government. Upon showing of the reasonableness of a particular choice of procedure, Medicare/Medicaid shall reimburse the health care provider for the reasonable value of the services offered above and beyond the numbers. Abusers of the system, however, shall be punished accordingly.

The point of this system is to incentivize preventive medicine. If the elderly, dependents, the disabled, and the indigent are able to receive regular, preventive medical check-ups, then there is less of a chance that they will require the sort of treatment that can cost thousands of dollars. Naturally, there has to be a cap on how often one can visit a health care provider, but there is a benefit to health care providers to see more patients who are still relatively healthy, to provide appropriate care, and to discharge them. And, of course, there is a detractor to accepting more patients than can reasonably be covered – malpractice.

Second, no health insurance company shall be permitted to offer health coverage unless they are a qualified tax-exempt, non-profit entity. This means that the health insurance company shall be not be permitted to retain profits, and must, instead, expend any profits above and beyond normal growth. Acceptable expenditures should include research and development, as well as donating to hospitals and health care providers. Further, because of the Medicare/Medicaid structure, there will likely be fewer unhealthy adults and children in the health insurance pool, thus reducing the risk to insurance companies. The result: a drop in premiums for care. Plus, if Medicare/Medicaid is setting the bar for payment, insurance companies may adopt a similar system, which should lower costs to the insurance companies.

What do you get from this system?

A system that encourages preventive medicine at a young age.
A system that provides care and coverage for the poor, disabled, and elderly.
A system that discourages unnecessary procedures and spending.
A system that lowers premiums for the insured.
A system that lowers risk for the insurer.
A system that does not involve the government creating its own insurance.
A system that still discourages bankruptcy filing, due to coverage to the indigent.

In short: the health bill proposed, while a step made with the right spirit, is a step in the wrong direction. We must address costs rather than address the losses to providers, which have long been shown to not be a major factor in rising costs. The focus should remain on the exorbitant costs of health care, and on ways we can modify the existing system to address them.