HEALTH CARE REFORM: WHAT A SOLUTION MIGHT LOOK LIKE




There are several truths that must be acknowledged before any realistic discussion on health care reform in the US can even begin:

1) Health insurance and health care are two different things. You can have a health insurance policy potentially worth millions of dollars, but if health care providers won’t accept it, or if your out-of-pocket costs before coverage kicks in are prohibitively high, then in effect you have no insurance.

2) Buying insurance is a sucker’s bet if there is no substantial harm in going without it. The very notion of insurance is predicated on assessing and managing risks. The customer’s risk comes with laying out money for fixed premiums, and the insurer’s risk comes with promising to cover the customer’s medical expenses if and when they arise. For insurance to work, both sides must accept those risks; no matter how cleverly you try, you cannot legislate the dual risk dynamic out of the insurance industry. More to the point, you cannot push all the risk onto the insurer’s side by permitting customers to buy insurance only when they desperately need it. A guy whose house is burning down will be eager to purchase fire insurance—but no insurance company will sell it to him. You buy insurance because you think you’ll eventually need a payout, not because you need the payout now; you may end up forking over more than you ever get back, but that’s the risk you take when you pay your premiums. It’s a form of gambling, like poker. You ante up with your premiums. You ante up before the cards are dealt. You can’t look at your cards, and then decide whether you want to be in the game. No ante, no chance of a payout. That’s the penalty for not anteing up in poker. Likewise, there must be a penalty for not carrying health insurance. In a decent society, however, it can’t be a death penalty.

3) Health care is a commodity, which means, like all other commodities, it is subject to the law of supply and demand. Calling health care a “right,” whatever you think that means, does not exempt it from the law of supply and demand; nor does calling it a “right” alter the fact that in a broadly capitalist economy, people who can afford better stuff tend to get better stuff.


The critical question to ask is what do we want a reformed health care system to do. What are we hoping to accomplish by reforming the current mishmash? Here, I think, are a few answers:

1) We want to bring down costs for many, if not most, individuals, and we want at least to rein in costs for the federal, state, and local governments who now subsidize, to a greater or lesser degree, health care expenses.

2) We want to make sure that people with pre-existing conditions are not locked out of the health insurance market altogether, yet we don’t want to create a moral hazard that allows people currently without insurance to wait until they’re sick to buy it. Again, there must be a penalty for not carrying insurance.

3) We want to simplify, insofar as possible, the purchase of insurance and the delivery of health care.

4) We do not want to ration care in such a way as to stifle medical research or thwart new and innovative treatments.


So how do we get started?

Step One: Cap malpractice awards nationwide. I can’t tell you exactly what the cap should be, but it should be as low as possible and pegged to the future earnings of victims. No punitive damages; no money for pain and suffering. If you want to increase the number of providers, you need to lower the overhead expenses for those entering the profession and continuing to practice.

Step Two: Increase the number of providers by lowering the credential requirements to provide primary care. You need a create a vast army of “primary care nurses” empowered to examine patients, recommend treatments, and prescribe medications—who do, in short, the same job primary care physicians now do—but who lack medical degrees. These nurses must be trained and certified above the current level of nurse practitioners but well below the level of licensed physicians. Their compensation will be significantly higher than the former but significantly lower than the latter. They will occupy a middle ground between the two.

Step Three: Establish two networks of primary care providers nationwide, one superior and one inferior. (If you cannot accept that one network will be superior, and one inferior—that two distinct and unequal levels of care are necessary and intentional—and that many people will wind up in the inferior network, you may as well stop reading now.) To underscore this point, and since this is my sketch, I’m going to call the superior tier the Shakespeare Network; the inferior, I’ll call the Shaw Network. Shakespeare will be populated by traditionally-credentialed primary care physicians; Shaw will be populated by primary care nurses. (Ideally, primary care nurses will work in clinics under the supervision of one or two certified physicians—though this will not always be possible in rural areas.) Specialists will not belong to either network.

Step Four: Reform employer-based insurance. If employers want to contribute to their workers’ health care insurance, let them do so. But give the employees a choice of whether to accept the company plan (whether it puts them in the Shakespeare or Shaw Networks), or to take the individual cost of the company plan as an annual bonus designated to buy their own insurance. If the employee can find a cheaper plan that suits his needs, let him pocket the difference…and if he wants a more expensive plan, let him add his own money to the pot. Among the many problems with the current system of employer-based insurance is that fact that employers offer group insurance plans that cover all employees the same way (so, for example, male employees must carry insurance that covers mammograms, and female employees must carry insurance that covers prostate exams).

Step Five: Let people shop anywhere for their policies, and let insurance companies tailor their offerings to narrow demographics. Why, for example, should I be forced to carry a policy that covers mental health care costs if I’m confident I’ll never incur those expenses? How much cheaper would a policy be that omits mental health coverage? Yet many states require that all insurance plans sold within their borders cover mental health care. Ditto acupuncture, erectile dysfunction pills, birth control, etc…if I know I’ll never incur these expenses, why should I be compelled to insure against them? Insurance companies should be free to offer pared down policies at lower premium costs—and to sell those policies to anyone anywhere.

Step Six: Let people further reduce the cost of their insurance by buying plans that restrict their primary care to the Shaw Network. Access to the Shakespeare Network, where primary care is provided by physicians rather than by nurses, should cost more. If you select the cheaper Shaw Network, but grow unhappy with your plan, you can opt into the Shakespeare Network by paying a substantial one-time adjustment penalty (based on your current age, life expectancy, overall health) and higher premiums from that point onward if and only if you are not already sick. If you are already sick—if you have a preexisting condition—you are locked into the Shaw Network. You cannot move up. So, too, if you choose not to carry health insurance for a year or more, you can pay a substantial one-time adjustment penalty and buy into the Shaw Network, but, again, you are locked in. You cannot move up to the Shakespeare Network under any circumstances.

Step Seven: Since specialists (including surgeons) belong to neither network, their services will be available to anyone insured by either network. But scheduling priority will be given to members of the Shakespeare Network…which makes sense, given that provider compensation is greater in the Shakespeare Network. Expect substantially longer waits for specialized services if you are a member of the Shaw Network. Also expect coverage for more expensive specialized services to be occasionally denied to members of the Shaw Network. You pay less, you get less. The medical industry will thus continue to innovate for members of the Shakespeare Network; benefits from the innovations will eventually trickle down to Shaw Network members, but wait times will no doubt be long, and the process of price-dropping will no doubt be slow.

Step Eight: Medicaid funds can only be used to access Shaw Network providers and services.

Step Nine: Medicare should be reconfigured as a lump sum annual payment sufficient to cover the cost of buying private insurance on the Shaw Network. The individual can then supplement that dollar amount to buy into the Shakespeare Network—provided that he has been a Shakespeare Network member for a minimum of (say) 20 years, or that he has no pre-existing conditions to prevent him moving from Shaw to Shakespeare and is willing to pay the cash penalty for such a move.