Healthcare Crisis: Step 2 Let People Unite

Yesterday I proposed a multi-baby-step process to resolve the healthcare crisis.

Step 1, in yesterday’s post, is to get the State governments out of the mix thus reducing layers of regulation, oligopolies by the large insurers who can afford these regulations and thus allowing smaller innovative players to get into the mix and create both options and lower costs.

Step 2 would be to allow any group of people to band together as an insured group. Let the people work this out. Any groups would be allowed and encouraged, whether employees in a corporation or several corporations, members of a union or association of any kind (e.g., AARP), those helped by a charity, trade associations, industry groups, etc. The group could be set up precisely to purchase health insurance.

Groups could be local or national. Since Step 1 is completed, this is not an overly burdensome proposition.

The groups would be able to hire a professional health insurance negotiator. This person would help the organization decide how to create the best possible insurance solution given the nature of the group. Perhaps self-insurance with a Third party Administrator and catastrophic coverage above a significant cap. Self-insurance drives wellness because the group saves money if claims are lower than anticipated. Self-insurance allows for greater consumer-driven healthcare because again, lower healthcare costs benefits the group.

In other scenarios the group might be better off buying insurance from an existing provider, or perhaps a combination of providers. The group will decide what is provided and at what deductibles and co-payments. Chiropractic care? Psychiatric or psychological treatment?

Almost everyone will have a choice. There will be an affordable option for everyone. People will get creative. People will find their best personal solution. Groups will grow and change as demand changes. If there are holes in the system at this point, the government can look at next steps.

Most important, increased competition will drive costs down. Increased professionalism in developing and negotiating healthcare coverage will drive costs down and options up.

Step 1 and Step 2 alone will dramatically reduce healthcare costs within the federal government’s universal regulatory regime.