Healthcare Crisis: Step 5 – If Needed

Years and years of tradition and entrenched industries will bog down sweeping reforms to the healthcare system. In this series I have suggested that a step by step approach would work, perhaps without getting too far past step 2. You can find steps 1 through 4 below.

Step 1: Remove State regulation. Create one level national set of regulations. Everyone but the States will favor this and it will lower costs and increase options.

Step 2: Allow any group to band together to buy health insurance or set up self-insured plans, inside or outside corporations. Every union, charity, trade association and Chamber of Commerce will favor this one.

Steps 1 and 2 increase supply and lower demand, which will lower prices. They will also reduce costs, allowing for profits at lower prices. There is a good chance that just doing this will significantly decreases costs and prices, increase options and insure nearly everyone who wants insurance. Most important, there is no reason these should not be relatively easily passed AT LOW to NO COST to the government.

Steps 3 and 4 might correct themselves if the above are accomplished. These involve eliminating volume bonuses paid to brokers to sell more of one company’s products. Step 4 is a limitation on malpractice if someone dies or becomes disabled because “extra” tests were not run to save everyone on medical costs.

If, and only if, Steps 1 and 2 (perhaps with 3 and 4) do not solve the problem sufficiently, then we should consider the following:

Government Funded Universal Catastrophic Healthcare Coverage
Any expenses over some significant number, like $200,000, in a year or for one illness or injury (cancer, Alzheimer’s for life), would be covered by the government. This will lower the risks to insurers and will thus lower premiums. Self-funded groups always purchase catastrophic coverage. This would eliminate that expense and lower self-funded costs.

To reduce costs, there would be no malpractice claims permissible against doctors performing work for the government.

There may be only specific doctors who are approved to do this work. A doctor could opt-in and take want the government paid or opt-out and look for private pay clients or cease work on cases above normal insurance levels. As with Medicare now, most will opt-in.

Anyone could opt-out if they want to use another doctor, but that would be a privately paid or insured risk.

Healthcare will remain privately provided. Competition, creativity, self-funded health coverage and professional negotiation by experts hired by the groups will drive insurance prices down. Groups with interests in helping certain people currently uninsured (Charities, Unions, Trade Groups, Hispanic Chamber, NAACP, Urban League, Churches, etc), would drive broader coverage. No State regulations, lower risks in groups, wellness programs in self-funded groups, some protection from lawsuits and ultimately a cap on liability will lower costs.

Just some thought from the peanut gallery. Good luck up there on Capitol Hill. You will need it.