I am going to use many of my own experiences to demonstrate that lower costs need not be Draconian or culturally seismic alterations to our economic and social fabric as is now proposed in Washington, DC. As always the government is mostly at fault for what we currently have, so how do you expect them to improve on it?
First: Allow insurance companies to offer coverage across state lines.
The reason for companies not currently doing this is that each state mandates what can or can’t be covered in a policy. However, many companies just open separate offices with different names and still offer coverage in most states. Obviously, this is extreme duplication of effort and expense for which we pay dearly. Maybe at one time when paperwork was king this was a feasible idea. Now with computers, that argument is mute.
Liberals (mostly Democrats) have always promoted this because of the huge donations the companies have made to their election campaigns. The Republicans certainly are not blameless since they were in power for a time and did nothing for the same huge donations.
Allowing competition to flourish, and permitting people to select a coverage menu would lower costs. If you do not want acupuncture coverage, why should you pay for it? This is required in 11 states; message therapy in 4; osteopathy in 24, and chiropractics in 47. As in all things, let the people who want it, pay for it. If you pool those who do want this over 50 states, the costs will certainly decrease.
I personally would choose to cover all of the above. I believe they all have their place in promoting good health and have used all of them in my lifetime and two of them in the past several months to fantastic results.
Understand that insurance companies are simply third party providers and do no service other than accumulate and distribute money, and do the paperwork. The less expenses there are and the greater the pool of money, the lower the over all costs.
Second: Make Large Deductible Policies Mandatory.
As I said, insurance companies are third party payers and have no money of their own. The more you ask them to do, the greater the costs. Nothing is more expensive than first dollar coverage. Having a $250 deductible as opposed to a $1000 deductible costs much more than the $750 a year difference because of the time and labor involved in handling the claims. I have a $1,000 deductible per person, plus $500 maximum on prescriptions per person after the $1,000 has been met.
In my case there are three of us covered; therefore the difference in deductibles is $2,250 ($750 X 3), but the difference in coverage cost is more like $4,000. Over the past 20 years I’ve saved about $70,000.
Obviously I’ve had to use those deductibles and prescription overrides, especially over the past 4 years. My total cost has been about $40,000; therefore, I still saved about $30,000. Part of the costs will be recovered by my insurance company and me when my car accident case is settled so that figure is even less.
It is just human nature that the lower the deductible, there more medical care is pursued. If the first $1,000 comes out of your pocket you tend to be more selective in what services you seek.
If you want to see this principle in action, go to any emergency room and see the crowds of Medicaid patients there that have no deductible presenting with sniffles, sneezes, and pain, real or imagined. I’ve been there three times this year with pain that was close to unbearable, having to wait as much as an hour. Even though they did have a system of triage, I still had to wait for an open room, almost as another hour. All in all I was lucky to be seen as quickly as I was. After the car accident in 2007, I had to wait 3 ½ hours in the waiting area, and another 2 hours for service.
If every policy written were with at least a $1,000 deductible, people would be more inclined to be selective on their visits and the laws of supply and demand would work more efficiently. The more services demands the higher the cost, conversely the lower demand would lower costs. It is that simple.
Third: Medicaid Co-Pays.
Medicaid expenses are a huge part of every state’s budget and are growing rapidly. A lot of the stimulus package earlier this year was aimed at Medicaid. How that is a stimulus, I have no idea.
As I said the emergency rooms are crowded with Medicaid recipients. I am not totally opposed to the program, just how it is administered. In 1994 I suggested the following to my state senator.
Why can’t we charge a $50 co-pay for emergency room visits, $10 for private physician visits, and $5 for clinic visits? This obviously funnels the care to the least expensive venue and reduces Medicaid costs drastically, because emergency room visits are the costliest form; and, it clogs the ERs with non-emergency visits, which is dangerous.
My senator came back to me a few weeks later and said it was impossible because the Feds require that no more than a $5 co-pay can be charged.
A co-pay plan as I suggest would cut costs and demand without reducing service, just changing the service locations.
In Summary:
These three changes would reduce medical costs dramatically, maybe by as much as 30% to 40% without reducing care or service. It reduces excessive demand and increases buyer awareness. After all, medical care is a commodity just as food or housing.
Our problem is not quality of care. We have some of the best in the world. However, costs have gotten out of hand.
In my opinion, the current bills before the Congress and the Senate will do nothing for that except increase our national debt and bankrupt the country even further.
Health care is not a right but a privilege and an individual responsibility. I would agree that those of us who have the misfortune of not being able to pay for coverage should be cared for (the purpose of Medicaid), but it is those who opt out or simply want someone to pay for their expenses I can not abide.
I don’t think it is wrong to consider the federal take over of health care as simply another power grab, you decide.
The future is at hand,
The Hammer
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Comments: 6
I don't believe I said anything of the kind. There are no "free" service models. Someone pays for them and usually not by choice. Increasing grants and ways to help student my not be effective, because the jobs are becoming untenable and undesirable, decreasing the supply.
But you bring up a couple more points that are very valid. An informed consumer is a better consumer. The new proposals are throwing the bath water and the patients out in the streets; these proposals though limited actually grant the consumer a degree of power and control they never have had before. But I Believe in them (the people, the patients, and the doctors) and know they can handle the situation if given the chance. There are plenty of us out here to teach them. The government as always has to get out of the way.
I would not have set up Medicaid the way it is, as it is unsustainable, but it can be modified to do less damage.
There are simply and not so simple ways to get medical back to a supply/demand function and a real doctor/patient relationship which is now pretty much missing from the picture.
Good post. I think the true issue with health care reform is to address the triangle that is formed between you, your health care deliverer, and who pays for the service. That triangle keeps you from applying your usual 'value/quality/efficiency' requirements in health care transactions that you apply routinely everywhere else and thus the costs go up and the quality goes down. While it may not be practical across all segments of health care (emergency room care for example), finding a way to replace that triangle with a more traditional binary relationship between buyer and seller (as with nearly everything else we buy) is an important first step at improving health care. No aspect of ObamaCare tries to accomplish this.
Though prying the Trail lawyers Assn from the Democrats is going to be tough. They are one of the two largest contributors to the party. The Teachers unions are the other.