The primary goal of reform should be improving patient care. Experts tell us: 1) at least 25-40% of healthcare costs are the result of end of life and chronic health conditions; and 2) we waste 25-40% of healthcare costs paying insurance companies more than they actually pay out for our medical costs. Additionally, doctors/hospitals and patients waste costs processing insurance paperwork. For affordable patient care, we must eliminate all costs that divert dollars from the patient.

We can creatively use the free market system and our tax code to revolutionize healthcare to enable each of us to manage our OWN healthcare without medical transaction direction from government, insurance companies or employers. We will drastically reduce costs in doing so.

Several key elements would be needed. First: Employee salaries would be increased by law for premiums that employers will stop paying for us. Second: We each will pay first dollars out of pocket from the salary premium increase plus an additional annual deductible and transactional co-pays. Third: The government would pay for all additional costs via a National Healthcare Credit Card that we would use to charge each medical transaction. The card would track all healthcare costs nationally with each swipe of the credit card machine to create real time data. Fourth: Using annual tax returns, each of us would reconcile annual health costs and be allocated tax credits to pay off our card balances, depending upon income level and type of cost (elective, preventive, diagnostic, remedial). Tax credits, co pays and deductibles would conform to federal budget constraints. The uninsured and those with preexisting conditions would be included.

Fifth: All medical providers would be required to post fees for each service on the internet; we could choose competitively, be it a cooperative, a clinic, hospital, or specialist. Sixth: Doctor fees would be fixed at present insurance paid amounts until the supply of doctors increases to fill present shortages, after which market forces would be in effect. Seventh: Hospitals and clinics would, like utilities, be regulated to earn only a reasonable return on assets invested; they would establish their own fees to achieve this. Penalties would include return of annual excess permitted earnings to those who paid them that year. Eighth: In return for lower prices on expensive new drugs, pharmaceutical firms would: 1) be granted longer exclusive patent terms and/or royalties on generics for a period; and, 2) be required to allow other manufacturers paying royalties to make new drugs to end new drug monopolies by segregating the creative process from production and sales. Ninth: Pain and suffering judicial awards on both attorney earned fees and patient earned awards exceeding an agreed minimum would be taxed at very high rates, in order to discourage them.

As in physics, for every economic action, there is an equal and opposite reaction. Try to manage care, by fixing fees and restricting medical choices". the reaction is rationed care with even higher health costs due to less time spent on the patient and more doctor visits needed. Hidden premiums are created as insurance companies subjectively calculate “allowable” payments to doctors/hospitals; we are billed for the amounts they won't pay. Our economy suffers from wasted time spent on administrative procedures by insurers, providers and patients. Let employers pay your insurance" the reaction is higher costs to employers, resulting in less jobs in our economy. If employers change insurers employees must change doctors and this creates higher costs due to lack of continuity of care. We never include any of these HIDDEN costs in evaluating our nation's health costs because they are difficult to measure"yet they exist and we all pay for them.

Healthcare costs can be drastically reduced and patient care improved if we each manage our OWN healthcare, tweaking the free market system to achieve our goal, with government assistance but without medical transaction direction from insurance companies, government or employers.

Alan Scharf is a CPA and Wharton School graduate specializing in strategic planning and execution. He has written a detailed plan for revolutionary healthcare reform and seeks support in getting it enacted. His email is abscharf@bellsouth.net