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General Healthcare template

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Message Matthew UTae

I've been challenged to provide a solution to the healthcare issue by a commentor from a previous article.  What kind of solution are you looking for?  One that addresses the problem of rising healthcare costs? One that addresses the moral issue of healthcare delivery & entitlement?  People blame "insurance" a lot, but what they seem to be blaming is actually "inequity in healthcare delivery".  What is the problem that you want my opinion on?  "The broken healthcare system" is the problem, but which specific issue of the general problem are you concerned about?  Egalitarian distribution doesn't solve the problem of rising costs.

I've expressed my views in other articles.  I have not submitted a full template, and no ONE (wo)man is equipped to do so.  But in an effort to try to answer the request.  I would favor a German style system or baseline single payer system in hopes that they will be better formats to address the cost drivers of an unhealthy population and equitable distribution of new technology.  Note, this does not address rising heathcare costs; but hopes that a better environment to address those costs is put into place.  In actuality, we're talking about a makeover of healthcare delivery, which may also have the effect of alleviating costs a little bit. 

I would favor having a choice of taxpayer funded HMO's, each HMO will have a different level of management...i.e. what is considered "medically necessary" and by whom.  Each HMO would pay doctors out of their established fund.  Each fund would recieve taxpayer money based on the taxes charged per fund.  An HMO that provides a higher level of coverage would recieve more revenue per participant.  More on this later.

Those with looser restrictions will cost more as they will need to add a premium for the costs of looser restrictions.  Additional supplemental insurance will be available on the private market.  Its not much better than our current system in curtailing costs,  It does add increased transparency of the HMO adjudication procedures so hopefully people don't feel so wronged.  Informed choice makes for less anger.  In speaking to the average person, I have a feeling most people are not informed purchasers of health insurance and health care.

Addressing transparency:  Right now, one HMO contract is not much different from every other HMO contract within the framework of each state's laws.  The American people have decided, they want HMO's.  Most people when given the choice between an HMO and the freedom to choose their own care, they choose the HMO because it comes at a lower premium.  What gets me is that when people make this choice, then complain and blame others for the choice they made themself.  Although, maybe it wasn't an informed choice or that the choice was a financially forced choice.  It's financailly forced because the high cost and unaffordability of the non-HMO for most people.  This criticism should be directed at rising healthcare costs moreso than our healthcare distribution system.  If you seek to make the non-HMO affordable via the distribution system, your asking for unreasonable subsidization.  I feel people have a right to some healthcare, but people don't have a right to be subsidized.  People may have a right to "basic healthcare", but not subsidization beyond what we the people designate as "basic healthcare".

I believe we should implement baseline coverage.  Minimum mandated coverage would be in the form of HMO 1.  You could pay more for HMO 2.  More for HMO 3, and so forth, Each HMO must give an honest effort at explaining healthcare management procedures/consequences.  Right now, these explanations are more to prevent litigation than clearly convey the procedures. The government would have to regulate this to make sure that the number of HMO's allowed was prudent based on differentiation, and that enough information is provided if the HMO's were to be privately run.  Of course, the government could run the HMO's as well.

A quick review: I'll explain how a government run HMO might differ from what the U.S. currently designates as an HMO.  Currently, in the U.S., an insurance policy that covers you via a HMO format asks you to choose a primary care physician.  The insurance company pays the doctor a monthly fee to serve as your primary care physician and to "manage" your health.  He is paid this monthly fee regardless of your utilization.  This payment arrangement is due to the fact that 5% of the population drive 75% of costs, that stat may be represented differently, but there's concensus that a disproportionate minority create most of the demand for healthcare.  In other words, you have a minority that demands the most healthcare.  Since employers must insure some high utilizers via group plans, we have the creation of HMO's.  If you applied for individual insurance, you would be outright denied.  Employers and employees want HMO's due to their relative cheapness in comparison to the alternatives.  Why an HMO?  The primary care physician's job is to prevent you from becoming one of the 5%, aka, high utilizers.  Tons of research on how to identify & treat high utilizers exist in the medical community.  What the percieved problem seems to be is that there is collusion between the insurer and the doctor.  If the doctor denies more care, the more he'll be compensated since he is "managing cost".  This isn't the idea, its to manage care, not costs.  This may or may not be true, lots of regulation out there to prevent this.  Doesn't mean that a doctor won't get an addition built onto his house somehow. 

Anyway, lets say you have an honest doctor and he wants to get you "extremly expensive RX A".  The insurer denies the claim and says it will  cover RX B.  The HMO legal contract probably won't help you as the insurer is usually the one who writes that agreement.  The doctor must explain to the insurer why "extremely expensive RX A" is required to prevent you from becoming one of those dreaded high utilizers who drive costs AND why RX B is insufficient to achieve this goal.  Some states empower providers in this argument, some do not.  For example, in some states, if your doctor writes "dispense as written" on an RX or checks the "DAW" box, the insurer must dipense. 

The government system: Lets go with hypotheticals.  To simplify the task of explanation, lets say that the governement runs all operations for all HMO's.  Lets say the the HHS secretary created 8 different HMO's.  Why 8?

Lets get into that.  Why 8?  Why not 10?  Why not 4?  Heck, states could run them.  I'm not sure what a good number would be, but lets see what distinctions warrant another HMO option for people to purchase into.  I'll do this by example.  I'll talk about 3 of the hypothetical HMO's and how they operate:

HMO 1 = baseline coverage.  You will automatically be enrolled in this option if you do not declare a choice.  You will pay 10% more in income tax.  Or, to pass it thru congress, 10% more in income tax up to a maximum of $X.  Or, you pay $X dollars per month.  This HMO will look a lot like the HMO I outlined here:  Doctors will have no restriction on the number of HMO 1 participants they can have on their roster.  Each participant will net a monthly payment of $100.  A huge booklet about claims adjudication will be available.  This HMO will be limited to technologies and best practices procedures from...oh...lets say 10 years ago.  Additional private insurance cottage industries would probably pop up to cover cost requested that are newer than 10 years ago, as this will be a big issue.  Some people will claim the government is letting them die.  What will probably be necessary is a list of "miracle" procedures/drugs available to everyone.  This list would include drugs like Gleevec for lukemia, the rare miricle drugs (like pennicillan back in the day).  If a procedure will increase survival rate by "X", everyone will have access.

HMO 2 = Same payment as HMO 1 plus an additional 5% income tax.  Wealthy people will probably want "an additional $X" instead of 5% income tax.  Anyway, this will also have a huge booklet about claims adjudication, but you'll notice some that more care will be granted.  There will be less requests to substitute treatment A (which is the one you want) with treatment B (which is what the government/HMO 2 fund manager wants).  Doctors get compensated $175 per HMO 2 participant on their roster.  This HMO will be limited to technologies and best practices procedures from...oh...lets say 5 years ago.

HMO 3 = Same payment as HMO 1 plus an additional 10% income tax.  More care is granted without review.  Doctors have a limit on how many HMO 3 participants they can have on their roster.  Doctors get compensated $250 per month for a HMO 3 participant.

I would also add "PPO fund 1".  Which would essentially be a very expensive personal choice plan.  You choose the care you want; minus elective surgeries and other OBVIOUSLY non necessary procedures that don't promote health.  This list would be shared amongst all the plans.

An important footnote, the income tax funding method is preferred IF your primary concern is egalitarian access to care since.  The flat dollar amount is preferred if your concern is the fiscal solvency of the fund.  For example, if you only had the poorest people entering HMO 3, at the rate of 20% income tax, that would not be enough money to provide the promised benefits.

Adjudication is a hard thing to do.  We can only have so much information available.  "Gaming" of the system will occur.  For example, I can enter into collusion with my doctor to try to get me an elective plastic surgery under the guise of medical necessity.  "I need a nose job because I can't breathe at night.  My doctor says I may die from sleep apnea."  Although the doctor won't be paid more, he may just be a nice guy who wants you to be happy and confident.  He may think your nose is really ugly.  He may go along with it because he feels that your mental health will improve.    

What worries me is that a government run system is not a fundamentally more honest healthcare system.  We can regulate written documents, we can't regulate responsible ethical behavior.  Heck, look at our treasury department policy for the past 30 years!  Look at Fannie & Freddie.   The government sometimes subsidized irresponsible behavior.  You may or may not have a reduction in litigation. I think it will probably stay the same.

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