We need a bridge between Republicans, who oppose more government interference in our lives, and Democrats, seeking universal healthcare coverage for all. This plan eliminates employer based plans, which prevent free choice, and uses the free markets with regulation to control costs while utilizing Wall Street and the insurance industry to fund the securitization of healthcare costs on a global, not individual medical transaction, level. There is free choice, no insurance company intermediary, no new federal bureaucracy in the plan and it also provides banks with a new business segment. The plan is cost efficient and provides flexibility to increase or decrease funding, via deductibles and tax credits to meet a targeted federal budget, depending upon the economic state of the nation. Healthy outcome incentives may be superimposed upon the plan to provide encouragement to providers and patients and further reduce our healthcare costs. And technological and other clinical cost saving measures would be completely compatible with this plan. Features in the plan take the best from conservative and liberal platforms, which should satisfy both political parties.
We must change the way present insurance, public or private, is used to micromanage each medical transaction's costs, as it only results in rationing of services coupled with poor quality of care. The present business model will never work and substituting "managed care" government insurance or cooperative "managed care" for private insurance will not fix it. What WILL work is the 'revolution' proposed in this plan.
The following is a road map for terminating the present dysfunctional healthcare system and creating high quality universal healthcare for all Americans in a cost efficient manner:
- We need more American trained doctors to reduce costs and increase supply, which will increase the quality of healthcare
- Dramatically increase the number of medical school attendees
- Eliminate unnecessary barriers to entry to medical school. Many medical school required undergraduate courses have little bearing on the quality or knowledge needed to be a doctor. Such impediments have kept excellent potential doctors from entering the field.
- Test students with the aptitude and interest in becoming a doctor. Put them in a curriculum that fast tracks courses needed for medical school and eliminates courses not needed for this purpose, saving time and money to cultivate a doctor.
- Eliminate the 24 hour shift and other antiquated rules imposed on medical students and residents, which serve no purpose but may alter the path of a potentially good doctor.
- Increasing the supply of doctors will reduce or eliminate the need to source foreign doctors to fill our healthcare needs.
- Do the exact same things listed above for nurses to increase their numbers.
- Medical professionals would be paid market rates for their services so that so that a shortage of doctors in one practice area will be supplied by market forces.
- Quality and continuity of care from medical professions has decreased significantly as time spent with patients is minimal due to financial pressures of the present healthcare system. This has affected the health and well being of every patient in one way or another via errors, misdiagnoses or stress to the patient who cannot get the time of day with his or her doctor and has become a number, not a person, in the scheme of things.
- Hospitals and Clinics need to be regulated like Utilities in the Public Interest
- Charges for drugs, tissues and a toilet seat cover may be ten times higher than the market cost when a hospital charges for these items.
- Charges for use of an MRI or surgery room are disproportionate to a reasonable return on investment for the real estate and the equipment used.
- Just like a utility, hospitals and clinics should be allowed to make a regulated fair return on investment but no more. They would remain privately owned entities. Certainly, one's healthcare costs at a reasonable price areas much a right as one's right to reasonable utility charges for heating one's home. Since like utilities, hospitals are licensed by the state and, in addition, are limited in numbers of beds permitted in a community, a resident of that community has little choice, if ill, other than to go to the psuedo-monopolistic owner of the hospital beds in his or her community. And with only a handful or large chain owned hospital owners controlling our emergency rooms, hospital and clinics around the country, regulation is imperative. Penalties would include return of annual excess permitted earnings to those who paid them that year.
- Licensing of hospitals and beds should be granted based on objective criteria such as existing beds per capita in a community, not politically granted.
- To improve quality of care, we must end the practice of hospital owners hiring contracted nurses that rotate every day so patients do not get a nurse that stays with them and knows their particular medical and emotional needs in depth. This has resulted in poor quality of care and higher costs resulting from worse outcomes. A regulated hospital would be required end this practice.
- Drug Company revenue business models must change to contain costs
- Costs of drugs need to be contained by opening up competition to the American drug companies such as foreign drug access.
- Drug companies should be made competitive by changing the monopoly they have on producing drugs that they patent. Any drug company should be permitted to pay a royalty, say 5%-20%, depending on type of drug and remaining useful patent life, to the patent owner to manufacture any drug. This will end the monopoly of drug companies to manufacture and sell all drugs it researches and patents. At the same time, the royalties will justly reimburse the patent holder its research costs and provide a profitable return on its investment from manufacture of its own drugs as well as royalties from others. Patients should benefit from this business model change in drug production.
- Drug companies should be given a choice to maintain a longer patent term if they reduce prices substantially during the original patent term for popular drugs like statins, diabetic drugs or others.
- Alternatively to increasing the patent term, drug companies should be given another option of receiving unlimited royalties on generics introduced after patents expire, if the drug company reduces the cost substantially during the original patent term.
- US government volume guarantees on certain medicines would be used to extract lower drug costs from manufacturers for all patients. Private pharmacies would issue all prescriptions and inventory the drugs so no drugs would be handled or owned by the US government. Charges would be made to each patient's National Health Credit Card.
- Eliminate third party "managed care" insurance intermediaries
- The administrative costs added unnecessarily to the present healthcare system are bankrupting it. Stopping these inefficient attempts to manage each medical transaction could save 25-40% of the cost of medical care. Why? Because in addition to the administrative overhead cost savings at both the insurance company and medical offices, the insurance company profits eliminated will not need to be included in calculating the comparable cost of healthcare when provided by the proposed universal plan. For example, United Healthcare in their SEC filed 2008 Form 10K and Annual Report, showed premium and service revenues that could have been reduced between 2006 and 2008 by 23-25% (gross profit) if these were to cover only the medical costs they paid within these years. In other words, the premiums actually charged paid for more than medical costs; and in the proposed universal healthcare plan, health costs could decrease by these amounts which paid for overhead and profits at UnitedHealthcare. This does not include inefficiencies and added administrative costs at the doctor's office or in lost patient wages as patients try to deal with the present bureaucracy... nor does it include the medical cost savings that should result from other suggestions outlined in this paper.
- The present blocking of benefits and arbitrary payment for services by insurance companies results in:
1. Poor quality of time with the doctor for the patient as doctors are paid by number of patients seen, eliminating incentives for high quality care, which has sent some frustrated doctors into concierge medicine.
2. Patient out of pocket costs that have bankrupted families because while the patient believes he/she has contracted for a policy limit on out of pocket costs, including deductibles, they come to find that they have exceeded deductible and out of pocket advertised limits due to legal loopholes in the insurance contract which allow claims to be paid based on usual and customary provider costs, as the insurance company defines them. This problem is inherent in every health insurance contract involving medical transaction management, which is why eliminating the present system is necessary.
- Preexisting conditions presently block those who most need coverage from getting it and as a result the insurance companies skew coverage toward healthy customers. This problem must stop.
- Limitation in the choice of doctors is an absurd result of the third party insurance system. It must be ended so each person has freedom to choose his or her doctor, generalist or specialist with no one's approval needed. This will end the issue of continuity of care whereby one has been forced to change doctors that are not providers under a newly adopted insurance plan.
- Eliminating third party insurance intermediaries will cause the demise of the employer-employee connective relationship with regard to healthcare. This connection resulted from tax law changes years ago and is partly responsible for our present problems. Choices of insurance companies and premiums have been forced on employees, resulting in terrible and often minimal coverage for workers. Premiums paid by employers for employees should be added back to the employee's wages, by law, to compensate for the benefit lost by the employee. To keep employees status quo taxwise, employees would be exempted from income taxes on these "added back to salary" benefits.
- Replace the present third party insurance system with one that has the patient and doctor (or hospital or clinic) negotiate the cost of services directly.
- Direct payment by the patient to the doctor will keep costs lower as the doctor will not have the added costs of administering a third party insurance reimbursement; these savings can be passed on to the patient in lower fees.
- Doctors (or hospitals or clinics) and insurance companies will no longer play pricing games with service fees to influence the amount of "reasonable and necessary" and "allowed" reimbursements from insurance companies. Patients have been misled into thinking they have a policy with out of pocket and deductible limits only to find insurance companies and doctors trying to bill the patient additional amounts to cover service fees not fully covered by reimbursements to doctors (or hospitals or clinics) from insurers. This is a trap perpetuated on patients by a system geared toward convincing the patient that he or she is covered in full when the healthcare policy has loopholes that boost the actual costs to the consumer, sometimes to the point of financial collapse. Transparency between patient and doctor will end this problem.
- Doctors have opted out of family practice to focus on specialties due to the financial disincentives caused by the present insurance system. Dealing directly with patients without per capita insurance incentives and without the administrative insurance nightmares that exist, more doctors should enter or remain in family practice. The shortage that now exists in the number of family doctors has resulted in large numbers of patients having to deal with fewer of these first line of defense doctors.
- The personal relationship between doctor and patient will allow for the doctor to financially accommodate the patient in certain circumstances, such as volume visit discounts or some other arrangement.
- The patient will have a vested financial interest in controlling costs and holding the doctor accountable for unnecessary charges. Under the present system, this does not occur properly as the insurance company drives prices and payments without direct knowledge of care quality or outcomes or patient input.
- Doctors, hospitals and clinics will be required to post fees for various services in a transparent system to allow the patient to know exactly who charges what price and this will encourage competitive pricing choices. Fees for services will be the same for each patient and not be discriminatory. Patients that cannot afford the fees will be addressed within the universal healthcare plan and not at the medical provider level. No longer will one patient pay one fee and another pay a higher fee for the same service, an immense disruption to a fair and efficient system of healthcare.
- Ensure that patients pay only for all out of pocket medical costs above an annual deductible amount, established by taxpayer income and family size and number of medical transactions. Use tax returns filed with IRS to reconcile annual medical costs. Use a new National Health Credit Card issued by banks on behalf of the US government to charge all medical costs.
- Doctors, hospitals and clinics and pharmacies will break down medical costs into types:
1. Elective, not medically necessary
This will facilitate tracking of costs and reimbursements. Further refinements are possible. For example, the cause of the medical cost, such as diabetes, cancer, a cold, etc. could be a tracked subcategory of each type of cost above.
- Patients will carry a National Health Credit Card which will do two things.
1. Track medical costs by type with charges paid at point of service on a regular credit card machine. The credit card will be issued and processed by banks for the US government, which will pay providers for all medical costs in excess of the deductible and hold the debt receivable, which would be owed by the patient/taxpayer.
2. Carry medical records of the patient in a separate corner of the card to enable scanning of these medical history records anywhere in the world. This use may need to be implemented sequentially after the credit card is in use first for a year or two.
- Every month the patient/cardholder will receive a credit card bill. All amounts on the credit card must be paid in full on a timely basis until the full deductible amount is reached within each month, after which, no payments need be made until the annual reconciliation at year's end, when the annual IRS Form 1040 is filed. Normally no payments will be due at that time.
- The annual deductible will consist of two elements:
1. Fixed Deductible Amount, which limit will not change within the year.
The annual fixed deductible amount should approximate the annual amount
that would otherwise be paid under the current healthcare system for
premiums and deductibles but adjusted downward for cost savings