The TRUTH about Obama / Trump Care (Part Three - Conclusion)

In Part 1 of this blog, I described the parts of Obamacare that ARE working.  

View Part One Here: https://scottmcmurrain.blogspot.com/2017/03/the-truth-about-obamatrump-care.html

In Part 2 of this blog, I outlined where Obamacare falls short and is in desperate need of repair.

View Part Two Here: https://scottmcmurrain.blogspot.com/2017/04/the-truth-about-obama-trump-care-part.html

In Part 3 of this blog, I recommend SOLUTIONS.  Anybody can complain about what is wrong with the system, but any solution needs to start with some fresh IDEAS, and here are mine.

NOW, PART THREE

Both of above parts were researched, and were factual, unbiased reports.

In this final part, however, I am offering my OPINION on how this system could be fixed.  I am not naive enough to believe a system this simple would solve all of the problems, nor I am naive enough to believe any of our current politicians have the will power to even suggest such a system.  But I am offering my ideas as a starting point for a discussion, with the hope that the will make sense to enough readers that maybe, just maybe, some real solutions could be reached.

SIMPLIFICATION

Right now, we have way too many different health care systems in place. Each state has its own Medicaid program. Elderly people are covered under Medicare. The military has its own network. Veterans have a complete ecosystem of their own. The CHIP program insures children at risk. Employers buy group insurance for their employees. Obamacare regulates individual policies and is intertwined with all of the other systems as well.

I propose we eliminate ALL of them and replace it with the system such as outlined below. This would greatly reduce government bureaucracy. It would vastly simplify the entire system.

Every American citizen would be automatically covered. This will eliminate the entire bureaucracy that currently is needed to determine individual eligibility for millions of Americans. That alone will save billions of dollars!

LEVELING THE PLAYING FIELD

The first thing we need to do is fix the pricing and billing systems used by the medical industry. I propose that every provider must maintain a price list for its services, and everyone must be charged the prices that are on the list. However, providers would be allowed to provide any service to anyone without charge at any time. They would also be allowed to discount their prices for no more than 15% of their customers in any given year. This would allow them to service those who truly could not afford to pay while still requiring them to stick to standard prices for everybody else. If they were allowed to discount to everybody, the standard prices would become meaningless.

I believe in the free market, and want to keep it intact as much as possible in the health care industry. Where there is adequate competition, the providers should be free to set their own rates. This would include almost every doctor and small practitioner. Where they is no adequate competition, prices should be regulated to be equivalent to other jurisdictions where adequate competition exists, taking any local variances into consideration.

Since the medical providers must make their prices standard and transparent, market forces will prevent them from overcharging, but would still allow more talented and experienced providers to charge more than younger, less experienced ones.

Next, we need to get rid of the system where everybody and their grandfather sends you a bill whenever you go to the doctor. That’s ridiculous. No other industry does this. When you take your car in for repair, you pay the repair shop and driver your car home. You don’t get a separate bill later from the transmission shop, the radiator shop, or any other company you have never heard of.

If a doctor orders a lab test, then the lab must bill the doctor. The doctor may then add this charge to your bill without markup, providing he has quoted you a price and obtained your authorization prior to ordering the lab work.  (This requirement would be waived in emergencies where prior obtaining prior consent is not practicable.)  The labs, like all other providers, can set their own prices, but must publish this price list and charge all customers the same price. If a doctor owns 5% or more of the lab, he either must give the patient the option (and prices) of an additional lab so that the customer may choose, or he can charge the patient the average price for such lab work as determined by the government. Lab tests that are performed outside the doctor's office, prescription drugs, and equipment costs would still be paid directly by the patient.

Last, but not least, are drug companies and medical equipment providers. They present a different issue, since many of them have no competition, especially when they are marketing a new drug they developed. Once again, I want the free market to prevail as much as possible. So I would allow them to set their own prices, but still require them to charge U.S. customers no more than the average price they charge customers anywhere else in the world. In addition, U.S. Customers would no longer be prohibited from purchasing drugs from outside the U.S.A. if they can get a better price.

PAYING FOR IT

To prevent abuse, all patients need to have some skin in the game. They need to be responsible for their own expenses within the limits of their income.

I would propose a single payer system that would work as follows:

(1) The Federal Government would establish base prices for each type of service based on the average prices charged in each area. The Federal Government will pay for 80% of this price, or 80% of the actual cost, whichever is less. If a provider chooses to charge more than the “standard” price, then the patient will be responsible for that part of the bill in addition to the 20%. This will provide incentives for doctors to keep their prices down, but will allow those in demand to charge more for their services. The Free Market will return.  This includes costs for drugs, external lab tests, equipment, and transportation charges.

(2) Each person, or family, will have a maximum out-of-pocket expense not to exceed 10% of their income each year. Once that is reached, the Government will pay all costs, including any excess charges over the standard should they choose a more expensive provider, which could easily happen when a top-notch surgeon is needed for an extreme case. A medical disaster should not be a cause of bankruptcy!

(3) People will no longer have separate health-insurance premiums. Health-care costs will come out of the General Fund. Of course, Federal Income Tax rates will have to be increased to cover the costs, and it will be up to Congress to set the rates and the brackets.  But without the health insurance premiums to pay, the average taxpayer should SAVE money even after the income tax increase.

It is important to realize that this is a single PAYER system, NOT a single PROVIDER system. The doctors, hospitals, drug companies, and equipment suppliers will be independent businesses just as they are now. They will NOT work for the government, and are free to run their businesses WITHOUT GOVERNMENT CONTROL, just as they do now, except for the new pricing polices described above.

COVERED SERVICES

All medically necessary services will be covered, including dental and vision services, and pre-existing conditions do not matter. Elective procedures, including abortions, would NOT be covered. Contraceptives would be covered. ONLY U.S. citizens would be covered, except for Emergency Services. Legal immigrants who have a job here and pay taxes would also be covered.

THE TOTAL COST

Of course, the CBO has not scored my plan, either.  So we don't know the total costs of the program. But since this program addresses the COSTS of the actual services rather than who pays for them, the total cost for health care in the U.S. should go DOWN under this system, especially when you consider than insurance companies will no longer be taking up to 20% of the costs right off the top.