Want to Fix Healthcare? FIRE the Insurance Companies!

Mike Kersmarki
Jul 28, 2017 · 9 min read
Show the Door to Health Insurers!

You’re FIRED!

THAT’S what we need to tell the health insurance companies.

It’s the ONLY way to fix a monumental mess that took generations to create.

Insurance — either private or by the government —simply isn’t working anymore.

In its place, we need to construct an affordable system guaranteeing healthcare access to each and every American while also enabling people from all walks of life to pick their own doctors and hospitals.

How?

Well, the answer sure isn’t throwing tens of billions of dollars at Obamacare by picking the pockets of taxpayers to bail out the insurance companies.

And it certainly isn’t Sen. Bernie Sanders’ single-payer hell of complete control by Washington via his proposed Medicare for All.

“In practice, a single-payer system would cost more than the most efficient and effective programs that exist today, all while compromising access and, over time, quality.”

POLITICO: Lawsuits could force feds to pay Obamacare insurers

FOX NEWS: A health care bailout for insurers paves the way to single-payer

KRAUTHAMMER Warned Us Back in 2014 That Obamacare Had a Hidden Insurance Company Bailout

Clearly, the time has come to try something new.

Sen. Lindsey Graham’s proposal to replace the Affordable Care Act with block grants to states isn’t revolutionary, but maybe it’s a good first shot. Maybe Graham could even gain support from his pal Sen. John McCain, enabling McCain to actually keep his word on repealing and replacing Obamacare.

Ultimately, though, taking an entirely new approach would save money, create far more competition and actually minimize the federal government’s role, making it more of an auditor than an omnipotent overseer.

More important, this alternative would simultaneously put more power in the hands of consumers and physicians … WHERE — IT — BELONGS.

Imagine that; enabling a true doctor-patient relationship while completely eliminating an onerous middleman, the health insurance companies.

The concept is simple enough, though, as always, the devil will be in the details.

Then again, this is the United States of America. We split the atom. We sent men to the moon. Our microchips revolutionized EVERYTHING.

Heck, we’ve become advanced enough to even manipulate DNA at the very core of life itself.

So don’t tell me we can’t remake our healthcare system to better serve ALL Americans.

It’s too important to our economy and our nation’s future to keep kicking this can down the road.

Consolidate Federal Payments for NEW Approach

One way to fix this would be to simply consolidate and reorient the money we now spend on a variety of federal programs — Medicare, Medicaid, CHIP, Veterans Administration, etc. — while also ELIMINATING the tax break that companies use to provide employee health insurance.

The United States already spends more than $10,000 each year for every man, woman and child to provide healthcare. That’s more than $3 trillion dollars spent annually for all of the separate federal programs, corporate tax breaks, insurance premiums and other expenses related to healthcare.

We could re-channel a portion of that money — say an average of $2,000 to $3,000 per person — and instead have the federal government make direct annual payments (perhaps quarterly) to physicians based on their number and types of patients each year.

Then, physicians would be required to use a portion of those funds annually to join a hospital group to be used by their patients.

Some more altruistic physicians might even divert an additional portion of this federal subsidy to more than one hospital group to create value and choice for their patients.

While that might impact a physician’s bottom line, it also could boost income by expanding the patient base and make their practice more efficient and profitable. This could even increase the value of their business and lead to mergers with other medical groups.

Instead of running from capitalism, as the Congress so often seems to do, this market-based approach would truly offer competition AND choice to benefit patients, physicians and the American economy.

Ultimately, this would create a system in which various hospitals would have to compete to sign up doctors to obtain revenue from all of the patients within those physicians’ practices.

This would potentially lead to even more value for patients because hospitals would likely be prompted by the marketplace to offer more services in the competition to obtain all of the patients within a particular doctor’s practice.

This system also would mandate physicians and hospitals to list accurate charges for their various services not covered by the basic federal subsidy, helping consumers to find a hospital offering the best quality and value.

Patients would decide each year whether to stick with their current physician or choose another doctors group that competes to induce them to switch by offering more benefits, better hospital affiliations, etc.

Physicians and hospitals would gain dependable annual revenue streams and even enhance the continuity of those funds by offering more incentives to sign patients to longer two- or three-year agreements.

Feds Pay for Minimal Coverage. Consumers Pay Rest

It’s important to also emphasize that this would create a MINIMAL level of care — trips to the doctor, blood tests, x-rays, emergency room visits, hospital stays — to ensure access to the nation’s healthcare system for ALL Americans.

Hospital groups would need to state up front what types of services would be available — and their limits — so patients could decide which doctor-hospital affiliation best suits their needs.

Additional benefits to supplement the basic federal subsidy could be purchased by consumers based on their individual requirements. No one family situation is the same.

That would be true, market-based healthcare.

This also could induce physicians and hospitals to compete for more revenue from this private galaxy of tens of millions of mostly middle class patients.

Companies, which would no longer have a federal tax deduction available to provide healthcare coverage, would have to decide if competitive pressures for labor would still require supplemental health coverage for their employees.

In this scenario, companies and hospitals could negotiate the level of supplemental coverage to be funded by the corporations and/or employee payroll deductions.

Entire industries might even want to reach regional or national agreements with hospital groups, enhancing health coverage for their employees. Companies even could offer a base supplemental plan for all employees and then offer the choice to pay additional fees for more comprehensive healthcare for their families.

Employees and their families then could choose whether to participate in such corporate supplemental plans or whether to align themselves with any larger associations they or their families might be eligible for.

Or they could choose from more than one employee or outside association plan, depending on the program that’s best for them.

The extent and variety of these potential supplemental associations could be almost limitless, from credit unions to farmers groups to the AARP.

By leveraging the membership of large associations — some with millions of members — consumers could gain even more benefits from hospitals and physicians groups.

Drug prices also could be lowered by using such association pooling arrangements to bargain with pharmacies. It’s a concept similar to what Sen. Rand Paul proposed earlier this year for health insurance.

And just like hospitals and physicians, pharmacies also would have to create some type of price list so consumers could make informed choices. All would be subject to periodic audits to minimize fraud.

Individual states also could decide whether or not to offer their citizens supplement health benefits by negotiating with hospital and physician groups within their respective states.

That’s the beauty of such a new approach. Each state could choose what to do for their citizens and not have their hands forced by mandates from the federal government.

Voters in each state would elect officials who supported or opposed using state tax dollars for such supplemental healthcare benefits, or some combined approach that also empowered associations within a particular state.

And if any person ignores the registration process or otherwise chooses not to participate, a physician and hospital group would be appointed for them.

Then, for instance, if someone who didn’t pick a plan shows up to an emergency room with a relatively minor injury or non-emergency condition, the hospital could simply direct that person to the doctor in charge of their care. Or, once a patient’s emergency was stabilized, transfer them to the hospital within their group.

There might even be an option for some hospitals to pursue large numbers of these so-called non-participant patients. This might create a financial incentive for a physician or hospital group to create satellite in-patient facilities that primarily rely on initial care from physician assistants.

Eliminate Middle Man: Fire Health Insurance Cos.

Whatever approaches are taken, the nation’s healthcare system would become more streamlined and less expensive by eliminating a health-insurance middleman that drains billions of dollars from the economy with a return on revenue that is the envy of most other industries.

How perverse is a system in which health insurance providers have a financial incentive to delay or deny payments to physicians and hospitals?

Of course, larger per capita payments to physicians would be needed for older Americans, veterans and other groups shown by actuarial tables to need more healthcare. By contrast, per capita requirements for children and younger adults could be lowered since they generally have less of a need for medical services.

The actual amounts paid to cover each American every year would, of course, be determined by Congress and could be periodically revised according to both need and political realities.

Of course, it wouldn’t be a perfect system.

For one thing, it would take years to phase it all in just to train enough physicians, physician assistants, nurses and other med techs. That’s one of the major flaws of Obamacare, which simply waves a magic wand to place millions of people in Medicaid without enough physicians to go around.

And a strong audit system would be critical — with real teeth for criminal fraud prosecutions — to minimize potential corruption by physician and hospital groups.

There also might be a need to develop a system that is somewhat less market-based for smaller towns and rural areas that are dominated by just one hospital system, a situation that generally inhibits competition.

Regardless of the potential problems, such a system of direct federal payments to physicians (and indirect payments to hospitals) would be flexible enough to enable continuous improvement.

More important, EVERYONE would eventually have access to healthcare.

Foolish To Tweak Failed Obamacare or Copy Others

The bottom line is this: we must step far beyond the status quo, or simply re-doing tired, outdated ideas.

Aren’t we fed up with Washington making things worse, year after year after year?

Just tweaking failed programs or copying the mistakes of someone else in Europe or Canada surely fits the common definition of insanity: Doing the same thing over and over again but expecting a different outcome.

We must also get a handle on medical expenses that are spiraling out of control. America will surely become bankrupt if we remain addicted to the whims of our health insurance overlords or spendthrift members of Congress who’s only answer is to spend more of other people’s money.

It’s not as if taxpayers keep getting a lot of bang for their hard-earned bucks here.

We keep exposing ourselves to a malevolent monster that fattens itself on an endless supply of federal and state tax dollars while starving patients — especially those on Medicaid or even veterans — with less value and lower quality.

In fact, American healthcare has become one of the most bloated, grossly inefficient, fragmented and convoluted creations that the minds of generations of incompetent politicians could possibly have created.

And let me make it clear: Obamacare didn’t create this mess.

But the Affordable Care Act’s almost irrational conglomerations of new regulations and taxes made things worse, much worse. For instance, why in God’s name would you tax someone because their insurance is too good?

Oh, sure, something like 20 million more Americans now have health insurance. But this was accomplished by dragging down the system for just about everyone else AND adding millions of people to Medicaid, a program that doctors have been fleeing in droves.

On top of that, Obamacare still doesn’t cover more than 30 million people.

Surely we can come up with a system that provides at least basic access to our nation’s healthcare system while also allowing people to purchase more coverage if they want it.

This proposal is by no means a complete solution and will need plenty of study. For instance, special considerations probably will be needed to ensure sufficient healthcare access in rural areas.

And there’s no doubt that such a quantum shift in how we manage healthcare would need to overcome almost insurmountable political obstacles, ESPECIALLY from the health insurance industry.

But whatever the final answer is, we need to fix this damn thing.

Enough, already!

Mike Kersmarki is an author in Tampa, Fla. He currently is writing a domestic policy book: “Worker’s Party: How to Help ALL Americans Achieve Their Full Economic Potential.”

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