Read NY Times panel’s discusion of ‘America’s Health Care priorities’

The Economix Blog at http://www.nytimes.com has invited health care wonks to offer six suggestions for improving the health insurance and health markets.

So far, Economix has published a pretty good cross section of ideas.

Here is how I would answer the question:

 

Health insurance can be made more affordable for the privately insured, and the 6 million to 8 million uninsured American citizens who can‚Äôt afford health insurance and aren’t eligible for existing government programs. Health markets can be fixed for a lot less than $1.6 trillion trillion over the next five years.

There are six changes in America, the health markets and health insurance markets that can vastly improve our health and slow the rate of increase in health costs and expenditures:

Take politicians and employers out of the health insurance markets, which they have managed to distort to the detriment of every American. Politicians respond to political pressures from special interests and campaign contributors, not to the needs of consumers. Employers select insurers and health plans for their workers that help them maximize profits, not serve the health insurance needs of their workers. Let workers buy insurance directly from insurers, not through employers. This would allow workers to change jobs without losing their health insurance. As a result, workers would climb the income and career ladders faster, which would make it easier for them to buy the insurance they want and need. Individual policies should be community rated by insurers. State insurance regulations should be pre-empted by federal laws that require each insurer to create state, regional or national risk pools for everyone rather than small groups. Individual and small group medical risk rating should be banned. This would raise premiums for the young but lower their premiums as they aged and became higher cost medical risks. Community rating is not socialism.

Fix education in America for all age groups. Teach kids to read and write and to analyze problems. Make good nutrition and exercise habitual at early ages. Use multi-media to promote healthy lifestyles and personal responsibility. Use multi-media to convince the producers of foodstuffs and operators of restaurants that it is unethical to make and serve unhealthy foods and drinks. Employ professional heath educators to counsel and teach healthy lifestyles. Take costly physicians and nurses out of the prevention and wellness business and let them focus on delivering acute medical care. This will both reduce the cost of health training and relieve physician and nurse shortages. Finally, show Americans that it is unethical to sue providers for making human errors ad opposed to being criminally negligent. Cap malpractice payments to plaintiffs and their lawyers.

Require everyone to buy high-deductible catastrophic health insurance and some kind of long-term care insurance that would cover chronic illnesses and permanent disabilities caused by addictions and accidents. If everyone bought real insurance, premiums would be contained. Pre-existing conditions would no longer be an issue. And insurance market regulations could ban health insurance pricing designed to drive sick people away. Insurers no longer would be able to cherry pick low-risk customers. Preventive care and wellness care make health insurance much more expensive than it should be. It makes no sense for us to pay insurers 15% to 25% more for preventive and wellness insurance than it would cost us to buy those services with our credit cards. It is not the government’s job nor the jobs of employers and insurers to force us to buy preventive and wellness services. Paying insurers for preventive and primary care is like paying a bank 20% interest to hold our money until we spend it on an oil change for our car.

Regulate health insurance markets so that insurers compete based on their ability to control administrative and marketing costs. Give them financial incentives to control those costs and negotiate good contracts with providers without imposing the onerous HMO-type gatekeeper rules of the 1990s, which are in the $1.6 trillion Kennedy bill. No matter what health insurance reforms are achieved, there will be administrative costs. These costs include claims processing by providers and insurers, the cost of negotiating and enforcing contracts with providers and other suppliers, the cost of preventing fraud and abuse, marketing costs and the cost of providing customer service. Medicare’s administrative costs look cheap, but they aren’t because Medicare shifts those costs to providers and then reimburses providers for their administrative costs. Insurers’ net profit margins are so small that they’re barely worth discussing.

Use evidence-based, cook book medicine where appropriate. I think the literature shows that less than 50% of symtoms can be addressed by evidence-based treatments. The human body and mind are so complex that not every illness can be treated based on evidence and guidelines. Just as it is important to be honest about the effectiveness and workability of evidence-based medicine, it’s important to be honest about the cost-effectiveness of electronic medical records and efforts to measure quality, which are much less cost-effective than their advocates claim.

Use federal regulations to ensure transparency in health markets. This will help contain costs and improve quality. Providers, insurers and medical products suppliers all should be required to post understandable and detailed transaction prices, not list prices, and contract terms on the Internet the day they are updated. Today, it is common for hospitals to charge the self-insured wildly and dishonestly inflated list prices and charge insurers incredibly discounted prices. Similarly, makers and distributors of medical supplies and equipment sharply discount inflated list prices. Require all players to publish their latest transaction prices daily. Markets work when all players have good information. They don’t work when they’re distorted by game playing.

Bonus. If regulations can be devised that sharply reduce the profitability of using campaign contributions to get politicians to further distort the health insurance markets, the markets will work much better. We’ll get better and more health care for every dollar spent. 

But this is America, not Canada, the U.K. or some other fantasy land. Whatever reforms are devised will reflect the American political system, culture, geography, demographics and our very high standards of living, which allow us to spend more on health care than any other country.

Commenting is not available in this channel entry.

<< Back to main