A healthy Alternative

This document was originally written before Obamacare. It is a logical approach to healthcare in America. Today, more than ever, it is relevant and worth review.

America was founded as a free enterprise system where you use the rewards of your labors to purchase food, shelter, property, a new coat, as well as professional services. From what you earn you make decisions as to what you value, require, and can afford. If you choose a cell phone or new car over health insurance that is your right. To expect others to pay for your healthcare is wrong. You wrong your neighbors, those who toil to purchase insurance, and your nation.

What is wrong with healthcare in America?

To begin, it is too expensive. Next, it is impersonal, inefficient, cumbersome, and frustrating. Add to that the fact that the wrong people are driving the process causing the patient/doctor relationship to break down. Ambulance chasing lawyers siphon off an enormous amount of funds for personal gain that could be used to improve the system. Fraud is at epidemic proportions. There is far too much bureaucracy and regulation. Doctors are underpaid and overworked. We are trapped in a pharmaceutical maelstrom of deterioration. Efficacious and efficient alternatives are ignored. And finally, the American public is pursuing an unhealthy lifestyle. There may be more, however, this pretty much sums it up. Now, if you believe throwing a single-payer, government-run, mega-program into the mix is the answer I tell you, with all my heart and pity, that you are going to be severely disappointed.

The doctor/patient role.

Never forget, the single most important person in healthcare decisions is you. Nothing is more personal than your health. I will not allow any doctor to perform any test, prescribe any medicine, execute any procedure, or bill me a nickel without my understanding what, why, how, and the risks involved. Good doctors treat each patient as an individual with unique characteristics, challenges, treatment approaches, and potential outcomes. An insurance dictated protocol, list of pharmaceuticals, established number of visits, allowable tests, and level of payment is only good for the insurance company.

SOLUTION 1: The doctor and patient together must make all healthcare decisions based on medical history, available alternatives, risk, cost, and comfort level.

This is basic medicine that has been lost in an endless list of what insurance companies will and will not approve. There is no single approach that will fit every situation. The addition of the government into the process will not improve anything and most likely will make it worse. We need to return to a one-on-one relationship that is not influenced by bean pushers, government bureaucrats, or those with a profit motive. Together, the doctor and patient must make all healthcare decisions.

SOLUTION 2: Let doctors determine cost of their services.

Competition among doctors, not insurance companies, will lower the cost of healthcare and allow a doctor to make allowances for those less able to pay. If an ophthalmologist chooses to do cataract operations on patients over 65 at a flat rate of $500 that is his or her choice. The doctor across town who charges $2,500 will see a drop in patients and most likely will lower costs, as well. When an insurance company establishes the rate it removes the professional from the process. Further, because doctors are paid for procedures, rather than their time, they are forced to recommend procedures just to survive. I would rather that my doctor be compensated for discussing my case and reviewing the many options available with me. Wouldn’t it be nice to have a doctor suggest that we try some simple approaches first, then if there isn’t improvement do appropriate tests?

When a doctor discusses a patient’s situation and healthcare needs it should be the doctor who provides the patient with an estimate of professional charges, cost of tests and procedures, and expected pharmaceuticals or other elements. Based on the type of insurance that a patient has, all or a portion of the costs would be covered.

Insurance.

We all hate insurance companies that make it nearly impossible to understand their procedures, policies, coverage, and requirements. In addition, they charge too much for the pleasure of being frustrated and limited in our choices of treatment. Insurance coverage does not protect you as much as it limits what medical services you can receive. I can’t tell you how many times I’ve made my co-payment, left the doctor’s office and weeks later gotten an additional bill from the practice for hundreds of dollars to cover what the insurance company would not pay, defined as ineligible, or some other surprise reason for not covering the bill. How many times have you had to call your insurance company to ask if they cover a procedure or doctor visit you believe you need? After paying thousands of dollars in premiums you have to ask for permission like a child. By virtue of monopolizing the process along with counter-productive government regulations the greatest healthcare system in the world is inhibited and misused. To be honest, insurance companies are in business to make money not make you well.

SOLUTION 3: Eliminate employer funded health insurance.

We backed into this employee perquisite when companies were competing for talent. Unfortunately, it leads to age and state-of-health discrimination when hiring or firing, represents an ever greater burden to businesses in terms of cost and employee time, abandons individuals without insurance when they leave the company, lowers awareness of the real cost of healthcare, and opens the door for more government interference in private business.

The fix is simple. Much like it is with automobile insurance, health insurance should be purchased by the individual. This allows each person to decide whether or not they want insurance and what kind of coverage (more on this later). An employer can and should give employees a raise to cover the expected average cost of insurance. They can do this with the savings from not having to buy insurance through the company or pay employees to manage the process.

SOLUTION 4: Create a more flexible approach to healthcare insurance.

The cost of healthcare insurance is a function of many factors. There are far too many to address in this article, however let me discuss a few for illustration purposes. I will use fictitious numbers because I’m too lazy to do more research. Consider the following scenario. Your employer gives you a $6,000 raise to cover healthcare. You can pocket the money and not get insurance and take your chances, which would be ill-advised. Or, you could shop for insurance and use the following criteria to determine the cost.

Doctor’s Visits – If you pay for all of your doctor visits out-of-pocket there would be no premium for this service. You choose to pay out-of-pocket because you see a doctor rarely.

Deductible – Much like with car insurance the higher the amount you are willing to pay each year before insurance companies have to pay the lower your premium. Given your $6,000 raise you decide a deductible of $3,000 is safe. This level gives you an attractive premium of $2,400 per year. Even if you use the total deductible you are $600 ahead.

Annual Caps – If you select an annual cap of, say $20,000, for tests, procedures, and pharmaceuticals, which means anything above that amount (non-catastrophic) is your responsibility your premium would be reduced to $1,800 per year.

Percent Coverage – A percent coverage option which states that the insurance company would pay 80% would also lower your premium. Now, you face $1,200 per year.

Catastrophic Coverage – Here is where most people need coverage to protect their family. If you face a catastrophic illness or injury this coverage would pay 100% after you reach the annual cap with your regular insurance. Because you are part of a large pool of customers the cost would be $1,200 per year bringing your premium up to $2,400.

Prescription Drug Coverage – For coverage of 80% of the cost of pharmaceuticals, after you reach your deductible, you would pay an additional $600, or $3,000 per year.

Lifestyle Discounts – Rewards for good health habits could be offered by insurance companies as a way of keeping claims down. A smart insurance company would pay 90% of the cost an annual physical to identify and treat health issues before they become chronic or expensive. A non-smoker, who is not obese, who passes a drug test might get a discount of 10%. This would result in a premium of $2,700 per year.

Unemployment Coverage – A rider can be purchased at very low rates to pay health insurance premiums if you become unemployed or disabled. This could be as little as $100 making your insurance premium $2,800 per year.

Given the above example, an individual with a $6,000 raise would pay $2,800 for coverage tailored to their needs and desires. This would leave them $3,200 to cover doctor visits and other healthcare costs. After a few years of healthy living they might have quite a reserve to cover those years when they face more expenses.