OT - A intriguing "open lette"r on health care ...

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Friend of mine, a doctor and fellow musician, came up with the following, an intriguing plan to revamp the US health care system from a practicing physician's perspective.
Be sure to read the entire plan before making any judgments, it's tricky in few spots.
<Open Letter>
Dear Mr. President,
Here are the basic principals upon which a sound, sustainable and ethical health care system can and should be built:....
1. It shall be illegal for physicians to contract with anyone other than their patient or patient's legal representative. There shall be no contracts with the government, with any "managed care" entity or insurance company, or with any other third party.....
2. It shall be illegal for physicians to receive payment directly from a third party "payor." Payment must come from the patient directly and shall be made at the time of service.....
3. It shall be illegal for third parties to request discounts from a physician for their clients. The price for various services is to be negotiated between patient and physician, as is the case with all other professions. ....
4. Each American citizen shall have a Health Savings Account established at birth. The HSA will be maintained with an investment firm or bank, the accounts being insured by the Federal government to the amount of $150,000, as are bank deposits. Increases in value on these accounts via interest, dividends or increases in investment value are not taxed, and these assets are protected from creditors, as with the usual IRA. (Regulations will need to be developed regarding the type of investment, allowing a certain low percentage to be invested in more volatile investments.) Funds in the HSA can be spent only for Health Care, but can be passed on to heirs over multiple generations, to be used for the heir's health care needs. ....
5. Each American citizen shall be able to exclude from taxation the amount of $5000 per year (adjusted for inflation) for deposit in his or her Health Savings Account, with catch up contributions allowed if the prior year's expenses exceeded this amount. There shall be no limit to the total amount of capital the citizen can accumulate in his or her HSA. ....
6. Businesses may no longer subtract from taxable income any payments to "insurance companies" for health insurance plans. They can, however, deposit money yearly into their employees' HSAs as a dedutible business expense, the yearly maximum contribution per employee to be determined after study by qualified economists. ....
7. Each American citizen shall have a catastrophic health insurance plan in place that covers yearly health care expenses over $20,000 (adjusted yearly for inflation). This plan will be sponsored and financed by the Federal Government. See below for Comments about administration of this plan.....
8. Citizens with income below the poverty level will be provided yearly with a "tax rebate" from the Federal Government, deposited directly into their HSA.....
9. The government will mandate that each state educate its citizen about this "self-reliant" system. Every citizen must realize the need for preventive health care and a healthy lifestyle. They must realize that prudent use of these funds and maintaining a healthy lifestyle are the surest route to security. They must be made aware that contribution yearly to the HSA must come before purchase of consumer goods, a new car, or a vacation, for example. There will be no free “safety net” other than the catastrophic coverage.....
10. Citizens who become ill before they have accumulated sufficient funds in their HSA to cover the "gap" (whose HSA balance falls below zero in a given year) will be LOANED the needed funds by the Federal government, to be repaid with interest in the future. This loan will show up on their credit report and will influence their ability to borrow for other purposes until it is repaid. ....
Comments.....
This plan relies on human nature to reduce costs. When payment is coming directly from funds controlled by the patient, the patient will make wiser choices. There will be less desire to obtain expensive tests that are marginally indicated for minor complaints or to obtain expensive tests when less expensive tests will do. Less expensive, but equally effective, medications will be demanded by the patient..... and so forth.
With this system, the medical profession will be restored to an ethical status, it being unethical to allow outside influences to intrude on the physician-patient relationship (as contracts with third parties invariably do). ....
The public will demand transparency in the pricing of services and will cease to tolerate overpriced services. ....
The nation will then be pooling health risks that are in the catastrophic range, rather than simply using the "insurance industry" as a (leaky) conduit of money from employer to physician or hospital for everyday care. ....
With prudent living and prudent saving, within five to six years each citizen will have in their HSA sufficient funds to cover the $20,000 "gap" in any one catastrophic year, and within ten or so years should have the funds to cover the gap for several years of catastrophic ill health. With good health and good planning, these funds can be passed from generation to generation, allowing those families with good health to become fully covered with only rare intervention by the government. ....
The government can negotiate with the current managed care industry to obtain management of the catastrophic funds with minimal administrative expense, or can set up its own administrative agency (to replace the current CMS, for example) to manage and administer the catastrophic coverage program.....
Physicians will now be free to concentrate on what they do best, care for patients and maintain their knowledge base, and will no longer have to waste time dealing with managed care contracts and meaningless requests from managed care companies. ....
I urge you not to let the powers that be within the current managed care industry or within the established government agencies to bring pressure against the adoption of such a rational and beneficial plan.....
Respectfully yours,
Lawrence E. Mallette, MD, PhD, FACP, FACN April 2009
</Open Letter>
Once again, chew on it for a while before rushing to judgment.
--
www.e-woodshop.net
Last update: 10/22/08
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Swingman wrote:

This plan does not rely on "human nature" to reduce costs - it relies on government setting rules on how health care contracts should be negotiated and enforced. There is nothing that would prevent, today, a physician from demanding payment up front from the patient and refusing all third-party involvement.
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I know of at least on who does just that. You get to negotiate with your health insurance company and wait for them to pay.
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Precisely, and that is the beauty. Once again competition between doctors and their services would keep costs low. Already there are groups of doctors, clinics, pharmacies, and hospitals that will not accept insurance. You have to join their group for well under $100 per month for your whole family but a typical office visit costs around $35.
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Leon wrote:

But what do you do for critical care wherein costs can easily run into the $100's of K numbers--a friend had heart valve replacement at roughly $300K recently.
The routine office visit is simple; the costs are in the high-dollar items that are less frequent, high liability (tort) costs and the costs for unreimbursed care that have to be picked up by those who do pay.
The "competition" between physicians for expert medical care is a fallacy -- in general the consumer has insufficient expertise to judge quality or to know how to select alternate care options for the highest efficacy. When forced to make difficult decisions on perhaps life-or-death issues, in the end its not likely that the overriding concern will be the cost. Easy enough to hypothesize that's what the so-called rational consumer SHOULD do, but just as the markets are as much or more emotion-driven, health care choices are as well.
--
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The only reason that the procedure cost that much is because insurance companies probably only pay 30% of that cost. Eleminate the insurance companines and you get the better pricing because every one is paying their fare share and the medical industry does not need nearly as many on staff whose only job is to "try" to collect what is owed them by the insurance companies.
The "groups" that I referred to so surgery also at a dramatic reduction in cost.

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Leon wrote:

Do they do the difficult surgeries or are they like the private heart clinics and others I'm aware of that "cherry-pick" the routine cases w/ high probability of success and low probability of complications and leave the rest to the others thus driving up average costs drastically. Again, _there's_ where the rub is.
I'd wager it's the latter--every one of those groups I've ever seen have very selective membership criteria.
I don't understand the 30% example--typically insurance carriers are covering 80% or "standard and normal" for any particular procedure.
I'll agree there is some overhead in processing claims but I'm yet to be convinced it is a preponderant fraction of costs--rate it compared to liability cost and uninsured/uncompensated care costs and I'd wager it's the tail of the dog. Just as I'm totally unconvinced electronic records will have any discernible effect on actual costs--it may help in some cases w/ precision, add errors in coding in others and every large data-processing implemented I've ever seen simply transferred one group of overhead costs to a different set to implement/maintain/operate the system.
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dpb wrote:

More to the point, even if the actual cost is only 100K and not 300K, that's still more than most people can afford out of pocket.
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J. Clarke wrote: ...

Yet even more to the point, even $300K is a mere pittance for many treatment options... :(
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but a far greater amount of people can afford 100k vs. 300k. You are not going to be able to please all the people all the time.
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Leon wrote:

Out of pocket w/o insurance I'd say the percentages are about the same--miniscule.
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If you want to look at it that way $1 would be way more than some could afford, and yes I know of several people like that.
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I have heard nothing to make me think that they would not. It would be as ignorant to assume that they would not as it would be to believe that they would with out checking the details. Same goes for AMU insurance company or HMO.

Have you seen them all?

I see my medical bills and what portion that is actually paid by the insurance companies. Often the insurance companies cut up to 90% off and often will not cover a procedure. The doctor writes that off, I don't get billed for the difference.

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Same goes for ANY insurance company or

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Leon wrote:

They might; then again they may not. Most likely the selection criteria were made when you were enrolled in the group. What if you had been 70+ and in need of serious heart care when first applied? Think you'd still have been accepted?

Of course not--but I've seen enough to have a pretty good understanding of their business model.
It's quite selective, not universal.

That's doctor's choice then--I've seen some that do, some that pass the cost on and some that are in between. Some carriers have contracts that say what is/isn't passable; some physicians choose not to accept patients with those carriers.
There is no one size fits all, but if there's one of the sign-up monthly fee groups that doesn't have a fairly tight acceptance criteria policy I've yet to see it.
--
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It would really be a waste of time to simply speculate how something would work with out actually getting the details.
Given that comment, there would be no screening necessary, remember you do actually pay for treatment. The cost would be less than "normal" because there would be no losses caused by non-payment, slow to pay, or reduction of item costs by an insurance company.

It does not sound that way to me.

Why would that be, you are obligated to pay for any and all procedures. They are not selling or operating like an insurance company. They are simply charging what they consider a fair and profitable amount less the huge cut that the insurance company gets. Think about insurance companies as being something limilar to a labor union. While all car companies except Honda and Subaru are hurting in the US, the big 3 are mostly hurting because of the burdon that most all other car companies have been able to avoid. Today's union literally brings nothing more to the customer than the Japanese do.

The fact remains, the costs are inflated to make up for Insurance loss costs.
What we have now is not working and is soon to break down, lets not crap on new ideas. Can't never could do anything.
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Leon wrote:

Well, it does to me... :)
But what you're describing above is at least somewhat different than what I was speaking of if indeed they will accept anybody.
There was quite an at length article in Forbes or somewhere similar a while back that went into the practice of which I was speaking at quite some length and detail. It certainly is true that many of the specialty private surgical centers, heart centers, etc., are quite selective in their accepted cases.

No, they're controlling risk to an even higher degree than most insurers in the practices/groups of which I was speaking (see above).

The "huge cut" the insurance company gets is that other part of the high risk pool in large part as well.
...

I'm not sure I've seen much in any really new ideas, unfortunately, particularly those that would actually help across the full spectrum of both abilities to pay and access to services.
The one thing I'm pretty sure of is that the inclusion of large segments of currently under- or uninsured without a commensurate inclusion into the payment pool by some means is going to be another federal welfare program that will not be able to be funded w/o massive deficits or taxes of one form or another.
One specific place where I think it's gone badly wrong to date is that far too many young, relatively healthy working folks are opting entirely out of having any insurance at all in order to have more toys so they're not helping in the spreading the cost and are dead weights when the occasional one does have a serious disease or accident. It would also help many self-employed if it were required that carriers accept them as a part of an equivalent-age/work-type pool rather than only as individuals. That would put many older that currently aren't but would like to be back into the system.
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dpb wrote:

<snip>
Here's a few changes I'd like to see:
1. The federal government will set a maximum hourly billing rate for doctors based on their classification (GP, FP, neurosurgeon, etc.). The patient can be billed only for the actual time spent with the physician in 15 minute increments.
2. If you have scheduled a doctors appointment and are kept waiting past your appointed time the doctor pays you for your wasted time at his billing rate in 15 minute increments.
3. If you see a doctor and all he does is refer you to a specialist the referring doctor get a $15 administrative fee only.
4. The patient pays only for those medications that prove to be effective.
5.A doctor is allowed to have all the tests performed that he deems necessary. The patient pays for the test that finds the problem. The doctor pays for the rest of the tests.
6. All hospital charges, anesthesiologist fees, nursing staff, in hospital supplies and medications, etc. will be considered part of the doctor's overhead and will be paid for by the attending physician. This should get rid of the $15 aspirins, $20 Band-Aids, etc.
7. A doctor receives no payment until all work is complete to the patient's satisfaction.
8. A money back guarantee will be issued with all procedures performed.
I'm sure the group can think of others...
--
Jack Novak
Buffalo, NY - USA
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You know, even though you did not have a strength of materials course, you still seem to be a clear thinker.
I particularly admire the blending of the language from the AIA shortform with the requisites for the proposed changes.

Tom Watson http://home.comcast.net/~tjwatson1 /
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PErhaps you'd like a Washington Bureauscrat to set your hourly pay too?

He's going to do this without raising his rates, just to make you happy? He has to schedule empty slots so emergencies don't upset the cart?

His knowledge isn't worth anything?

There goes all experimental drugs and any treatment that isn't 100% effective (are there any?).

No tests - no diagnosis. That's a good idea too.

Nonsense. It'll just add another level of bean counting. "$15 aspirins" are "$15" because a large slice of the population is actually paying $0. For everything.

No mode oncologists. Forget hospice care. Nice plan you have going there.

See above.

I suppose any idiot can show his stuff on the Usenet.
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