Health care reform that will work

I agree that health care reform is desperately needed.  I also agree that prices have spiraled out of control and we need to stop it.  I don’t think that the government running the health care system or being a larger player than they already are will help anything.  According to the Kaiser Foundation in 2004 there were 42 million people covered by Medicare and 52 million people covered by Medicaid. There are about 87 million total covered between the two programs as 7 million are dual eligible.  So with our population of 300 million people, almost a third already have access to an existing public option.

Another public option is not the solution, but systematic reforms could change the way consumers consume health care, reducing costs for us all.

  1. Front the money. If individuals had to front the money for their own health insurance, it’s more likely that they would consider the price of a procedure, and actually demand this information before moving forward.  Not that it will change their mind on the necessity of the procedure, but the awareness of price may lead to competition on price, delivering lower costs for us all.
  2. Extend tax benefits to individuals. Keeping the benefits of providing health insurance on the employer side has kept the policy in the employer’s hands.  Extend tax benefits to individuals the same way you would to the self-employed so that opting out of your employer’s group option can make cents.  This is especially true for young employees in aging organizations where the young may pay higher premiums than they would in the private insurance market to subsidize the older participants in their group.
  3. Encourage competition in insurance. This issue is so complicated that it’s hard to know where to start, but some common sets of regulations that allow competition to flow more freely from state to state would be a great place to start.  This should not come as a federal mandate, but as a cooperative of the states utilizing what is already working best in various parts of the country to make some uniform guidance and grounds for competition.

These reforms would help to put market pressure downward on prices for both care and insurance as well as upward pressure on quality of care.  There are efficiencies under development in the health care market that are not being exploited because of the regulatory state of affairs and third-party payer system.  Telemedicine holds great promise to deliver care more efficiently, but may be held back if insurance companies do not give doctors a code to be paid for this service.

However, innovations such as this would take hold more quickly if the perception of health insurance were to change drastically in the marketplace.  Currently, health insurance is viewed as a way to avoid paying anything for medical care, so that the consumer can consume health care freely and let someone else pay for it, so long as they can ante up with the monthly premiums.

If health insurance were perceived more like homeowners insurance, where you take care of maintenance yourself and use the policy for major damages, doctors and patients would have more control over care than the insurance companies.  This would also drive down the cost of health insurance as much more of the health care spending would be cash from the patient to the doctor instead of from the insurance company to the doctor.