The failure of the Republicans to repeal and replace Obamacare was a disappointment but not a surprise. Sensing there would be no consensus on this I sent a letter to Paul Ryan’s office a couple of weeks ago outlining what I thought a reasonable, comprehensive, patient-oriented, market based health plan would look like. I based it on 35 years of Emergency Medicine practice and practice management in both for-profit and County facilities. I’m fairly certain it never got read.
Before describing my plan I think it important to review for a moment why some sort of replacement is necessary. Obamacare is failing due to its design. It is based on an expansion of Medicaid and was, I believe, constructed to fail. The Holy Grail for Democrats is a single payer, government run health care system. Their thinking seems to have been to enroll large numbers of people in Medicaid, cost free, and foster an entitlement mentality. Then, when the federal subsidies to the states ended there would be pressure on the federal government to do something. That something, they hoped, would be either a bailout of Obamacare with increased federal subsidies, a single payer system, or at least a competing ‘public option’, the bridge to single payer.
Given the election results it is unlikely that Obamacare will be getting any additional federal funds. And it shouldn’t. It is going to collapse and good riddance when it does. People insured under Obamacare do not have insurance. Not really. If you have been enrolled in a managed Medicaid plan and can’t find a doctor to see you, you are essentially uninsured. If you have one of the ‘metal’ plans but can barely afford the premium, let alone the deductible, and are afraid to use it, you are essentially uninsured.
What Obamcare does provide is free access to hospital emergency rooms—at least for the Medicaid members. Since its inception ER patient volumes have risen and the amount of primary care being delivered by Emergency Physicians has become substantial. This, we were told, was precisely what would not happen if the law was enacted. This inappropriate use of the ER further drives the cost up and is hastening the law’s demise.
But even those for whom ER care is free under this plan are still out of luck, in many cases, if they require specialty care beyond the Emergency Room. There are few surgical subspecialists outside large teaching hospitals and trauma centers willing to take call for ER patients, especially those covered by any iteration of Medicaid. They simply cannot afford it.
So something needs to be done. Republicans tried but had their hands tied. Without Democratic support they had to work through the reconciliation process which did not allow them to add much in the way of new legislation. What they came up with was branded ‘Obamacare Lite’ by the Freedom Caucus who refused to support it. The idea was to pass the bill, effectively repealing Obamacare, then go back in stages to fix it. Those who opposed the bill either didn’t understand this or didn’t believe it could be done.
Had it passed there would have been much wailing by Democrats and the press that the new plan was worse than the old, too many were excluded, the costs were no lower, and on and on. So what? The Obamacare taxes would have been eliminated, the mandate gone, and the door open to revising the plan to achieve the sort of universal coverage at a reasonable price that was the goal in the first place. It is likely Democrats would have wanted to participate in crafting that legislation.
The jubilation on the parts of Pelosi and Schumer over the demise of the Republican bill was absurd. It was like being on the Titanic after it hit the iceberg and being ecstatic there was no longer any reason to worry about the fire in the boiler room because it had been extinguished by the inrushing water. The ship is sinking, folks, and when it does a lot of people may drown.
If the Republicans could muster the votes for a repeal, without a replacement, they should do it. This is not the way I saw it two weeks ago, but Obamacare is dying, and considering its support for assisted suicide, it would be an appropriate patient on which to pull the plug. Unfortunately, I think a repeal would require 60 votes so instead it will be forced to suffer a slow and painful death.
What happens next is really anyone’s guess. There is so little will on the part of our politicians to do the right thing over the political one, and so little agreement on what the right thing is, that this could be a mess for quite a while. Coming to grips with this reality is what pushed me to support a repeal only strategy. Crash the system and scramble to re-boot it.
If I were involved in the process these would be my concerns: everyone needs and should have access to healthcare, it has to be truly affordable, one size does not fit all, government bureaucrats should not be in charge of any part of it beyond the existing government programs—Medicaid and Medicare, Medicaid should remain as the safety net it was designed to be, and not a lowest common denominator ‘insurance’ for the masses, insurance companies should provide insurance for catastrophic loss, not first dollar coverage.
Achieving these goals is possible but unlikely in our current climate with our current leaders. If we agree that everyone deserves access to quality health care then we are putting it on a par with other utilities—power, water, things everyone needs and no one should make windfall profits from providing. This is not exactly a free-market concept, and I’m very much a free market person, but it’s the way it is. I don’t want to hear that the CEO of Blue Cross is making a seven-figure bonus while my premium rises any more than I do the person running the DWP is being likewise enriched. That is extortion, not free enterprise.
Prices for health care have to come down and I think the best way to do that is to get insurance companies off the front line of reimbursement. As recently as the 1960’s the cost of health care was relatively reasonable. This, I believe, is because people paid for medical care and services with cash. Out of their pocket. Or with chickens, bushels of produce, or—you get the picture. Consumers of health care were deeply aware of the cost because they had to pay for it themselves. For that reason it was impossible for prices to rise significantly without the consumer noticing, and looking elsewhere for a better deal.
This all began to change with the introduction of Medicare. Suddenly there was a disconnect between the consumer and the payer. People were not apt to scrutinize their bills if they weren’t responsible for them. Prices began to rise. Insurance companies followed suit, offering first-dollar policies. These were made available through employers and via deals with labor unions as ‘benefits’ for workers. Now not just the elderly were removed from the cost equation but large swaths of the middle class were relieved of that arithmetic as well.
No longer worried about complaints from consumers, hospitals, physicians, and pharmaceutical companies began raising prices and cashing in. Insurance companies raised rates to adjust to rising costs and employers were fine with it. And now here we are.
Some would argue that advances in technology and new, expensive therapies are responsible for the skyrocketing costs, but I think an actual cost-price analysis would show that prices have gone up disproportionately to costs over the past 40 years. Maybe someone can look into that.
Anyway, here’s my idea of how to put together a reasonable, fair health care policy. It will be presented a bit simplistically. I want you to get the concepts. The wonky details don’t really matter, especially since this has zero chance of ever being instituted. But I think it would work and would cost no more than what we are spending now, would cover everyone, and would put patients and physicians back in charge of health care decision-making.
First, we have to have transparent, cost-based pricing. For everything from drugs, to medical devices, hospital stays, medical procedures, imaging studies and lab tests. Doctor’s visits, too. I understand it’s popular among the more affluent among us to pay $1000 for an office visit to a Century City doctor who is out of network for all insurance plans, the thought being the doctor is so special it’s worth the cost. Let me be clear. In the large majority of cases that is not true.
Next we need health savings accounts. Pre-tax money that goes into a special account to be used for health care related expenses. Say $5000 per person per year, $10,000 per family per year. Simple round numbers for now. These accounts will be means tested. It will be determined based on your income how much of the designated amount you can afford to contribute and the federal government will subsidize the balance by issuing a health care credit card.
To protect against catastrophic loss, insurance companies will offer high-deductible insurance plans in a variety of shapes and sizes to fit the variable needs of individual consumers. These can be offered by employers or can be purchased through buying groups. Goodbye to the individual market—a giant rip-off if ever there was one.
If you have a bad year and burn through your savings account money before year-end your insurance plan will kick in. If you are not employed or cannot for whatever reason afford a supplemental policy, you will be enrolled in Medicaid for the remainder of the year. Better than nothing and exactly what millions are getting from Obamacare now. Come January first new account deposits are made and new credit cards issued.
You are only obligated to spend the designated annual out-of-pocket dollars each year. If you spend less, it stays in the bank. If you have a really bad year you only spend the designated amount. You do not have to spend what you saved in previous years. So, the account has the possibility of growing over time. If and when you make it to the age of Medicare eligibility, (which I will soon, oh boy!), whatever is left in your health savings account can be rolled into your retirement account, tax deferred until it is withdrawn and then taxed as regular income.
There are myriad other details, surely, and the devil may well be in them. But the advantages are obvious. A pediatrician too busy to see the family of three with runny noses with Medicaid and who refers them instead to the ER might rethink things if instead of getting $12.00 a head from the government he can swipe the credit card for $50. This is good for the pediatrician, good for the patients, and good for the government, because the ER would have cost well over $150 per patient.
People spending their own money, either cash or credit card, tend to be more aware of how it’s being spent. Also, knowing the money you put away for health care could be available to you as retirement income would be an inducement to live a healthier lifestyle, thereby increasing your chances of living that long.
Again, this was not intended to be treatise on medical economics but merely a suggestion of how things could work if our leaders had the political will and integrity to take on the formidable obstacles facing health care reform. This is more or less what I sent Paul Ryan before his bill tanked.