Health care reforms that will work

    When I ask my students to write about current economic issues, aside from gas prices, health care is the issue that seems to get the most attention. The Health care problem is actually a tremendous opportunity, since there is so much room for improvement.

    I would like to take a crack at the problem, as well. To improve a system, we must first improve transparency (this will eliminate waste) and then resolve inherent contradictions that exist within the system. There are fundamental problems with both government and private systems, so I would like to propose a solution that uses the best parts of both approaches.

    Doctor and procedure ratings
    The current system is extremely non-transparent. The way to achieve transparency is through standardization. Our government already has done some of procedure cost analysis for Medicare, and now just like during the startup of internet protocol we need a task force that can work out the rest of the format and implement it. Every procedure should be identified with its baseline costs and typical success expectations. This information should be available in a national online database that would be accessible to everyone. Clinics and hospitals would than be required to submit to the database and post in their buildings regularly updated information regarding the costs of the procedures in their facilities, the percent cost above the baseline, the success rate,  as well as doctor’s information, such as years of experience, certifications, former patient rating. The net result would be that for the first time we would be able to shop for doctors both based on cost and their credentials, easily comparing them online. Individual doctors will be easily able to compete with hospitals and thus force hospitals to lower their pricing.


    Insurance standardization
    Insurance organizations can then be easily streamlined by being required to provide standardized information regarding the percent over the baseline that they will cover. This will eliminate the need for health organizations to enter in to contracts with the insurance companies, since anyone given the qualifications that insurance specifies and given the insurance rate specified will be able to charge the insurance company the money for their service. In fact, with insurance credit cards, people will be able to pay for the services on the spot. Not only will that eliminate the delays in billing and get rid of the need for vast majority of medical billing, coding and insurance professionals, but it will give the uninsured the same rate as the insurance companies.
    The five million plus people whose jobs will be eliminated would have to be retrained. But, since their job was actually counterproductive to start with, it has to be done. Some of these people can became auditors and medical assistants in the new system. Many would have to be retrained to a different field altogether. Doing these activities alone should cut between 5 percent and 20 percent out of the health care costs, thus creating a windfall that would easily pay for any transitional costs. It would also improve the service and reduce stress that is associated with current medical practices.


    Another major area where we can achieve tremendous improvement is in caring for the people in last three to six months of their life. Historically, nearly a third of all health care costs are incurred during this time. A number of studies have conclusively shown that creating a comfortable environment where people can spend time with their family and enjoy the lifestyle of a five-star hotel rather than grasping at straws for every possible treatment, will report higher quality of life, live longer and incur only a fraction of the costs.
    Simply put, our medical environment is setup to keep a person alive rather than let them enjoy life and die with dignity. The only solution is to create a whole new set of treatment facilities and a whole new field of medical studies that focus strictly on end-of-life issues. Having a special end-of-life insurance (that at basic level can be government run, with additional levels available for extra pay) would allow people, once there is a realization that they are terminal to go in to these specialized programs. The organizations running the programs would receive a compensation based on the rate (which once again is published against a baseline, also listing amenities and ratings); and reported satisfaction of each client (or in incoherent family and/or auditor). The auditors, whose job is to minimize the costs, would therefore act as client’s advocates insuring that the health centers provide exceptional levels of service.
    This new focus has the long-term potential to reduce our health care costs by 20 to 25 percent, while actually improving the service.  


    Personal responsibility
    Improving health care organizations is only part of the puzzle. To change long-term trends, we must become healthier. Once again, there is much that government policies can do to encourage healthier lifestyles.
    To start with, subsidies on junk foods must stop. Slowly but consistently, we must start raising taxes on junk food, cigarettes and alcohol across the nation. By moving the subsidies from corn producers, to organic multi crop vegetable and fruit producers we can eventually affect this country’s buying habits away from corn fed meats and corn syrup to healthy local organic products. This shift will not only do more for the health of the nation than just about any other program, but it will have a positive economic (helps small farmers, creates entry level jobs, encourages small business ownership and entrepreneurship), social (helps build strong communities, pride of land) and  environmental (reduces pollution, more productive land use) impact.
    Once this program starts generating revenue, we can use the revenue to provide free voluntary medical, dental, optical and mental health examinations on a quarterly basis. Just like care maintenance, every exam will have some of the same basic dimensions, but will also focus on different aspects of health every time, so that over time we can develop a complete awareness. Since this program can be largely standardized (with variations only based on individual history), it should be fairly cost effective to administer, aid in fighting epidemics and help with early detection of major illnesses. 
    Anyone who participates in the program would receive a complete report with their ratings and a plan for improving those ratings through exercise, diet and medical attention. They would then be able to use their ratings to receive discounts from insurance companies, who in turn would create lower risk pools for people who live healthier lifestyle. Insurance organizations would only receive the information regarding the dimensions that individuals can control, so thus they would not be able to discriminate based on family history. Thus, people would have an economic incentive to be healthy physically and mentally.


    Government’s role
    The private sector, given enough information, is best-positioned to manage day-to-day medical costs. But only government has the resources necessary to research cures for persistent, severe and terminal illnesses. While the pharmaceutical companies are better at keeping a person sick enough to keep coming back, the government has the incentive to get sick people well to both reduce the up-front costs and to return them in to the workforce. So, I propose that should a major debilitating illness be discovered during the exam, the government should step in and pay for treatment for the person. Again, to minimize the abuse of the system, the provider’s rating would heavily depend on what percentage of their clients and how quickly they were able to help. Thus, only organizations that actually help will continue receiving referrals.
    The government would also have a tremendous incentive to invest in primary research, the one are where government may well be more competitive than the marketplace.
    This program along with eldercare can be paid for through taxation of unhealthy activities and increased taxes from the fact that healthier population is likely to be more productive.


    Centralized data storage
    Creation of an online database that contains all the medical records in one place and is accessible to anyone who can scan your card and use a fingerprint or pass code to approve it would substantially reduce costs of multiple examinations, bad information, initial consultations, redundant procedures and effort. It would make getting a second opinion as easy as a phone call to another doctor. Creating a national, internet based database would be able to achieve that purpose very effectively. This program would quickly pay for itself in vastly reduced medical costs. 


    Stress reduction
    By streamlining our health system and we will have reduced one of the key stressors (and thus causes of bad health) among Americans. The private insurance will be cheap, since it will have little overhead, be competitively shopped and will not have to worry about terminally and persistently ill. Thus just about everyone should be able to afford it. There will be little incentive to stay in dead-end jobs, since anyone can buy insurance directly and not worry about preexisting conditions (persistent illness is covered through government insurance), so the employers will have to create better work environment and provide individuals will be more willing to become entrepreneurs. While the market conditions might force the employers to become more flexible with scheduling, time off and vacations, the overall population would probably be healthier and more productive if there were government policies encouraging vacation time and leaves of absence. Eliminating taxes on vacation pay, for example, would encourage employers to provide longer vacations. This can be offset by slightly increasing taxes on overtime pay.


    It takes 25 years to develop a drug that will be approved by FDA. After it is approved, it can still be pulled off the market if somebody dies. It seems to me that a more ideal approach is that of full disclosure. If, instead of prescribing one drug, the doctor showed me a list of drugs and mentioned what the advantages of each are, given my condition and my insurance level, I should be able to pick a drug that killed 200 people but helped millions. I should even be able to take a drug that has not been approved by FDA, provided that I have documented in writing that I understand all the risks and have been made aware of all the known side effects.
    Not only will that speed up the development process and allow for more competition (since smaller players will now be able to enter), but it will actually improve the amount of information that developers have early in the process and thus allow them to make changes as necessary.
    The costs for the drugs should plummet with quicker development cycle and government investing billions in the research. All the alternative medicine approaches would also gain an opportunity to compete side by side, since people would now be reporting usage, perceived effects and side effects, thus creating a lot of data that shows what works and what does not. 


    The lawsuits should be rare under this new system of full disclosure. After all, if I knowingly undertook the procedure that has 80 percent national success rate and I used a doctor who has 50 percent success rate, having done it only twice, it is my personal choice. Short of fraud, extreme carelessness, or intentional harm, there should be no ground for the law suit. This should reduce the costs of the system considerably. Fortunately, lawyers and malpractice insurance specialists should be easy to retrain to focus on other areas of their practices.


    Increasing personnel
    Even if we streamlined all of our practices, we will still need more doctors and nurses. One approach is to hire entry level staff to assist with health examinations, with the substantial part of the compensation being contribution toward their medical education.
    Another approach is to remove the requirements of medical degrees from managing medical institutions. A professional manager, with no medical training is at least as if not more suited to managing the medical businesses. They cost a lot less and require a lot less training.
    Stronger emphasis on math and science in school is necessary to change the number of people who can enroll in medical training. Medical education has to be streamlined and expanded. (Though this is a topic of a whole another article)


    Making these changes would streamline medicine, set us up for a whole new set of potential improvements and improve all aspects of our life. However, many industries and lobbyists are not going to like this proposal one bit. I would love to hear what you are thinking about this proposal.
    If you like these ideas, I challenge you to get them in front of as many people as possible, especially people who are capable of influencing government policies.


    Oleg Tumarkin is the owner of FutureWorks Business Expert, a private business training company. He is an adjunct professor of business at Lakeland College, an adjunct instructor of business at Concordia University Wisconsin and adjunct instructor of business and IT atITT Tech Institute.

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