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U.S. Healthcare: Working Toward a Real Solution   (May 23, 2006)

As this chart so chillingly illustrates, healthcare as currently configured in this country will drive us into national bankruptcy. (All that future Federal spending is largely Medicare and Medicaid.) We as a nation need a solution soon-- and not a solution delivered by poo-bahs in think tanks or the healthcare lobby (oops I meant to say "Congress"), but a solution which can be understaood and embraced by those who will have to live with it, i.e. us, the citizenry.

Just to cover how bad off we are as a nation, consider these data points: we spend more on healthcare per capita than any other nation, fully 15% of our stupendous $12 trillion GDP, and yet we are far less healthy than the populace of England, which toils under a parsimonious rationed-care national system: Middle-aged Americans are puzzlingly sicker than their English counterparts (from The Economist).

As if paying a fortune to be in poor health isn't bad enough, the Census Bureau counts 45 million uninsured, and a recent Commonwealth Fund study found 41% of moderate- to middle-income adults did not have health insurance for at least part of 2005, up from 28% in 2001. A Harvard University study found medical bills were a factor in half of consumer bankruptcies.

To sum up: you couldn't design a worse system than ours if you tried. Millions uninsured, hundreds of billions wasted in paperwork, fraud and needless "care," and after spending $2 trillion on healthcare, we're significantly less healthy than our counterparts elsewhere.

Where do you even start in designing a solution? I turn to Charles Ruland, an astute reader with a frontline understanding of our current system, for a knowledgeable and very sensible outline of a national healthcare plan which wouldn't bankrupt us and which would undoubtedly provide better, more efficient care to all our citizenry than our current mess of a system.
So please read on. (I have added occasional bolding for emphasis)
Your question about the "best solution" to our long-term health care cost dilemma...aaah, now you are asking me to tame a monster! But I have a few opinions. Here goes.

First, I do feel that Canada and England and other socialized medicine countries are absolutely the wrong direction for the U.S. Why? Because socialized medicine strips people of "choices." It rations care. In Canada as you probably know, provinces are given a certain amount of money per year. And when those funds run out, that's it. Doors close if they run out in October, November or whenever. And people have to wait till next year.

My wife has an Australian friend. She lives here now but her family is still in Australia. Her mother had a degenerative hip. She was put on a waiting list for a hip replacement---since it was not "life threatening." She waited and waited. Finally after several months she got the hip replacement. But there was a problem. An infection set in. They treated the infection and she stabilized but it became apparent she needed to get the first hip replacement fixed/replaced. Back on the waiting list!!!

I am not an expert on socialized medicine but I do know when you take away choices and restrict access to private care then what inevitably happens is the quality of care degrades. You're saying, "we'll only pay this much for that." And so you only GET this much for that. Whereas if you allow people the ability to pay whatever the going price is for something, you'll usually get the best money can buy..and why not?

Now here's what I would do and I've thought about this a lot. I feel as a country we need to have a serious "conversation" about healthcare. Debate the points, pros and cons and make the hard decisions.

One of the first things we should be educated about is the "real" cost of healthcare. People are oblivious to what things cost! The truth is we've been spoiled. We've been shielded from paying the $70 a doctor charges retail. (and on the other hand, we've been gouged by $10 aspirins and stuff like that!). So the first thing I would do is try to bring some transparency to the public...eg. MRIs cost $1,000....X-rays cost $350... Shed all the bureaucratic layers and parties involved in the transaction.

The second thing I would talk about is the purpose of "insurance." The true purpose of insurance is to protect you in the event of an accident or illness. But not just any accident or illness. But something that has severe financial repercussions and is unpredictable and unexpected.. Things like infections...diseases...kidney stones in the middle of the night....stuff like that. Insurance should be purchased for these high-dollar setbacks that come every so often and can wipe us out if we don't carry insurance. People may not like this, but I think this means we revisit high deductible plans.

The far more controversial part of this is the following: Americans are over-medicated, overweight and way too dependent upon doctors to "practice" their medicine upon them. We need to eat healthier, get more exercise and only see the doctor when we're willing to pay the cost ourselves.. For the "little" things that insurance doesn't cover...e.g. sinus infections.

The tough question is what do we do with the 40 million+ Americans who don't have health insurance? The question we need to address is, do we believe that all Americans should have access to quality medical care? Ok yes, I think we do. All Americans, regardless of income, should have access to basic healthcare---emergencies, serious illness, etc. And for the majority of us (all except 40+ million!) if we come down with hepatitis we go to Kaiser, we pay our $50 copay...but we don't die and we get the quality healthcare we need.

But let's talk about those 40 million+ Americans who are uninsured. This is where the rubber meets the road, isn't it? Since the mid 1990s with the passage of HIPAA (Health Insurance Portability and Accountability Act) we've had guaranteed "access" to medical coverage. Employees leaving jobs and who take COBRA are guaranteed access to a plan once they exhaust COBRA. But at what cost???

The law doesn't guarantee a a low cost plan or even an affordable one. Lots of 50-somethings are definitely "uninsurable." They're taking medications and have conditions which no insurance company wants to pay for---and who can blame them? They're in business to make a profit.

Truly this topic is quite complex and I'm certainly not doing it justice in a few paragraphs. I'm sure my ideas need much rounding out and I'm sure many would say I'm just plain wrong! But I've wrestled with this. I deal with these people in my business. I feel what this country needs is to keep a private healthcare system alive. We shouldn't go the socialized route, as that would be disastrous.

But here's an idea for you: Why not make health insurance like auto insurance? Make it mandatory that everyone over 18 (and out of the house) pay for a "standard" plan. This plan would cover only serious illnesses, hospitalizations etc. (not routine office visits, x-rays etc, preventive check-ups, which are expensive and drive up the cost of health insurance!).

The premiums for this standard plan could be based on age, health and ability to pay. So for example a young 20 yr-old kid with no money and in good health (and a low risk to the system) would pay very little. An old, sick but rich person would pay the most. An old, sick and poor person would be given special consideration because they don't have the means to pay. In fact anyone below a certain income level would pay little...but it's important they pay something.

The idea is to make insurance easily understandable. Make the cost of it simple and fair for everyone and not penalize the rich just because they have the means to pay. They may be rich but represent little risk to the system because they're as healthy as an ox and they haven't been to the doctor in years!!

But here's the second part: On top of a basic health insurance plan---which has a high deductible---we have private health plans with more comprehensive coverage for those who are able and willing to pay extra. These plans would be similar to what we have now...with a a lot of competition based on price and coverage. Those who want more insurance protection, and who have the means to pay, simply "buy up" to what they need.

Anyway, that's a very rough draft of a "solution" to the long term health care challenge. First people need to understand why we have insurance. Second we need to make health care a more efficient and "transparent" market. Just because it involves health doesn't mean we can't talk about cost. After all, buying and selling is going on!! Third we need to get healthy again and stop running to the doctor for every ache and pain. Fourth we need high deductible, low cost plans (which Bush has been advocating).

And last but certainly not least, we need to build a healthcare system that will last thru the 21st Century. To achieve this we must create a system where everyone pays in and everyone receives care, regardless of their ability to pay. But we keep the private healthcare system for those who want to pay more for more coverage.

I probably need about 15 more points...but hey, that's a start!!
Does this plan make sense to you? It certainly does to me. Thank you, Charles, for an in-depth and very thoughtful presentation of a workable national healthcare plan which people might actually accept.

Once we get the uninsured / minimum coverage problem resolved, we can tackle the equally divisive issue of improving the actual care. For a primer of how poorly we're faring in terms of care, read BusinessWeek's lead article, "Medical Guesswork: From heart surgery to prostate care, the health industry knows little about which common treatments really work."
Sobering reading, indeed.

For more on this subject and a wide array of other topics, please visit my weblog.


copyright © 2006 Charles Hugh Smith. All rights reserved in all media.

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