(Mike Zahara) – Let’s begin with what Congress could easily pass tomorrow and save itself a whole bunch of seats that will otherwise be lost next year because they’re forcing through such a bad bill that reforms nothing and still leaves millions uninsured in the process:
1. Barring insurers from canceling existing policies because beneficiary becomes ill and bar bonusing for such cancellations. Two page bill.
2. Barring gender discrimination in coverage costs. One page bill.
3. Ending McCarran-Ferguson’s health insurance federal anti-trust exemption. Two page bill.
4. Allowing for all health insurers to compete in all 50 states. Two page bill.
This foundation for the beginning of real reform is really that simple and need not be hundreds or thousands of pages of legislation. As we’ve stated before, each additional page is staffer and lobbyist interferences and special interest protections.
The meatier and tougher issues must be passed off to the National Commission for Healthcare Reform where legislation may be created by a diverse set of citizens mandated to come up with real reforms free of undue interference and influence similar to what our Base Realignment and Closure Commissions have successfully accomplished.
And there are really tough issues to address. We have current Democrats hell-bent on planting the seeds that will result in ‘single-payer’, failed British-style, ‘Medicare for all’. Then we have current Republicans hell-bent on open-markets with no restrictions on the private sector at all.
Both are unrealistic and not sustainable, but both sides have supported ‘do-able’ goals that should be part of the various pieces of legislation the Commission would send off to Congress for straight, up or down votes.
The appointed Commission should be paid very well, each member given an executive assistant, and be able to travel home each weekend and travel the country gathering information; all on taxpayers.
Their mandate is that important that we ensure that we get the best available and take care of their needs. That said, I think we need a Machinist from Minneapolis and a teacher from Topeka as equal members too. Different backgrounds and talents are key to the Commission’s success.
All processes should be as open as transparent in real-time as possible. I really do believe the basics of the BRAC formula will prove successful over at least the next decade because this has to be done incrementally.
Their mission has to be broken up into major segments with only each segment dealt with at a time:
1. Private Insurers, Medicare, Medicaid, Tri-Care
2. Doctors, hospitals, labs, and other primary care providers
3. Pharma and device makers
4. Citizen lifestyles and risk factor containment
5. Legal issues and 10th Amendment concerns
6. Revenue streams and cost containment
7. Unintended consequences and adjustments
Private Insurers, Medicare, Medicaid, Tri-Care: It is inconceivable to me that persons from the private sector and with a business background would not immediately write legislation to force competition in the private insurance market. This is easier said than done and more than repealing their McCarran-Ferguson protections.
Doctors and hospitals absolutely don’t want 50 state competition because private insurers are currently over-paying them to make up for differences between Medicare reimbursement rates and private rates. That difference can be upwards of 20% and creates a false revenue stream.
The Commission may come up with a formula that private insurers may not reimburse more than say 5% over Medicare rates and that would have the effect of forcing providers to come up with different business models that are not as dependent on subsidies to operate and operate in the real world of supply and demand.
Once this gravy train is stopped, economic reality will set in as private insurers cut their reimbursement rates and force providers to come up with streamlined delivery of patient care.
This aspect could also set up a 10th Amendment showdown with some states as in order for this to work; the 50 states would have to agree to give up a high degree of control over health insurers in their states. 50 different state rules, plus the federal government’s, make for a bureaucratic and costly mess.
The hook of offering the states the ability to ‘opt-out’ of Medicaid may be the offer no state can refuse.
Another major issue between both government and private insurers is the lack of a single standard that all must follow. The Commission would also likely streamline and standardize all forms and paperwork, establish e-filing of all to simplify the processes for all providers, and each individual insurer and care provider would have their own separate access into the system.
One single universal computer access billing & coverage platform for everyone would save billions.
We’ve included the Veterans Administration’s Tri-Care into the mix because it doesn’t make much sense not to include them. The issue here is different cultures between two gigantic cabinet level federal bureaucracies, both providing healthcare services. Both should be operating on the same HHS platform for greater efficiency and the VA people can access their clients on it.
For all its faults, Medicare has made great strides cutting outrageous reimbursement rates and in making its platform and printed materials easier and understandable in plain English, and combining the federal product with the private product onto a single computer platform has to have both entities on board.
I believe the Commission would see little value in the continuation of Medicaid that also has 50 different versions. Rolling Medicaid recipients into Medicare seems a no brainer, but integrations and how that would be paid for are enormously difficult issues to address and are perhaps the toughest aspect of overall ‘reform’.
I don’t believe any real reform is possible unless we sunset Medicaid and enroll those persons into Medicare. The states can’t afford Medicaid and the wild differences in who is eligible in what state and what is covered has never been addressed in Congress or the courts.
Current Medicaid recipients would also have to pay something and/or give up something. Whether that is their Earned Income Credit, federal tax return, or reasonable co-pays for all care visits, maybe all three; no one should ever assume that they don’t have a civic responsibility to contribute to their own healthcare.
I am confident the Commission would also double the Medicare payroll tax from 1.45—very difficult to do in a tough economy—from both employee and employer and ensure the tax is paid for all income, earned and unearned.
I have a high degree of certainty that the Commission would work to create incentives to the private market to absorb those who cannot get insurance because of pre-existing conditions, and would set the model of expediting those who still cannot get coverage into the Medicare system in a more expedited manner with a more a reasonable premium structure too.
A single national standard for what is a pre-existing condition making one eligible to purchase Medicare coverage would perhaps be the hallmark of the Commission’s work.
The affect of all of this effort in this segment would be to drive down costs; the king of all that is missing in the current efforts before Congress. Private insurers competing with each other would end the generous over-reimbursements that have completely skewered the healthcare marketplace and forced various beneficiaries into intractable corners that they refuse to give up.
In a few words, no reform is possible without free and open markets to set costs based on supply and demand and drive efficiencies to provide the best service at the lowest possible cost. This is by definition the only way to get a hold of an out-of-control system that currently operates in a regiment of government protections that have insulated them from open markets and have harmed us all.
The entirety of the Medical Industrial Complex has paid billions of dollars to politicians in both parties over the years to ensure those protections.
The Commission would finally end this and open the free markets so that we may know what real costs truly are for the first time in over 60 years.
Doctors, hospitals, labs, and other primary care providers: No more powerful and pampered a group is this collective of industry protection because they, above anyone else, reap the benefits of a system that skewers everything in their favor and inflates their value that the marketplace wouldn’t sustain.
For-profit doctor practices and hospitals should have never been allowed to be created in the first place, and they are so powerful that even grandfathering them and barring future entrants can’t even be reasonably discussed.
Many doctors cry in unison about Tort Reform and I will concede that efforts towards that end would have to be included in any ‘reform’. However, these same doctors proclaim a ‘defensive medicine’ approach disguising that their fee-for-service approach pays them more for each thing that they do.
They also have a pure profit motive to order more and more tests and procedures, so their argument that all their problems are tort and that they are ‘patient-centric’ and all reform should be too, conveniently neglects to mention the very pertinent fact that fee-for-service encourages them to lard up their bills.
That’s got to end and a concept called ‘capitation’ is the better approach that the Commission would try to embrace. It’s basically an all-inclusive, flat-fee approach per treatment of any particular malady that would include all lab work, x-rays, specialists…under one flat-fee arrangement for all work done and care given.
It also greatly eases medical billing as only one flat-fee is involved, creating greater efficiencies.
Doctors and for-profit hospitals hate this concept, though it works very well all over the world. They hate it because it deprives them of unearned revenue and would force them into marketplace realities instead of sticking private and government insurers with the enormous inefficiencies in healthcare delivery that they mistakenly blame solely on malpractice litigation.
The Commission is sure to reward those providers who embrace the all-inclusive ‘capitation’ approach to patient care, as they absolutely should.
Nothing would prevent doctors and hospitals from charging whatever they feel they could get from cash paying customers, but would severely limit the outrageous reimbursements for unnecessary, for pure-profit only wasteful care.
Ending fee-for-service is the only reasonable option if we are to achieve real reform and I am confident the Commission would deliver to Congress a workable solution.
Pharma and device makers: It’s hard to imagine a more arrogant segment of American industry than this very powerful concern that demands everything from taxpayers, patients and providers alike, but gives little in return.
It surprises most people to learn that this industry’s stockholders rarely bear the costs of Research and Development of new drugs, treatments and devices; they’ve carved out an outrageous scheme that has taxpayers picking up those costs…and delivering to them 18 year exclusive patents!
To add insult to egregious injury, they as a collective concern, haven’t cured anything since polio in the 1950’s because there is no profit in cures. They are one of the most generous donors to political campaigns.
Seemingly singularly focused on ‘lifestyle’ drugs like Viagra and spending tax-free advertising dollars around the clock on television ads they were so bold, and actually got, a commitment from the previous administration to bar the government from negotiating lower prices for pharmaceuticals.
They’ve offered 80 billion back currently, but raised all their prices at the same time!
Clearly, the Commission would limit patents to five years for any drug or device that had so much as one dollar of federal money or tax breaks for R&D. They would also authorize all interested parties the ability to freely negotiate prices without any limitation at all.
They may also include a ‘domestic content’ vehicle that would require manufactures to make their products—from bandages and pacemakers, to life-saving drugs—here as opposed to China or other nations where standards are nonexistent. They may also open up more competition with nations that have equal quality control requirements that we do, so as to drive down costs, and they may authorize the FDA to implement stringent standards for all participating in the US market.
(Mr. Zahara publishes the WatchdogWag.com blog)