The Big Picture

The healthcare issue is much too important to be confined to the narrow corridors of political discourse. It is obvious that the sausage making process of the legislature is incapable of producing coherent effective legislation in this regard. What is needed is a vision unclouded by the fog of party politics.

There are certain objectives that health care reform must be shaped by. These include bringing costs down, providing individuals with incentive for pursuing healthful lifestyles and providing for universal coverage.

In order to bring costs down measures that are sure to bring costs down must be made part of the reform. Regrettably, such obvious logic needs to be pointed out to the minds of politicians, where vote-getting supersedes all thought processes. This career-minded self-interest on the part of politicians prohibits them from dealing with some salient facts about the ever rising costs of health care. For example, one study has shown that two-thirds of healthcare costs are due to preventable diseases that are linked to tobacco, alcohol, drugs and obesity. Such diseases are preventable through individual behavior modification. Thus, one would reason, the impact of individual behavior on health care costs must be addressed for any comprehensive reform package to be at all effective in its cost cutting objectives, i.e., incentives for individual behavior modification must be included. But the mind-set of politicians prohibits them from making such logical connections.

Another way of bringing health costs down would be to have a single-payer system which would, of course, dramatically decrease administrative expenses for healthcare providers who now have to process a myriad of different systems.

The single payer system should not be administered by the government to protect it from political mindlessness. So, what I propose is a nongovernmental single-payer entity for setting up and processing medical savings accounts for individuals and families and for making payments to health-care providers. It would be a bank whose charter would be to operate a not-for-profit institution on behalf of individuals and health providers. Let’s call it a health facilitation bank. It would handle medical savings accounts exclusively.

Now, it’s important to note that this bank would not actually be making pay-outs to health care providers but would provide documents, like checks, with which account holders would be able to use solely to pay for their medical expenses.

The incentive for individuals to pursue a healthful lifestyle would be that whatever money in their medical savings accounts not spent on medical costs would be theirs to keep. The bank would of course be earning interest on its investments just as a normal bank would but the profits would go back into the health insurance pool and also into the savings accounts as interest earned on individual deposits. That interest would be rather substantial since the bank would be operating as a not-for-profit institution.

Now, the population of the US is approximately 300 million. So, with full participation by every adult and those with children providing an account for each child that would amount to an enormous amount of deposits. An average deposit of say $50 a week would amount to deposits of 15 billion every week, or 780 billion every year. This plus interest on investments equals a considerable pool of money.

Now, individuals would be responsible for paying their own medical bills but they would also be backed up by the bank. For instance, let say I have an account of $10,000 and I have a medical procedure costing $20,000. So, $10,000 out of my account is paid to the health provider and the other $10,000 is paid by the bank. But my account is now overdrawn by $10,000. Now let’s say the bank pays half of what I owe and the rest is paid off by me overtime with a low cost, low interest loan. The loan is paid off by making deposits to my savings account and they would be considered as normal deposits accumulating and earning interest. If over the next ten years or so I have no major medical expenses and my account without the debt would have been $30,000 would actually amount to, say, $25,000.

If an individual opens such a medical savings account at the age of 20, pursues a healthful lifestyle and for the next 30 or so years has minimal medical costs, by age 50 that person would have accumulated a rather large amount of money in their account to take care of any increased medical expenses one might incur in one’s later years. If one acquires a family along the way one would probably put more money in their medical savings account and instill good health habits in their children. Parents would have to pay for their children’s medical expenses but they would also know that the bank would be there to back them up if needed. Of course, the thing to remember here is that with this system medical costs would be much more reasonable than they are today. One’s medical costs would be affordable within one’s budget.

Everyone would be encouraged, or perhaps mandated to open and keep making regular payments into their medical savings account providing the bank with more and more money to invest and to spread around as needed for account holders. A culture of pursuing healthful lifestyles would also be part of the picture. Doctors could retain their fee-for-service arrangements but the bank would also offer bonuses as incentives for doctors to keep costs down while providing quality care.

Medical procedures would be decided upon solely by doctor and patient and would be eligible for financial assistance if needed. Elective surgeries would not. They would not be eligible for any payments issued by the bank to cover a resulting deficit account. Medical treatment needed as a result of smoking, drinking, drug addiction and preventable obesity would also be ineligible for back up funds.

It’s important to note that individual depositors would not be charged for anyone else’s expenses. Whatever subsidies the “bank” would need to cover would be furnished from the general pool. Like any bank, one’s deposits are not kept in a drawer with one’s name on it, everyone’s money is used for bank business while individual accounts still show the full amount deposited along with any interest earned. The “bank” would also be making conservative investments, thus, earning interest on the considerable amount of money that could be used for such. The bulk of that money would increment the general pool along with paying the relatively modest salaries of staff of the non-profit institution.

When pay outs to health care providers were low more money would be available for investment by the bank and one’s money would be earning higher interest. From this it is possible for every individual to develop a sense of being directly connected to the society as a whole. One’s own health and well being would have a positive influence on the health and well being of the whole social organism. The whole society emanates directly from each and every individual.

Tort reform would also have to be part of this package to lessen the cost of malpractice insurance for doctors. Doctors could network with one another for diagnostic and treatment purposes and receive authorization from their patients to proceed as agreed upon. In other words, patients would be brought more into the process of deciding how best to proceed. The patient must put his trust in his doctor’s judgment and be an assenting partner in all procedures and, also, in procedures not utilized.

Egregious malpractice by a doctor would result in the loss of their license to practice medicine.

Another benefit of this system would be to the economy whereas businesses would no longer be paying for employees’ health insurance plans. This would free up a lot of money to invigorate the economy and produce more jobs.