A Healthcare Brainstorm
Our ultimate healthcare goal is simple to understand - to reduce the cost of health care and health insurance while maintaining the highest quality of care for all. Yet, execution of this goal is not so simple. Obamacare in some cases did not go far enough and other cases needs fixing and updating to account for recent court decisions. Congress has had a difficult time proposing legislation to modify and repair OBAMACARE. A combination of past bipartisan proposals and new ideas are very much needed. Here is a 10-point proposal to amend U.S. healthcare laws in order to bring down overall costs without changing the basic system.
1. Eliminate the ban on negotiating drug prices for medicare/medicaid. The US spends over 300 billion dollars per year on drugs and Medicare accounted for over 25% of retail drug expenditures in 2016, with those expenditures rising nearly 5% per year The Veteran's Administration is already allowed to use its bargaining power to get lower drug prices. Granting similar power to the Department of Health and Human Services administrators will reduce costs for many drugs that are manufactured by more than one company. Sometimes patents give drug companies a monopoly on the sale of new drugs for a number of years, resulting in higher prices. In those cases, drug companies should be required to show, as part of the negotiation, how uniquely effective the drug is, how much it cost to develop, the profit it generates, and how much is spent advertising to promote the drug. This transparency should help negotiate a reasonable price while still encouraging research and development.
2. Require all hospitals (possibly physicians as well) to post on line and provide a copy to the patient all prices for services, procedures and medicines. This allows patients/consumers to be better informed, to shop for better prices, or if they want a specific provider then to at least discuss the charges.
3. Establish health savings accounts which allow any individual/employer to contribute any amount until a certain balance is reached. Contributions would be tax deductible in the year made and income earned in the account would be tax deferred (similar to IRA'S). Further contributions could be made whenever the balance drops below the limit. When an individual reaches Medicare eligibility, any funds left in the health savings account may be withdrawn at any time for any purpose and are taxed as capital gains rather than ordinary income. This system would provide a means of funding the consumer's share of medical expense and would encourage the consumer to stay in good health and save the money for purposes of his or her choice. A healthier population means less health care expense.
4. Eliminate current out of pocket/deductible payment procedures. Instead establish a uniform rule that patients co-pay a small percentage (such as 4%) of EVERY HEALTH CARE SERVICE provided. This co-pay must first come from a health savings account until that account has a zero balance, then from the patient's pocket. The co-pay from the account or out of pocket would generally be capped (such as at $5000 for an individual and $10,000 for a family) in any calendar year. The percent of co-pay and the cap would be income sensitive, dropping to, for example, 1%/$1,000/$2000 for those in the poverty level of income and increasing to 10%/$10,000/$20,000 for those with family incomes of for example, $250,000 or more. Health insurance would pay all expenses above the co-pay. This system effectively makes the patient a consumer because the price of care will determine how much money the patient pays. There is thus an incentive for questioning, bargaining and comparing prices, which in turn puts pressure on the provider to maintain reasonable charges. Health care is a unique commodity. While we don't purchase it as we would a car, it is important to inject free market forces as much as possible by letting the patient have a role to play
5. In order to receive tax deferred earnings on a health savings account, each year the owner of the account must certify she has health insurance covering basic care similar to Obamacare minimum coverage requirements. This provides a strong incentive to maintain health insurance.
6. As a further incentive to maintain health insurance, an individual, once eligible for Medicare, shall receive a modest reduction in Medicare Part B premiums for every full calendar year the individual has been insured with the basic health coverage.
7. Insurance policies that meet basic standard minimum requirements should be allowed to be sold across state lines, unless state insurance commissions can show good cause why a particular policy or provider should be excluded. This larger market for insurance would increase competition and drive down premiums.
8. Certain minimum coverage provisions such as in Obamacare, at a minimum no annual or lifetime caps, coverage on parent's policy until age 26, mental health coverage and coverage for pre-existing conditions should remain in effect, except that, as an incentive to maintain health insurance, after any period where the consumer chooses to be uninsured, pre-existing condition coverage starts only after the new policy has been in effect for 6 months.
9. The importation of prescription drugs should be allowed subject to Food and Drug Administration rules and regulations that ensure safety. Foreign made drugs are sometimes cheaper due to price controls, as well as market forces and better efficiencies. Importing drugs would add pressure to keep U.S. drug prices at reasonable levels.
10. A system of premium subsidies for low income individuals and families via tax credits should be expanded. This provides further incentive to have insurance.
The provisions outlined above reduce the cost of health care and insurance by making the patient part of the process as a consumer. Greater transparency will make the patient a better consumer. When patients ask '"how much will this cost" the answer should no longer be dependent upon type of insurance, deductibles or out of pocket limits but should be a straightforward number. By expanding insurance markets, consumer choice will be increased, and competition promoted.