Neither the ACA nor the AHCA address the real problem in health care. The real problem is that healthcare costs too much. Neither bill solves that, they just rearrange where the money comes from.
What is the real problem? A system that has no price transparency and no competition, so the marketplace can’t work.
You want to fix healthcare? How to do it in a few simple steps:
1) Providers can charge whatever they want, but they must charge the same price for everybody. No PPO prices. No negotiated prices. One price for everyone, insured or not.
No more $10,000 hospital bills that they will chase the uninsured for with collection agencies, when the insured get a PPO price negotiated down to $3,000 or less. Every provider must offer services at the same price for the same procedure to everyone.
“You have money to buy insurance, so we’ll charge you less.” What?
2) All prices for healthcare providers have to be posted on their websites by Medicare procedure number.
If it isn’t on their website, then it’s free. And if you prove it wasn’t on their website when you had the procedure done, and they charged you for it anyway, it’s triple damages plus costs.
3) Allow flat-rate pricing for major procedures, such as a price-per-stent-installed or per-knee-replaced, rather than a la carte for each Medicare procedure number. Flat-rate pricing can eliminate guesswork for the patient. The provider can spread the costs of complications across all procedures. Simplifies billing.
4) Allow charity pro bono medical work. Currently Medicare must be the lowest price, so doctors cannot charge the legitimately indigent lower prices.
5) Provide some broader method to cover indigent visits to emergency rooms. Right now it is on a per-facility basis. Combined with the “must treat” policy, this is driving hospitals out of poorer areas. Either state-wide or federal sharing of these costs across all facilties, or outright federal reimbursement to facilities.
One solution would be to account these at the state level, and then reimburse them as part of Medicaid, or under the Medicaid organization. Without some relief, hospitals will move out of poor areas. Further, hospitals will have a hard time competing in an open market against providers who do not have emergency rooms, such as imaging centers, surgery centers, etc, since they must spread the indigent emergency room costs across other services. So get rid of the unfunded part of the mandate and its hidden costs and get the costs out in the open. Let the entire market share these costs. One way would be federal funding.
The other things that’s strange about the current unfunded mandate is that emergency care for the poor is funded by other people who are sick and facing big hospital bills. The healthy take no part in funding this care for the poor, which is of general benefit to society. Right now it’s a tax on the sick. Some broader funding mechanism seems appropriate.
6) Enable private healthcare fraud investigators with 10% or 20% bounties on finding Medicare and insurance fraud. Let the private sector provide a more adaptive and more effective enforcement against fraud.
7) No 100% insurance coverage for anything.
The patient has to pay 10% or 15% or 20% of everything out of pocket, up to a maximum of $2000-$3000 per year. We can figure out which numbers work best later. This incentivizes the patient to shop prices.
8) No deductibles on which insurance pays nothing.
The insurance company should have some exposure up until the deductible is met, to incentivize insurance companies to assist the patient in controlling costs.
7 and 8 could be combined into something like 50-50 insurance and patient payment up to $4000 (so insurance pays $2000 and patient pays $2000) before insurance kicks in at 100%.
9) Allow health insurance purchase across state lines.
Get rid of the exemption, granted by Congress to the states, that sidesteps the Commerce Clause. No state insurance boards selecting which insurance companies can and cannot sell in their state.
10) Eliminate state and federal coverage mandates that force people to buy coverage they don’t want, and substitute a simple federal basic catastrophic coverage plan as the minimum health insurance plan nationwide.
11) Tort reform, to make costly defensive medicine unnecessary.
Limitation on pain and suffering damages. Actual economic damages, wrongful death, etc. are not limited. Perhaps the actual limit should be 150% of actual economic damages, so the plaintiff is 100% restored after the lawyers take their one-third contingency payment.
12) Insurance companies not allowed to drop you when you get sick.
13) No pre-existing conditions if you have been continuously insured. No refusal of insurance to anyone. One-year maximum exclusion of any pre-existing condition for someone who has not been insured.
14) An initial grace period with no pre-existing conditions and guaranteed acceptance even if you haven’t been previously insured, to get the system started.
15) Some sort of HSA system, where people can set aside tax-free dollars for the patient portion, and roll that into their IRA if they don’t use it. Can be inherited tax-free if it is rolled over into another HSA.
16) Tax deductions for all medical expenses, both for insurance premiums and the patient portion of expenses.
17) Get the AMA — the doctor’s union — out of the business of certifying medical schools, and using that to limit the supply of doctors.
How much would truck drivers earn if the Teamsters ran the DMV? Would we have a shortage of truckers? What would be the education requirements for truckers? Would they be reasonable?
One solution is to split the AMA into a minimum of three associations — the BMA, CMA, and DMA — none of which can have more than 40% of the membership of all three taken together. Any of the three could certify a medical school or a hospital.
18) Get rid of the residency requirement for doctors from other countries coming to the U.S. to be certified.
This could be on a country-by-country basis, but OECD countries should probably be specified right off the bat.
19) Get rid of certificate of need requirements for medical facilities.
The cheapest groceries are when Kroger and Marsh are across the street from each other, not when there is only one grocery in town.
20) If a medication has been approved and in use in another OECD country for five years, it gets approved here automatically. No FDA requirements for approval.
21) Allow the free import of approved medications.
No more milking the American public in a closed market while selling wholesale overseas.
22) Change the dietary recommendations away from the discredited low-fat diet to a low-carb diet.
Obesity and Type 2 diabetes are being driven by the low-fat diet nonsense. Jelly beans brag “Zero Fat!” on the package. Order the FDA to abandon the existing food pyramid and dietary recommendations, and revise them in the light of current research.
23) At the end of every year, the government determines what the median Medicare spending per senior is for every age: 65, 66, 67, 68,…. Anyone of that age who had more Medicare spending than that, well, that’s OK. That’s what it’s there for. But if someone had Medicare spending below the median for their age, they get a check from the government for, say, 20% or 25% of the difference.
Example: Someone who is 65 had $4000 of Medicare spending last year, while the median spending in the age 65 group that year was $10,000. In January, the Medicare system sends him a tax-free check for $1200, 20% of the difference of $6000.
What this does is encourage people to go to less expensive providers, and to not go to the doctor for every little thing just because it’s free. It also encourages providers to charge less than the Medicare maximums if they can, in the hope of attracting more patients trying to save Medicare money. That is to say, it would restore market incentives even though the costs were reimbursed, which is the really tough problem to making Medicare pricing competitive.