The solution to repairing the healthcare system is simple. The healthcare system must be consumer driven. If consumers were in control of their healthcare dollars and were responsible for their health and their healthcare choices the cost of the healthcare system would decrease to manageable levels.
My ideal Medical Savings Account puts the consumer in charge. Its success is totally dependent on real transparency by all stakeholders including healthcare insurance companies, hospital systems and physicians.
A Health Savings Account does not give consumers enough of an incentive to shop for price and quality with the present lack of transparency. In a transparent healthcare system Medical Saving Accounts would provide more incentive than Health Savings Accounts.
Presently President Obama is trying to eliminate Health Savings Accounts. HSAs are the single greatest threat to his goal for a single party payer system. They are also the fastest growing healthcare insurance product.
The lack of transparency for hospitals, healthcare insurance companies, drug companies and physicians must be eliminated. The public must demand that the healthcare insurance industry make their expenses transparent so that its exorbitant salaries and profits can be clearly understood.
There is no reason that this one stakeholder receives 40% of every premium dollar spent either by private corporations or the government. The medical loss ratio as it is presently constructed by the Obama administration provides 20% for expenses. The other 20% of the $40% is in the direct patient care column.
The government should help consumers understand these prices and understand the measurement of quality. Consumers of healthcare must be turned into Prosumers of healthcare (Productive Consumers.)
When this happens the consumers can become independent intelligent consumers. Consumers will become independent of government and its bureaucracy.
The Obama administration wants consumers to be more dependent on government not less dependent.
Intelligent independent Consumers will force the other stakeholders to be competitive. Competition will drive healthcare costs down.
Government cost controls will not drive prices down. They will simply distort prices and cause more spending.
Private sources such as Angie’s list help consumers decide on which plumber to hire. It is important and creates competition and price lowering. However the defect in Angie’s list is that it is based on other consumers’ opinions.
It is not based on specific costs or origins of the cost to the plumber or the measurement of the plumber’s skill. It only deals with price and consumer satisfaction. Angie’s list does make plumbers competitive.
Competition for consumers will bring down the cost of healthcare. By forcing consolidation of doctors and hospitals Obamacare will decrease competition and increase prices.
Healthcare policy wonks dismiss this concept because they believe consumers are not smart enough or interested enough in learning to be intelligent healthcare consumers. They are wrong.
Their thnking is correct if a system exists where consumers are spending other people’s money. Obamacare is such a system. It will drive costs up just as the private first dollar coverage system has driven healthcare prices up.
There is no financial incentive for healthcare consumers to try to save money and preserve their health.
Obamacare is a huge entitlement with an overwhelming budget that will be impossible to execute. We have seen that to be true with ever increasing waivers and the most recent delay in the mandate until 2015. There will be delays in other critical portions of Obamacare in the near future. It could be delayed forever because it cannot be executed.
In my last blog I forgot to mention the delay in forming and activating the Independent Physician Advisory Board.
I also wrote about Canadian consumers’ healthcare experiences in two provinces I visited. The fact is the system doesn’t work well and is unsustainable.
The Fraser Institute in a 2011 report concluded that Canada’s health care system is spending money at an unsustainable rate. Six of ten Canadian provinces are on track to spend half of their revenues on health care, according to the institute.
By 2017, four more provinces — Saskatchewan, Alberta, British Columbia and New Brunswick — will spend half of their revenues on health care, according to the institute.
Total federal, provincial and territorial government health spending has grown by 8.1 percent annually. Canada’s GDP increased by 6.7 percent during the same period. The math is obvious. The Canadian healthcare entitlement system is not working.
“In response to the rapidly rising costs, provincial governments have raised taxes and rationed care, increasing patient wait times. Provincial drug plans have also more often refused to pay for most of the drugs that are certified as “safe and effective” by Health Canada.
“Unsustainable rates of growth in health care spending crowd out the resources available for other purposes including education, public safety, and economic growth-enhancing tax relief,” Fraser Institute Senior Fellow Nadeem Esmail told The Daily Caller News Foundation in an email.”
Only 20% of the people utilize the healthcare system at any on time. If consumers know they are entitled to healthcare and the healthcare system will fix them if they get sick, consumers of healthcare feel protected. The feelings of eighty percent of consumers who are not sick believe the system is great until they have to interact with the system. In this system of entitlement consumers have a tendency to not take care of their health. This makes them more likely to interact with the system in the future when they are very sick. The result is increasing healthcare costs.
Once an entitlement is created it is almost impossible to eliminate it even though it has proved ineffective and costly.
England’s NHS has shown this to be true. The NHS is struggling right now to modify the NHS so it works better for physicians and patients. However, the new reform rules have been contaminated with so many amendments that I suspect no progress will be made.
Consumers are realizing that Obamacare is much too complicated and impossible to execute. Rather than demanding repeal and eliminating the concept of instituting an entitlement program, the New York Times is publishing letters from readers that are demanding a single party payer system to simplify the system.
Let us stop making the same mistakes over and over again.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
Please have a friend subscribe