Stanley Feld M.D.,FACP,MACE
President Obama has declared over and over again that no one has presented ideas better than Obamacare.
I believe he has no interest in listening to anyone.
President Obama fooled many people with his intentions, including me. The traditional media is finally catching on to him.
All of the stakeholders are at fault in causing the dysfunctional healthcare system. The dysfunction is the result of all the stakeholders trying to adjust to ever changing government regulations during the last 48 years
Obamacare is making that dysfunction worse.
A consumer driven healthcare system is the only way to Repair the Healthcare System.
I think President Obama wants the healthcare system to fail. He wants to prove that the free market cannot succeed.
He is deaf to the fact that the healthcare system is not a very free market system. Government regulations, tax favors, and tax barriers over the years have interfered with the free market in healthcare.
The Affordable Care Act (Obamacare) intends to transform the health-care system, extend coverage, reduce costs and increase quality—all without asking anything of the patients.
Consumers will pay with higher taxes, of course, but otherwise will face no incentives to make wise choices, compare price with performance or shop for value.
Doctors, hospitals, insurers and, most of all, the government will do that for them, which is hardly reassuring.
This reflects what I call the "impossibility theorem" in health care. The impossibility theorem maintains that patients cannot make good choices, but, rather, must be dependent on the well-intentioned decisions of others.
Policy makers believe this theorem by definition. But, just to make sure, they have structured the health-insurance system to ensure that patients are never asked or allowed to make price-conscious choices.
The arrangement underlies the innumerable rules, subsidies, entitlements, mandates and prohibitions that collectively make health care the least efficient part of the economy.
ObamaCare makes it worse.
I do not think consumers believe or trust President Obama. Consumers certainly do not believe “the impossibility theorem.”
Consumers are ready for some common sense healthcare policy. They just do not know what to do.
Consumers must be given incentives to control healthcare costs. This can be done in several ways.
Consumers must be put in charge of their health and healthcare dollars.
The central pillar of effective healthcare reform is the creation of a system that forces the healthcare insurance industry to be competitive and answerable to consumers.
Consumers must have incentives to control costs. This, in turn, would force hospital systems and physicians to be competitive and reduce costs.
The government’s role should be to empower consumers to have greater control over their healthcare decisions, their health, their healthcare dollars and their healthcare coverage.
The government should teach consumers to make educated choices in their healthcare decision-making.
Price transparency of healthcare fees and parity of tax deductions between the individual insurance market and the group healthcare insurance market is essential.
It is fool hearty to assume that the redistribution of wealth, raising taxes by means testing and price fixing will solve the problems in the healthcare system.
“Why on earth would we want a system, especially with something as personal as health care, where all of these free market signals are lost, and insurers responding to regulators, not to us?”
Entitlement programs have never produced free market efficiencies. Entitlements have created unsustainable, unfunded liabilities.
Leadership must face this problem not add to the problem.
In the past seventy years medical advances through research and technology have improved medical care and medical outcomes. Medical advance has focused on fixing diseases after they have occurred.
Consumers are the only ones that can prevent most medical and surgical problems.
They can prevent most chronic diseases such as Type 2 Diabetes, heart disease, lung disease and others.
Consumers are also the only ones that can prevent the costly complications of a chronic disease.
A healthcare system must be constructed to incentivize consumers to be responsible for their health and healthcare dollars.
Eighty percent of the healthcare dollars spend on diabetes care is spent treating the complications of diabetes.
A healthcare system must be developed to align all of the primary and secondary stakeholders’ incentives.
Only consumers can align all the stakeholders’ incentives.
Government control of the healthcare system cannot and has not aligned those incentives.
Right now we are seeing bureaucracies making a $634 million dollar error with healthcare.gov. This is only the tip of the iceberg for the problems in store for Obamacare.
The solution is not a single party payer. We will have the same problems or worse because of the expansion of Medicaid. President Obama’s hope was the cost of increasing Medicaid would be shifted to the states.
The increase in cost will increase the federal deficit and unfunded liabilities.
A healthcare system must be constructed to empower consumers. I have written in detail about my ideal medical savings accounts.
I have pointed out that it can be very democratic. Everyone can be insured while decreasing the costs.
The ideal medical saving accounts will motivate and empower consumers to save money by staying healthy, staying out of the emergency rooms, and decrease over testing and over treatment.
Consumers would be motivated to shop for the top value and quality care.
The government would require providers to publish the discounted prices paid by the government and the healthcare insurance companies to all consumers.
My ideal medical saving account would incentivize consumers to save money. It would be the responsibility of consumers to shop for the best price at the best quality.
Consumers would carry their medical records digitally on a flash drive or on their smart phone to avoid over testing. They would reap the financial benefits of these cost savings.
Consumers, after the initial $6,000 dollars was spent, would receive first dollar healthcare coverage.
I have always been satisfied with the front-end incentives. I have never been satisfied with the catastrophic coverage. It does not provide financial incentive for consumers to save.
I finally figured it out. Consumers would continue to receive first dollar coverage if they spent over the initial $6,000 after the initial stakeholders.
The discounted hospital, surgical and medical device costs would be published along with outcomes.
Discounted prices for services could also vary for the same services. The outcomes could be the same.
A hospital system with better outcomes should receive more. If the hospital system negotiates a higher fee than another hospital system but has the same outcome the consumer should be liable for the difference.
In this way the decision for choosing the provider is in the hands of the consumer.
Combining my ideal medical saving account and “reference pricing” will incentivize consumers to be in control of their healthcare costs and their health and healthcare dollars.
Consumers should receive pretax dollar treatment for all expenditures.
Consumers will then shop for price and quality to their financial advantage. This will incentivize providers to compete on both price and quality.
The Oklahoma Surgical Center has forced local hospitals to do just that. The Surgical Centers’ online prices were one half to one fifth the prices of the local hospital. The hospital centers are now starting to compete on price and quality.
The combination of the ideal medical saving accounts and reference pricing will incentivize providers to be aligned with consumers’ goals.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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