We are having a great debate about
health care. Do we want a government sponsored program or a free market
program? Measured among our peer nations, the other advanced economies, our
health care system rates near the bottom. I do not care which party repairs our
system, or how it is accomplished, we need to become competitive with the rest
of the world. The two extreme views offered to American voters are not the only
possibilities, for there are many successful examples of other methods. We are offered
only these two methods by our bicameral political system.
The Democratic Party has put a
policy on the table, Obama Care is being instituted. It will be years before
the results can be evaluated, and many improvements will be needed. The
prototype, Massachusetts’ Romney Care enacted in 2006, has shown the need for
amendments and has a good record of improvement. The law was amended in 2008,
2010 and again in 2012, there is current legislation aimed specifically at
controlling cost. The voters largely approve, medical review is mostly
positive, and financial review is mostly positive. Americans never completely
agree on anything, and that seems to be why Romney Care does not get a 100%
approval.
The Republican Party has put no grand
policy on the table. They advocate a free market solution. They have bumper
sticker slogans such as Tort Reform. I live in Texas, we enacted Tort Reform
about 10 years back, none of the promised health system benefits has
materialized, some studies indicate that Tort Reform has been damaging. Tort
Reform is a small idea. We need a big idea to deal with a big problem. This is
a common problem with all of the Republican proposals. They have small ideas
with no examples of success.
Comparing the Texas approach with
the Massachusetts approach, Massachusetts has the lowest number of uninsured citizens;
Texas has the highest number of uninsured citizens; Massachusetts has seen
premium increases below the national average; Texas has seen premium increases
above the national average; both states have a shortage of General Practice
Doctors. The Massachusetts attempt has clearly improved their system; meanwhile
the Texas attempt has not shown measurable improvements. This is not an entirely
fair comparison since the Massachusetts legislation was a big idea, while the
Texas legislation was a small idea.
Our national debate rages with
emotion, a calm fact based discussion never happens. This total lack of
unbiased reporting makes any prediction about Obama Care impossible. What will
be the outcome of Obama Care? Well … pick your demagogue. This artificial smoke
screen has flustered me as I try to find any valid information or any valid
counter proposal.
Let me purpose an idea, a free market
idea driven by the profit motive. The free market is incentivized by economic
reward. What we need is an economic reward for corporations that improves
individual health outcomes. Under the current system the healthy young pay the
medical bills for the unhealthy old. This is used by the Republican Party for
another bumper sticker about generational warfare (This is a generalization,
there are young people that require medical services and there are old people
in very good health). This is actually an opportunity for free market reform. A
different approach about the healthy youth vs. the unhealthy aged is to take a
longer timeline view. When you are a healthy youth you pay for your own
unhealthy age. This is an accounting issue; currently the healthy youth that
uses no health care will have their premiums booked in the current year as
profit, while the aged user of health care is booked as a loss. If the accounting
rules were changed to amortize the health care cost over decades, the same as
capital investments, the corporations would have a financial incentive to keep
the individual healthy. Amortization would return the highest profit from that
individual that remains healthy the longest. Corporations would seek to maximize
profit by delaying diabetes, heart issues or excessive weight. This would
differ from the current system where corporations seek to maximize profit by
cancelling an individual’s insurance for health issues.
There would be tracking problems as
individuals change insurance policies and companies. Corporations have the
managerial skill to solve tracking problems, as long as there is a profit for
doing so. By changing the accounting methods, the profit motive will generate
new and novel health care solutions, the profit motive will lower health care
cost by making healthy people profitable. In our current system the largest
profit, for doctors and hospitals, comes from unhealthy people. The higher cost
of health care services are passed on by the insurance companies (plus a little
for their trouble), here also, changing of the accounting methodology changes
the end results.
Call me crazy, for I certainly am,
but at least I have purposed a real, system wide, free market solution.
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