Is universal, budget neutral healthcare achievable? Yes, just look to CMS….
But not for the answers, rather for the dollars to fund it.
Universal Healthcare. The sound of it speaks to compassion, fairness and security. However, a common misconception has occurred in the United States falsely equating Universal Healthcare with Single Party Payer (governmentally run) healthcare.
Ideas for affordable, universal, free market healthcare are being ignored by the special interest motivated current powers that be. The funding of which could be found within the existing budget of the Centers for Medicare & Medicaid Services (CMS).
CMS is a behemoth. It has a nearly 1 trillion dollar annual budget. If this budget was divided equally among the approximately 300 million american citizens, we could provide a ~$3,333 annual subsidy per person per year. If this were linked to relaxation of the rules governing the types of insurance people can buy, people could easily afford catastrophic insurance, Direct Primary Care (DPC) and the left over funds could be dedicated into a HSA like account that could role over year to year and be invested like a 401k. By allowing patients to invest the savings in a HSA like account that can then be invested, this investment would put more money back into the economy and act as a de facto stimulus.
By providing every American with a subsidy of a specified amount of money and putting them in control of that money, they could pick whichever level of coverage they desire and/or choose to purchase care directly at massively reduced costs. If they chose to spend more than this amount they would be welcome to do so, too. But this would ensure at least a minimum level of care to all Americans.
By placing Americans in control of these funds, it would incentivize them to function like consumers and providers the incentive to match these new demands. It would also allow the requirements placed upon the insurance industry to be removed and allow them to offer much more varied and cost effective products. This would flip the incentives in the current system.
It would also allow for innumerable new models of care to develop (DPC, etc.) which would meet the diverse needs of various people instead of the “top down”, one size fits all approach currently mandated by CMS itself. As innovation tends to come from unexpected places, the current “top down” approach of healthcare planning inhibits this innovation by limiting it to only the select few in the halls of power in D.C. who are constantly swayed by the voices of the special interests that squawk in their ears constantly.
Direct Primary Care (DPC) is an inexpensive membership model of primary care. These models tend to include all office visits, telemedicine, in-house testing and procedures. Basically, comprehensive primary care for one low, predictable and budgetable rate.
In DPC, the physician works directly for the patient and these offices have approximately 1/2 the overhead cost because of this streamlined approach. They are, thus, able to extend those savings to the patients, are freed to provide them superior care by putting more of those dollars into patient care instead of bureaucracy and are incentivized to do so as they actually work for that patient.
These clinics tend to have in-house pharmacies with extremely inexpensive generic medications, labs and negotiated discounted imaging.
- Ex: physical exam battery of labs for $13.30
- Ex: 1 year of Lisinopril (blood pressure medicine) for $4.44
- Ex: MRI for $275
These types of programs synergize extremely well with inexpensive stripped down high-deductible insurance plans. These largely do not exist today (see rates from prior to 2013).
EX: Prior to 2013, a 36 year old male could get catastrophic insurance for ~$60/month and combined with a DPC practice at $39/month that patient could get insurance and unlimited primary care for only $99/month. Additionally, they’d have access to massive discounts on the services needed beyond that clinic (see meds, labs and imaging referenced above).
By working for the patient, these doctors shed the label of “gate keepers” or restrictors of access to the medical system that the insurance driven system encourages and instead are restored to patient advocates and screeners for disease. A subtle shift that flips the doctor patient relationship on its ear and entirely back to its true intent. Away from the current concept of obstructors to care “gatekeepers” and instead to facilitators of care and patient advocate screeners for disease.
Quality measures and extensive central bureaucracy become much less needed as the control of healthcare moves from the government back to the individual. Thus, significant savings can be achieved at a governmental level too.
By dedicating $3,333 to each American, the average family of 4 would have $13,332 from which to purchase medical care, save money in a HSA and purchase catastrophic insurance annually.
By rolling over year to year, the amounted saved in an HSA would function as a pool of resources that the patient could access if they do encounter unexpected health problems and reduce greatly the risk of them becoming financially decimated by an unexpected expense.
This could cover nearly all Americans for less than 1/3 that currently spent in healthcare in total (>3 trillion dollars annually in the U.S.) and equal the amount spent by CMS alone (so the funding is already there). This does not even include the savings from State Medicaid budgets or the Veterans Administration (VA hospital system).
Though this would not fully fund all medical care it would come close. There would be a small subset of chronically ill patients that could exceed these amounts. Those few patients could be placed into State by State true high risk pools that could be run and supported at a State level from the existing Medicaid funds that those States would be freed from needing by using this Universal Healthcare plan. As an example, the State of Michigan budgets $17.5 billion annual to medical care. These funds could be reallocated as a safety net for those slipping through the cracks of the Federal program.
By doing this, we would change our system from a age based system (Under 65 traditional insurance and over age 65 Medicare) to a routine, Federal universal healthcare system and a advanced chronically ill State safety net system (irrespective of age).
As the patient’s would now own these policies, the policies would no longer be employment based. Personally owned they would be portable attached to the patient and not the employer.
Delinking insurance from employment would further free funds for cash strapped companies to reinvest in their core business or even provide pay raises in an era of stagnating wages.
By applying this equally to all Americans irrespective of income, this would eliminate the divisive class warfare argument that occurs with means tested programs, and thus help reunify our country.
Furthermore, innovation would no longer be stymied by the limitations of a befuddled special interest run payment mechanism that requires archaic codes to be developed before good ideas can be implemented. Instead innovation could occur unimpeded and implemented at the speed of business.
Physicians would also be incentivized to excel. For those that do, could adjust their price points to reflect that excellence. Those that did not would be forced by market economics to either improve or lower their prices. This would provide patients various price points to choose from as well.
It would give young doctors the ability to price their services at a level that allows them to grow their practices more rapidly and older physicians the ability to price at levels that recognize their wealth of experience. This is a much better approach than the one size fits all system that is in place currently or the false big data proponent belief that a fictional metric can be developed that could account for all variables that determine quality.
Most importantly the patient, now financially empowered, would be restored to the center of that which we do and no longer simply be the substrate through which the financial transaction occurs between provider and the insurance/governmental payer. As the focus is always on the payer, this approach would empower the patient to be that focus.
To summarize, freeing the funds of CMS and instead applying them to a credit given to all Americans would provide a budget neutral way of accessing Universal Free Market Health Care and the true provision of care for all Americans. Not just insurance.
Wouldn’t that be lovely?Tweet