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    Health Care Reform in a Free Market
    Health Care Reform in a Free Market
    Health Care Reform in a Free Market
    Ebook99 pages1 hour

    Health Care Reform in a Free Market

    By Stuart Andrews, M.D.

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    About this ebook

    Universal Buck-Passing: Socialized medicine never works. It can seem to work for about fifty to seventy years as true costs are hidden and construed as increases in the "cost-of-living" or as nebulous, ill-defined tax increases, rather than increased, dedicated health care costs. The concept of “price at the point of service” is important, since it is easy to assume that it represents the total cost of care. Taxes to fund the system are actually hidden, compelled pre-payments. They allow point of service fees [payments at the time of service] to be discounted or non-existent. This gives one the impression of paying less or paying nothing. This is, in essence, a system of institutional buck-passing that hides, without eliminating, the true cost of care. Eventually these systems self-destruct due to the insatiable demand of a service perceived as free at the point of service; but not before creating severe shortages of the designated service.
    We need to uncouple people's health insurance from their employers’ apron strings by establishing equity in the tax code. You should have the same tax break whether you buy your insurance directly or through the boss. In consumer-driven health care individuals would receive the same tax deductions on their personally purchased premiums as those receiving employer-generated insurance.
    The Miraculous Cure That Never Was And Never Will Be: Prescription drugs are expensive in part because innovative development costs money. The baseline costs have to be recouped. If development costs are not recovered, or if the finished product - the intellectual property of the pharmaceutical company - is simply confiscated [by government], all innovation will come to a standstill. There will be no new drugs. And no one will miss that miraculous medication that never was and never will be. Nor will any politician be blamed for destroying something that never existed, but might have through research driven by the profit motive. Having said that, there are artificial, nonmarket forces we can eliminate, that further increase the price of new brand name drugs beyond their cost of production.
    Insurance: What Is It? Insurance is affordable because many people pay for protection from an unlikely, but catastrophic, risk. For home insurance "unlikely risk" would mean your home burning down, but not your windows getting dirty; for your car: collision damage, but not oil changes. Burnt homes are expensive to fix but unlikely to occur, whereas everyone washes their windows occasionally, and affordably. We try to avoid car collisions, but we all change our car’s engine oil regularly. Therefore, a fire protection [or collision repair] rider would cost a lot less than the price of rebuilding your house [or repairing or replacing your car], since all subscribers would pay a premium, but few would suffer fire [or collision] damage. On the other hand everyone would use the window washing [or oil-changing] benefit, so each individual subscriber’s premium would reflect the true cost of washing each individual subscriber’s windows [or replacing his oil]. To this add the insurer's overhead and profit margin. There would be no savings over just buying the service outside the insurance arena - directly from the service vendor.
    [Insurance] Pools can be statistical creations unattached to geography or workplace, if insurers are able to compete among the 50 states. Even if confined to a specific state, multiple large pools can be created independently of any employer.... The issue of "portability" is a moot point when pools - and insurance for that matter - are no longer employer-generated. Changing jobs or moving across the country would no longer be a "health care decision.”
    Summary: I list the effective elements in creating an ideal health care system that will be first class, affordable, available, accessible, and noninflationary, while accommodating pre-existing conditions.

    LanguageEnglish
    PublisherStuart Andrews, M.D.
    Release dateFeb 12, 2018
    ISBN9781370321940
    Health Care Reform in a Free Market
    Author

    Stuart Andrews, M.D.

    About Stuart Andrews, M.D. I have been a family practice physician since 1980. I am board-certified by the American Board of Family Practice. I have witnessed the decline of medicine as a profession over this time frame and have learned to understand it, at least at a gut level. This paper is an attempt to turn those visceral feelings into words, to clarify the current dissatisfaction with medicine for doctor and patient alike, and to offer solutions. I have seen many of my peers retire early or close their practices to new patients. More and more of the remaining viable medical enterprises are practicing assembly line medicine, where patients on metaphoric conveyer belts are “processed.” Most private practices have been taken over by hospitals or other large bureaucracies, where doctors punch a clock and do their time. Medicine is no longer a calling; it is simply a job. As it happens, I also ran for the U.S. Congress as a Libertarian candidate in 2000. I received 3% of the vote, or the highest number of votes per dollar spent [zero] on campaigning in my district. These experiences helped inform me regarding the mechanism of our health care decline and the limitations of socialism in general. I am not an insurer, politician, or attorney; I’m only a physician, with a relatively low-ranking in today’s medical foodchain. My testimony is experientially based, and - as a result - perhaps more to the point regarding how health care policy tinkering by elites affects behavior and outcomes at the ground level in terms of cost-effective quality care. We are experiencing a progressive decline in the number [per capita] of primary care physicians in this country. This could be construed as a de facto mini-Atlas Shrugged.* *Atlas Shrugged, written in 1959, refers to Ayn Rand’s perennially best-selling novel, which depicts the mysterious, progressive disappearance of society’s most innovative and productive, resulting in economic collapse - despite laws to the contrary. No wealth was left to redistribute. Stuart Andrews, M.D.

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      Book preview

      Health Care Reform in a Free Market - Stuart Andrews, M.D.

      Health Care Reform in a Free Market

      Stuart Andrews, M.D.

      Copyright: 2009-11-16

      Revised: 2016-7-3

      {Do not reproduce this document without written permission from the author; exception: short sections may be reproduced if the title of this ebook [Health Care Reform in a Free Market], the author's name [Stuart Andrews, M.D.], and the web site [andrews-publishing.com] are cited.}

      Preface

      The health care policy reform proposed here is based on patient-driven concepts originating with think tanks such as The Cato Institute and The Heritage Foundation. However, this is an original essay that depicts my experiential knowledge as a practicing family physician of how the current system works, failing patient and provider alike. I first learned of the concept of MSA’s [Medical Savings Accounts] from reading Stuart Butler of The Heritage Foundation. MSA’s evolved into HSA’s [Health Savings Accounts], and these were introduced into legislation in the George W. Bush years under the Medicare Prescription Drug Bill.

      My assertions and opinions do not necessarily reflect those of the above two think tanks. In fact, Cato, as a rule, discourages using the tax code to control behavior or to favor one segment of the economy over others [health care over tractor production, for example]. My recommendations do not evolve from an ideal world; but, instead, they originate from the base line of where we now stand, and the political reality that we cannot undermine those people currently favored by existing employer-generated health care benefits. Therefore, incentives prevail over mandates.

      My goal is to explain how we got here, why the current system doesn’t work, how it causes health care inflation, and why proposed public policy Bandaids have failed. I wanted to explain this in an accessible manner, so that even I could understand it, along with the lay reader. While the current system is unacceptable, the proposed socialist remedies from the left will make things far worse.

      Here in the U. S. we are no longer living in a purely free market. Perhaps a better title for this booklet would have been, Heath Care Reform in a Semi-free Market or even, ...in a Semi-socialist System. The solutions suggested do allow a role for government, albeit a drastically reduced one. To proceed otherwise would ignore the political reality that those currently receiving health insurance as an employer-generated benefit would resist reform. This is why Obamacare offers so many waivers. Any role allowed for government in this model of health care reform could devolve to privately-funded charity, when the nation so chooses to conquer its addiction to government largess.

      Footnotes are presented as active links to the original sources. Simply click them.

      A Short Glossary:

      The term provider can mean physician, practitioner, physician assistant, nurse practitioner, nurse, acupuncturist, chiropractor, naturopathic physician, physical therapist, occupational therapist, massage therapist, a hospital, a clinic, or any licensed professional person or entity delivering health care to a patient, while often billing third parties for the services rendered. The term, provider, is often used generically in this treatise - as is the term, physician - to broadly refer to all providers while maintaining clarity for the lay reader.

      Third partiesare payers, other than the patient, of health care bills. They can be health care insurers, government programs, HMO’s [Health Maintenance Organizations], auto insurers, or other entities - all of whom want an explanation of the service for which they pay, since they did not receive the service directly. Providers may have contractual relationships with these third parties, rather than with the patient.

      The terms price at the pump orprice at the point of servicerefer to the price the patient pays directly for a service received. He receives a bill and pays the vendor [provider], or he receives a bill and sends it to a third party payer [insurer, government agency, etc.]. This concept is important because in some health care insurance systems there are hidden costs that often precede the point of service costs. These include taxes, lost cash wages that are replaced with benefits, or pre-payments embedded into preventative medicine riders attached to, or infiltrated within, insurance policies. A government subsidized health plan can offer a lower point of service price than a private sector plan, because a large portion of the price is collected before a doctor-patient interaction takes place, and is kept by the receiver even when no interaction takes place. Therefore, the nominal price paid at the point of service can seem cheap and competitive to the recipient of the service, who has forgotten he [or his fellow citizens] had already paid a significant sum in another venue. In fact, when taxes are paid, the payment goes into a black hole, and that portion dedicated to health care accessibility is never recognized as such. So, in the eyes of the consumer, the point of service price is the total price, and it can appear to be a bargain. The tax payment seems unrelated to the cost of care.

      Gender Issues [politically-correct disclaimer]:

      I may occasionally use the male pronoun as a general term, referring to a provider or patient as he, instead of he/she or she. This is merely a convention, long-established, to enhance narrative flow. [I have also occasionally used the terms he/she, his/hers, etc., as well.] No disrespect should be construed when only the male gender is utilized.

      Prologue

      The policy reform herein advocated has these traits:

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