No one change or combination of changes will immediately control health care costs, there are too many factors involved. The aging population, the ongoing development of new technology, new diseases, and the health status of the population all contribute toward costs. Health care costs will continue to go up no matter what we do; the challenge is to normalize the rate of increase to no more than general inflation.
However, there are a number of issues, which form the fundamental basis for the current level of health care spending and future escalation. Following are some of those items with suggested changes.
Ban all advertising for medical products, care or services
Watching television or listening to the radio you are barraged with advertisements for drugs, hospitals and various screening services. These do not add to the quality of care, but they sure do add to the quantity. I have even seen billboard advertising for physician services like “1-800-Hernia.” Slogans like “best care anywhere” and claims such as if you go to this facility, you will have a better outcome are not subjects for advertising.
Patients need an objective, statistically based source of information on hospitals, prescription drugs and yes, even doctors. Our objective should be to build those resources and stop revenue-generating advertising. If you think about it, why should a hospital have to advertising at all? If it provides high quality services, that information should be easily accessible. Why do physicians or others who invest in scanning equipment advertise other than to generate income? How do such services add to the quality or affordability equation? Some would argue that this is free enterprise and anyone should be able to advertise. Perhaps, but health care is not like selling any other service or commodity and should not be marketed as if it is.
Promote Wellness for Long Term Value
Promoting wellness is certainly a valuable goal. In the end, it may save money, in the short run it will not. To use wellness as a funding source for expanded health care in America is an illusion. Similarly, promoting
screenings and other preventive services may have long-term value, but will likely increase short term costs as more people seek such services, and if these services turn into money makers and are advertised as some are today they will substantially increase costs. This is especially true if services are covered without a deductible, co-pays or coinsurance. Spending money on health care is no different than spending money on other services, but logic is not part of health care costs. While we would not pay to have a preventative oil change included in automobile insurance, we seem to have no trouble with the idea that such personal responsibility should not apply to health care.
Improve Patient Education about Health Care and health Care Services
Patient expectations and perceptions about health care are generally unrealistic. For example, the doctor is always right and the insurance company wrong, the insurance company just denies claims to make money; a higher price means higher quality, more services mean better healthcare. Americans must be educated regarding the delivery, quality and expectations for their health care. If this is not accomplished, there will be ongoing conflict between patient expectations and the reality of what the system can and should deliver and of course, the related cost.
Eliminate negotiated fees and the concept of “participating” providers
Under the current system health insurance companies develop networks of participating physicians and negotiate a fee structure with each provider. An individual doctor may contract with several different insurers each with slightly different fees and claim procedures. The promise to the physician is to bring in patients or to keep existing ones who are covered by the given insurer or plan administrator.
This process not only adds administrative complexity but it also masks the cost of health care. There should be no “participating” physicians or other health care providers. All providers should be required to accept payment directly from a health plan and then bill the patient for the portion of the fee not covered by the plan. The patient will then see the true cost and will be more inclined to select providers that are more efficient. The health insurer or plan is free to set allowable fees thus retaining the flexibility to remain competitive. The patient then becomes the main driver for selecting an efficient provider. Physicians and others are relieved of an additional administrative burden and know that they too must compete at the patient and not insurance company level. Insurance companies are relieved of the cost of establishing and maintaining networks. The cost for services is equalized across all patients regardless of their insurance coverage. The burden for controlling costs moves directly to the health care providers.
Develop a centralized uniform claim processing and adjudication system
Any given physicians’ office deals with a number of different health plans each with different claim filing procedures, perhaps different forms, different electronic systems, different payment processes, etc. we should ask why? Why can’t we have a single clearinghouse for claim submission and routing to the individual health insurers? Is the process so complicated that insurance companies cannot agree on a single claim submission process? Back in the days of the Clinton health care reform initiative Bill Clinton held up a mock insurance card during a State of the Union Address, the idea was a single clearinghouse, much as we use in banking. That is certainly technically possible. The administrative savings for insurers and all health care providers would be significant. Any insurer that does not play by the new rules does not provide health insurance; there are too many companies anyway. This is separate from the idea of centralized patient records, which also would help.
While the cost of malpractice insurance is not a major driver of overall health care costs, it is a contributor especially in some specialties. The idea that a physician is sued to an unlimited extent is absurd; the idea that an attorney is paid based on the size of an award is equally absurd. There must be some meaningful reform in the adjudication and settlement of claims of malpractice. In addition, in the event of true malpractice there needs to be transparency for the public to learn and then make an assessment regarding the use of a provider with proven malpractice. In other words, in some cases the penalty should not be an insurance company payment, but specific action against the physician.
Move all health insurance oversight to the federal level under ERISA, including banning state level benefit mandates
One of the major contributing factors in the cost of health care is state mandated benefits. Estimates range as high as 25% of the cost of health insurance is due to these mandates. State legislators are easily influenced by special interest groups and have little or no stake in the cost generated by such mandates. The minimum design of all health insurance should be determined on a cost-benefit basis and on a uniform level across the country. Each employer or other entity providing health benefits would be free to add additional coverage.
Require all employers in the US to provide a minimum level of health benefits or contribute 105% the cost of coverage to an entity providing such coverage.
Many employers, especially small employers are opposed to this idea on the basis they cannot afford it. However, if all employers are required to participate no one company would be placed at a disadvantage. Further, without such a mandate what vehicle other than a government run program will be able to expand coverage? Employers should be free to aggregate their employees into larger groups managed jointly similarly to what happens in union multi-employer welfare trusts.
Define quality and make data available in a common database available to all Americans. Ban physician ownership of health care facilities
Revenue generating advertising is not the way to learn about new drugs, medical treatment and the like, nor is it a way to assess quality and alternative services. Every American should have access to independent evaluations of health care providers, facilities and treatments. In addition, evaluate treatment variations and outcomes that vary by geographic location and force best practices throughout the system without regard to financial incentives that may drive such practices in certain areas.
Along these lines, prohibit health care professional from investing directly or indirectly in any health care service or product. Some will say that singling physicians out for investment restrictions is wrong, but the reality is that the provider of health care services can drive the purchase of health care like no other product or service.
Bring back the (staff model) HMO
If you think about many of the things wrong with the deliver of health care (perverse incentives to provide care, lack of coordination of services, duplication of services, lack of peer interaction, etc.) they can be resolved in a well run staff model HMO. Provide the majority of care under one roof, provide centralized medical records, provide peer consultations among physicians employed by the same entity, compensate physicians on a salary basis not fee for service, enhance the ability to review and monitor the quality of care. Such a model allows a physician to focus on medicine rather than running a small business. America destroyed the HMO concept with bad publicity and a watering down of the pure model, patients wanted the ability to go to any doctor no matter that they had no way to evaluate who the right provider may be.
Done right, the staff model HMO as a viable option for all Americans will go a long way toward achieving affordable, efficient and quality care. One of the objectives of reform is to make health care “affordable.” In some context, that means limited or no deductibles or co-payments. Unless there is a managed environment, allowing the patient open access to coverage and services they perceive as free, leads to unnecessary costs and unnecessary care. The HMO can both provide the truly needed services and control the cost.
Permit the establishment of buying cooperatives within and across state lines for the express purpose of small employers aggregating their employees into larger groups.