The First Big Step: What Is Step Two?

Stanley Feld M.D.,FACP,MACE

The HCA/United pushback is the first big step. It represents an expression of how “Patient Power”. Patients should be madder than hell and not want to take it any more. I hope the boycott spreads to Florida and Las Vegas.

United Healthcare can not get any more money for premiums from employers. They are the people who buy the health insurance for their employees. In fact, employers want to decrease the insurance coverage they provide for employees. Present premiums are too high and severely impact corporate profits.

General Motors spends $1500 per car for healthcare benefits. General Motors says they can not afford the healthcare benefit of $1500 per car and be competitive. The General Motors’ example does not speak to the 46.7 million uninsured. Many of the uninsured are self employed patients can not qualify for insurance because they have a preexisting illness or are at risk for illness. The insurance companies will not sell them insurance. If you are in a group insurance plan the insurance companies by law must insure you. Additionally, the self employed can only buy insurance with after tax dollars. The price of insurance is also very high for small businesses. The owners do not have the negotiating power of the large corporations. These two groups have no choice but to drop the insurance benefit. Hence the people working in these companies are uninsured.

If United pays HCA more money, United will be forced to reduce the salary and stock options given to the executives of United Healthcare. United Healthcare paid its CEO 1.8 billion dollars in stock options over the last 8 years. I have no idea how the other United Healthcare executives are compensated. I am sure their compensation is not shabby because United Healthcare profits are large.
The next step in the exercise of “Patient Power” is patients must take control of their access to care. Patients must be responsible for the payment of that care with funds allocated to them in a trust. United Healthcare should not determine regulate the patients care. Patients’ freedom of choice and self responsibility is the key to Repairing the Healthcare System. Patients will then become informed consumers of healthcare. There are preconditions. Prices must be transparent so the consumer knows what they are buying. This should be government’s role. The insurance industry should negotiate the price with the physicians and the hospitals and become the surrogate broker for the payment of money belonging to the consumer. Consumers’ who overspend will not be spending the insurance premium dollar. They will lose there medical savings trust money. Patients who have an expensive illness, like diabetes, can be rewarded for spending money to care for themselves to prevent complications of disease. Medicare care becomes the patients responsible to purchase. The insurance company can be the administrator and adjudicator of payment.

Remember, Medicare director Mark McClellan M.D. said that 90% of the healthcare dollar is spent on the complications of disease. If we reduce the complications of disease we will save 45% of the current expenditure excluding the elimination of waste.

Consumer overspending was best described by Victor Fuchs an economist from Stanford. I suspect unknown to him, he had made the case for meaningful Consumer Driven Health Care. The Health Saving Account system congress has approved is my opinion is impotent. The trust account of $1,000 per year is too low to motivate the consumer to become a wise shopper. The original Medical Savings Trust Account of $6,000 started to represent motivation. There are interesting political reasons for the compromise. I will discuss those reasons shortly. The HSA represents the same false hope HMO’s and managed care represented. Dr. Fuchs calls it “The Restaurant Check Problem.”

“You go out to a restaurant with a bunch of friends and you sort of understand that you will split the check,” he said. “The waiter comes along and says, ‘the lobster looks very good, and how about a soufflé for dessert?’ The restaurant check balloons, but you are not so careful because you figure everyone is splitting it. “That’s the way medical care gets paid for,” he said. Dr. Fuchs added, “We want to spend our money on the things that will bring the most value for the dollar. When we are spending collective money as we are in health care, then it becomes much more difficult.”

We want the Diabetic to spend money for medical care in order to prevent complications. Prevention of complications will keep him out of the hospital. The consumer driven healthcare plan can be set up to give his trust fund a credit. This would serve as motivation for him to take care of himself. This reward is much cheaper than paying for a hospitalization.

The significant of the HCA/United Denver episode is that patients start realizing that they can impact the healthcare environment. After all without patients there is no need for a hospital. If an insurance product is overloaded with salaries, waste and overhead patients will not buy the product. The insurance product will have to become more cost efficient.

We, the patients and future patients have it in our power to change all of this. Some very clever entrepreneur will develop an insurance product that everyone wants. State governments have the power to encourage development of this product.

The examples in industry in America are numerous. Sam Walton revolutionized retailing in America with Wal-Mart and Sam’s. Michael Dell almost brought IBM to its knees and revolutionized the distribution of information technology.

It is going to happen in the Healthcare System. My goal is to describe the necessary components of the product that does not offer another disappointing false hope. I hope to show the way to develop the insurance product that can turn the insurance industry on its ear. There is no reason we can not provide excellent affordable insurance coverage to all including corporate employed, small business employed, self employed, unemployed, and Medicare covered families, with all the stakeholders making a reasonable profit.