Stanley Feld M.D.,FACP,MACE
The solutions I have proposed are all directed to a patient centered, patient driven, and patient advantaged system. I will review the proposed solutions in the next two blogs.
• Price transparency is an essential beginning. No only must the retail price be published but all of the discounted prices must be transparent as well. Somehow, the government has to enact legislation so that the providers and the insurance companies post their range of prices. The government has to empower the patient with negotiating power to get the best price. There are many different prices paid for a service depending on the negotiating power of the purchaser. The net effect of this total price transparency will be lower the prices and decrease cost of health insurance. The consumer must demand real price transparency. Aetna’s declaration of price transparency last year was a rouse. The hospital associations of Wisconsin and now Texas have developed web sites to provide hospital retail prices. We have little idea how much the government or insurance companies pay for these services. I assure you the discount is very deep and the hospitals are satisfied with the payments. The automobile industry has figured out how to deal with total price transparency and the internet publication of the MSRP, the invoice prices and the average prices paid for an individual automobile. We should demand that the healthcare system does the same. The system should be set up where the patient can negotiate price pre or post treatment. Sometimes the patients need a care emergently and are not in a position to negotiate in an emergency room.
• Elimination of a two tier payment system with hospital clinics receiving more money for procedures than outpatient physician clinics for the same procedures. Eliminate the restricting of payment to the physicians’ office clinics as long as there is proof of equal quality and qualifications to do the procedures in the physicians’ office. This can serve to increase price competition for services. Price competition is a vital element on the repair of the healthcare system.
•Expand consumer driven healthcare using the ideal Medical Savings Accounts and not the present Health Savings Accounts. I have made clear the difference between the two. The ideal Medical Savings Account would be to the patients’ advantage and not the insurance industries advantage. The ideal MSA would serve to motivate the patient to shop price and quality because they are spending their own money. It would also encourage adherence to treatment for the same reason.
• Create a level tax exempt playing field for the self employed and uninsured
so they can buy insurance with pretax dollars. Provide those who qualify for subsidy with a subsidy to pay for their Medical Saving Account. If they use the healthcare system appropriately or they do not have to use the system they should be rewarded with a lifetime tax exempt saving account. Incentives on all levels drive our system of free enterprise.
• Administrative waste in hospitals should be penalized and not rewarded. The system of payment presently is very opaque. For example payment for some chemotherapy is 10 time the cost of the drug. Yet the oncologist is not permitted to administer the drug in his office for one and one half times the cost. It is estimated that $150 billion dollar are wasted on administrative costs in the hospital and in the insurance industry. These costs add not value to the treatment of patients. The administrative waste is absorbed by increased executive salaries and increasing construction of enlarging hospital facilities. The brick and motor expansion of hospitals should be over since much can be done on an outpatient basis.
These are some of the solutions necessary to repair the healthcare system. The solutions have to be instituted as a total plan and not introduced piecemeal. Each of the pieces of the solution is dependent on each other in order to have a positive effect on repairing the healthcare system. Next time I will review the other elements of a plan I have proposed that will solve the dilemma expressed by the questions that need to be addressed to Repair the Healthcare System.