Jeff Bezos, Warren Buffett and Jamie Diamond should try this disruptive approach in their venture into healthcare reform.
All the other approaches that have been tried have not worked or have become unsustainable. Most of the approaches have been unfair to consumers and the majority of taxpaying Americans.
The only way to empower all the consumers in a healthcare system is to encourage them to become responsible for their health and healthcare dollars.
I believe it can only be accomplished by providing easily understandable financial incentives for consumers to save money for themselves.
Providing financial incentives to consumers to save money for themselves can be disruptive to the present models used to pay for medical services just as Amazon has been disruptive to retail sales.
The delivery of medical and surgical care has advanced tremendously in the last sixty years.
At the same time medical care has become unaffordable and the cost of healthcare has become unsustainable.
The incidence of obesity has risen every year. Over fifty percent of Americans are obese.
Obesity begets many chronic diseases and subsequently the complications of these diseases.
Physicians can treat these complications fairly well. However the treatment of chronic disease complications are costly.
How do you decrease the incidence of obesity in America?
Physicians must attack the core causes of obesity.
Among those causes are excess food intake, lack of daily exercise, mental depression, cultural milieu and/or a combination of all of the above.
The cure of obesity depends on the ability to eliminate these core drivers. Financial incentives can get patients involved in eliminating the core drivers of obesity.
The responsibility for obese patients’ healthcare depends on patients’ lifestyle, popular cultural milieu, and patient education.
In America, it is almost impossible to buy a meal in any level restaurant without excess calories.
How do you get people to be responsible for their health and healthcare dollars?
The one key element ignored by policy makers to decrease obesity is to give obese consumers of healthcare financial incentives to concentrate on trying to lose weight.
“Obamacare went in the wrong direction. It limits personal liability for their obesity. It does not promote personal responsibility
The only incentive Obamacare provided was the incentive to overuse the healthcare system.
This was especially true for patients on Medicaid. They had zero premiums and deductibles. The only deterrent to accessing medical care was physician availability.
Physicians refused to participate in Medicaid because of low professional reimbursement. Low reimbursement by the government was necessary because of the decreases in funding and participant overuse of the system.
Obamacare planned to cure the shortage of “medical providers” by increasing the number of “valid medical providers” who could bill on their own, such as nurse practitioners and certified physician assistants.
However, the defect there is that patients were not under the supervision of physicians engaged in their care. It ignores the patient physician relationship that is so important to effective medical care.
If Jeff Bezo, Warren Buffet and Jamie Diamond (BBD group) are serious about Repairing the Healthcare System for their employees as a nonprofit organization, they should consider my Ideal Medical Savings Account.
The Ideal Medical Savings Accounts (MSA) are tax-sheltered accounts used to pay for non-catastrophic medical expenses. These non catastrophic medical expenses account for the bulk of the cost of medical care.
Money left from the Medical Savings Account at the end of the year is put into a consumer’s retirement account.
The MSA provides the financial incentive to not overuse the healthcare system.
Warren Buffet understands the money making potential of re-insurance. He is heavily invested in re-insurance companies.
If one of the BBD Groups employee’s gets sick and spends of all of his MSA money, reinsurance provides first dollar coverage for the illness.
The BBD Group could teach employees how to shop for price and value. Insurance companies are supposed to shop for value. However the shopping is never to the patient’s advantage. It is to the advantage of the insurance company.
“ Critics always claim this is unrealistic:
- The claim is that patients are not smart enough to shop for price and value. 2. Are you supposed to shop around from the back of the ambulance?
The critics’ use the ambulance argument to eliminate the possibility of consumers using their own judgment to make price decisions.
Patients are smart enough to figure out which hospital they want to go to before they get into the ambulance.
Emergency care represents only 6% of health care expenditures.
“But emergency care represents only 6% of health expenditures.”
“For privately insured adults under 65, almost 60% of spending is on elective outpatient care. “
The critics argument is that consumers do not know how to shop prices. Consumers are smarter than the critics think. It would be easy to teach consumers to shop prices.”
“My Ideal Medical Saving Account provides that financial incentive to not overuse the healthcare system. All the articles about my ideal medical saving accounts are attached to this link.
“ Likewise, nearly 60% of Medicaid money goes to outpatient care.”
Medicaid patients also overuse the healthcare system.
Most Medicaid patients can understand the MSA’s financial incentive.
“ For the top 1% of spenders—a group responsible for more than a quarter of all health expenditures—a full 45% is outpatient.”
These patients can be identified as outliers and educational vehicles can be created to decrease this overuse of the system. It would save the re-insurance company a great deal of money.
In my opinion Medical Savings Account are better than Health Savings Accounts. Medical Savings Accounts take the money out of the healthcare insurance company’s hands and deliver it to consumers retirement accounts.
Both HSA’s and MSAs have the unique advantage of providing the financial incentive to for consumers to save money for themselves.
When people have savings to protect in HSAs, the cost of care drops without harmful effects on health.
The financial incentives decrease the overuse of the healthcare system.
“ According to a 2012 study in Health Affairs if even half of Americans with employer-sponsored insurance enrolled in this kind of coverage, U.S. health expenditures would fall by an estimated $57 billion a year.”
My ideal Medical Savings Accounts provide an even a greater financial incentive and should decrease costs even further.
“ MSAs should be available to all Americans, including seniors on Medicare. Given that seniors use the most health care, motivating them to seek value is crucial to driving prices lower.”
MSAs should also apply to Medicaid recipients. The details for Medicaid recipients can be found in my article “My Ideal Medical Savings Accounts Is Democratic. “
The maximum contribution to MSAs should be raised to $6000 or $7000 dollars. If a consumer gets sick and experiences a cost of more that $6000 he should receive 100% (first dollar) coverage through the BBD group’s provided reinsurance policy. A reinsurance policy would cost the BBD Group less than $6000 a year.
The total insurance package to BBG Group employees should cost the BBD Group $12,000 rather than the present cost of $18,000.
BBD is a self insured association. The association has elimated the multiple middlemen in the present healthcare system.
When a person with an MSA dies, the funds should be allowed to roll over tax-free to surviving family members.
This financial incentive should be included in My Ideal Medical Savings Account.
“The information that patients require to assess value must be made more transparent.
2014 study on magnetic resonance imaging showed that price-transparency programs reduced costs by 18.7%.”
A consumer driven system would force providers to compete for patients. Information on price could easily be provided to consumers by the government and the healthcare insurance industry.
At present healthcare prices are not transparent. Consumers are not motivated to shop prices. The BBD Groups leverage with its employees would force transparency.
“The most compelling motivation for doctors and hospitals to post rates would be knowing that they are competing for price-conscious patients empowered with control of their own money.”
In this age of technology and rapid communication telemedicine should be promoted and paid for. One way to do it is to permit physicians to practice telemedicine across state lines. It would supply instant access to expertize at an affordable cost.
Everything possible should be done to encourage consumer responsibility and provider competition.
The present tax code does the opposite. Consumers in-group plans provided by large and small corporations receive their healthcare insurance from the corporation with tax-free dollars.
The larger the corporation the more leverage the corporation has for negotiating the premiums with the healthcare insurance companies.
The BBD Groups volume of consumers would have tremendous leverage with providers.
The younger and healthier the corporate employees are the lower the premiums.
The formation of associations with large memberships of all ages would lower the cost of healthcare. Large associations would have great leverage in negotiating price with providers. They would also spread the risk.
Self- insured associations such as the BBD Group would also spread the risk and lower the cost.
Tax deductibility must be given to these “individual” insurance policy holders and association policy holders so they are, in reality, paying for healthcare insurance with pre-tax dollars the same as the corporate group plan policy holders.
These simple changes in the law would result in an affordable healthcare system that was market driven by consumers. The changes would force providers and the healthcare insurance industry to become competitive.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
All Rights Reserved © 2006 – 2018 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE
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