In my prior piece, I explained that health insurance plans and government programs shield patients from the true cost of services provided, leading to expensive healthcare by creating artificial supply and demand curves. Individual patients and proper market dynamics will lower costs. The Affordable Care Act will not cure our healthcare woes because it does not include the accountability of individuals and providers.
If Romney wins the presidency in November, repealing PPACA is first on his to do list. But what will he replace it with? For real solutions to lower cost and raise access, we need to keep more dollars in the hands of individuals, not insurance companies. Health Savings Accounts should be used as tax incentives for individuals to save for their healthcare expenses. Allowing individuals to increase their personal healthcare savings and giving them the freedom to make their own healthcare choices will lower costs based on free market supply and demand. Price transparency for hospitals, physician services, and medications is also critical to allow this principle to function. Presently, any price shopping is being done on collective levels between hospitals and insurance companies. This doesn’t allow for nimble supply and demand to work, and it also promotes protectionist behavior.
I recommend increasing the creative marketing of services and creating realistic insurance pool products. Employers are at the mercy of the big insurance companies regarding what risk they can take and what insurance products they can offer. We need to lower the barriers to enter into the insurance business. I advocate the idea of local not for profit insurance cooperatives. Co-ops could allow the insurance purchasers to be the shareholders. Instead of profits going to passive investors, actual purchasers could be rewarded with an annual dividend or a lower next year premium. Another way to pay for common preventive services would be provider group memberships. These wouldn’t involve insurance, and healthcare providers would compete to get the business of the patient.
Current yearly contracts give insurance companies an incentive to deny claims. Network changes interrupt continuity of care, promoting excess doctor visits and testing. Longer term contracts would result in wellness promotion, lower claims, and reward discounts.
To fund capital-intensive insurance companies, investors could purchase health bonds which would provide a safe return on investment, instead of buying shares in for-profit insurance companies. Instead of mandated insurance, we could have voluntary bond investment! These could become a loaning source for new start up insurance companies, healthcare memberships, and other services.
I understand the need to assist the truly needy or people who are hurt in a terrible accident. For this, catastrophic subsidies can be created via tax incentives, special needs based insurance products, and funding from health care bonds. Low income persons must be allowed to engage in more affordable, catastrophic insurance plans, used in the case of an unforeseen accident. Car insurance doesn’t pay for oil changes, tune-ups, or car cleanings. Why should health insurance be any different? Most people don’t visit doctors regularly, and only wish to be covered in the case of a major medical calamity. If there were insurance options like this, people would be throwing less money into the coffers of big health insurance companies that love to deny claims. They would keep more money in their pocket and shop around for cheaper doctors. All of this leads to increased savings and a lower cost of care.
If some or all of these scenarios would replace PPACA, individuals (instead of insurance companies and the government) would be in charge of what services are demanded and what provider gets their business. This freedom will most assuredly result in more affordable and effective healthcare. America was founded on individual liberty, not government mandates.
Raymond Kordonowy MD ABIM ABCL
Internal Medicine of Southwest Florida