The Neoavatara Health Care Plan

We as conservatives better get ready for the Obamacare onslaught, because here it comes.

Barack Obama has stated as one of his major goals as President to push through a national health care reform package, preferably by the end of the year.  Frankly, Mr. Obama understands that this is his moment of opportunity. It is unlikely he will ever have more political clout and capital than he has at this very moment.

And Republicans have been virtually silent.

There is a simple reason for that:  They have had no plan for health care (with the exception of Mitt Romney; but his plan in action has been less than stellar…).

This is a simple harsh truth.  For years, we have Republicans make policy initiatives on the edges of this debate.  That is no longer enough.  Health care, very quickly, will become one of largest financial crises this country has ever faced, if nothing is done about it.  And consrevatives better have a workable plan when the time comes.

There are several conservative plans out there, including Newt Gingrich’s plan and Sen. Tom Coburn’s alternative.  Both have intriguing ideas, and are also dead on arrival.

There are three broad health care proposals out there right now:

  • Create a plan that resembles Medicare, administered by the Health and Human Services department.
  • Adopt a Medicare-like plan, but pick an outside party to run it. That way government officials would not directly control the day-to-day operations.
  • Leave it up to individual states to set up a public insurance plan for their residents.

I personally don’t like any of those choices.  I think we need a system where the federal government gives people the money, primarily by tax credits, to purchase their own care.  I also believe that insurance should cross state lines.

But I till think conservatives must present a full, complete health care proposal, if for no other reason than to show a clear ideological comparison with the Obama Administration.  Obama wants a massively enlarged bureaucracy, for which we don’t have the money.  I think there is a better, most cost efficient, and more cost saving way.

I have had multiple blogs on this topic, including what is the problems in our health care system, as well as my page on larger goals and issues that must be addressed, that can be seen here.  But frankly, we must start with our basica tenets that must be achieved:

1.  Universal coverage – We must find a way to fund health care for all individuals.

2.  Universal applications of best practices – This is not to only to ensure high quality health care with uniform standards, but also to implement the most cost


3.  Improve health care IT, including better, more efficient methods of billing – This will reduce mistakes, reduce fraud, and in the long run hopefully reduce costs, though up front capital costs will be significant.

4.  Transparency - We must make costs and effective practices known and easily accessible to the public.

5.  Tort and Malpractice Reform – It is essential to remove defensive medicine as part of the culture.  Therefore, legal tort reform is essential, while still balancing the legal rights of patients.

In general, I think these are the most important factors is attempting to achieve a long term, successful national health care program, and I don’t think there is much disagreement on these.

I personally have several suggestions for a conservative health care plan that meets those goals:

1.  Provide a refundable tax credit to every American to buy health insurance.

Right now, the tax code favors those working for large corporations, because they get a tax deduction for providing health care to their employees.  But remember, less than a quarter of people work for large corporations, and most new jobs in this country are formed from small businesses.  There is no reason, none at all, that your employer should be responsible for your health care, other than that has been the way it has been done.  Labor unions started this in the 1940s, because there were restrictions to pay increases; that clearly does not apply to the present day.  All reasons for employer paid insurance are pretty dumb, and there is no reason to continue an obviously flawed system.

A $6000 tax credit for families (or $3000 for individuals) would likely make insurance affordable for most people.  I think most people would be better off receiving more income, and then using that money and their tax credit to purchase the health care that would best fit them and their families.  Sure, there should be guidelines of basic, acceptable level of coverage…but I feel the responsibility is better off  in the hands of individuals.

2.  Provide an answer to affordability.

This is the most important issue for those that lack insurance today.  How can they afford additional health care premiums, at a time that they are living check by check?

First, we must establish that if private insurers are going to dominate the market, they must include all patients, regardless of health history.  You cannot leave a huge segment out of the insurance pool, and still expect to cut costs overall.  Yes, this regulation will make health insurance more expensive for most people, but it is a necessity.  It is one of the sacrifices that needs to be made to have universal care.  Howeve,r I also think that people that smoke, do drugs, etc. should have to pay more for their sins…life is about choices.  Maybe forcing people to pay for their sins may get them to make lifestyle choices that will improve their health…who knows.  But we have to be careful here…it is a thin line between healthy choices, and government intrusion on personal choice.

Second, make it clear to private insurers that if they can’t provide affordable health care, the government will.  This is an ultimatutm, but also a frank reality.  Many Democrats are already preparing for a single payer national health care system.  Even a partial system with a large government controlled component would likely wipe out many private insurers.  A recent report by the Lewin Group, a numbers-crunching firm that serves government and private clients, found that a new government plan could radically alter that landscape.  If the public plan were open to all employers and individuals — and if it paid doctors and hospitals the same as Medicare — it would quickly grow to 131 million members, while enrollment in private insurance plans would plummet, the study found.  By paying Medicare rates the government plan would be able to set premiums well below what private plans charge. Employers and individuals would rush to sign up.  In all practical purposes it would set up a monopoly…one which the private market could not compete with.

Private insurers must control costs if they plan on surviving.  It is that simple.

3.  Provide Tort Reform

Even in this climate, doctors and insurers are more popular than lawyers.  The legal system has set up a culture where doctors waste money purely to cover their own malpractice liabilities.  It is costly to the nation.  The exact cost is difficult to calculate, but doctors understand that we don’t practice medicine the way other countries do precisely because of this ‘defensive’ mentality.

There must be a fair legal system that caps rewards, lowers malpractice premiums, while still giving patients recourse for mistakes.  The currents system is out of balance.

4. Expand Health Savings Accounts

This is an idea that Washington only got half right.  HSAs could potentially be the answer for those people in the middle of the economic spectrum that are struggling with health insurance.  Allow individauls, employers, and anyone else to donate to a HSA, with no limits.  They can help pay for their insurance premiums and any additional costs from that account.  Allow the account to accrue tax free.  This will allow individuals, instead of the government, to have the power to purchase their own health care, and make individual choices that best benefit them.

5. Improving Heath Care quality and transparency

I generally agree with President Obama’s push to modernize Health Care IT.  I don’t think it will provide the cost savings he is suggesting, but it is a good idea.

Implementing best practices will be more difficult, but possible.  I think we should replace the Centers for Medicare & Medicaid Services (CMS) with a board of doctors and scientists who will make decisions of what studies and practices are the most cost effeective and provide the best outcomes.  Today, CMS doesn’t really do that; they really look at what things cost today, and make judgements that way…that is a very poor way of handling health care.

If something falls outside of ‘best practices’, that doesn’t mean it is outlawed…just that it will not be covered by insurance.  I will give an example as a radiologist:  we get requests for MRIs of extremities because patients ‘bumped their arm’ or ‘fell off a bike’.  This is an absurd use of health care dollars, and there is no indication for that.  Doctors today do those test because they don’t want to fight with patients, and are afraid of lawsuits.  But implementing best practices gives doctors a clear guideline; if patients don’t want to follow it, that is fine; but it will cost them.

This is where the Health Savings Accounts come in to play.  If you prefer a different treatment, the insurer will fund the amount that they would have spent on their recommend treatment; you supplement that with HSA dollars to make the decision you want.  People will sometimes make decisions because of personal reasons, but it doesn’t mean the system should pay for them.  More often than not, patients will follow the best available advice, both because of the science and the cost.  That will cause market forces to make decisions that should, hopefully, reduce overall costs.

One last point on costs:  we should clearly print and publish what every medical procedure costs.  Patients should know exactly how much they are spending, and for what.  Transparency is essential in any free market system.

6. The Safety Net

Ultimately, the one real criticism liberals can have to a plan that allows for this much freedom is what to do with those people that fall through the cracks.  I have an answer.

First, if you don’t purchase your own insurance, your $6000 tax credit will still be used; it will be used to purchase a default health care plan.  The authors of the excellent book ‘Nudge’ give us a hint at the solution.  There should be a basic default, that the government puts you in even if you are too incompetent to choose your own plan.

The plan will be the most basic of plans, providing for preventative care and catastrophic care, and little else.  We must make people responsible for their own health care decisions, while still balancing the needs of the society as a whole.  Thus, these people that don’t make that choice will not receive a tax credit, and will in fact be paying more in taxes because they will not be able to deduct the amount from their income.  It is a penalty for being irresponsible.

Second, we need to make sure that all children are clearly covered under the plan.  This easily falls into my previous suggestion.

Third, I have a controversial suggestion:  those people who do not utilize preventative care, especially for their children, should be penalized.  I am not sure how to carry this out, I am still considering multiple suggestions.  But whether or not preventative care can provide cost savings is questionable; however, there is no debate that preventative care provides for healthier living and better quality of life.  I consider this one of the key benefits of health care reform.  However, our society has become so poor in following preventative care recommendations, I think that people, at least initially, must be forced into seeing their physicians on some regular basis.

So, what are the benefits of this kind of plan over Obamacare?

  • No new huge government bureaucracy.  There is no need when individuals, and not someone is Washington, is making the choices.  Additionally, less government oversight means less power for the government to dictate how you live your life.
  • More choice (and responsibility) for individuals, while at the same time providing a safety net.
  • Key on those best practices that provide the best medical outcomes for the best price.
  • The financial incentives to enter into a plan that focuses on preventative care over treatment of disease should in long run make us a healthier country.
  • Forcing patients to make decisions on their medical care hopefully will make them more knowledgeable about what they are spending on that care…and the hope is, those market forces which have NEVER been used in America properly can slowly drive down costs and misues of health care dollars.

I welcome any suggestions.  I believe this is a good starting point…one that can provide universal care, at a reasonable price, without creating a federal governmet behemouth that is sure to cost more and to fail in the primary goals I have stated, while at the same time maintaining individual freedoms.