Reforming Health Care

In honor of the government taking one more step towards socialism (passing the health care bill), I want to write some of my thoughts about health care reform.

First off, I absolutely recognize the necessity of health care reform. In other words, the system as it is currently set up is NOT working very well. One problem with trying to reform the system is that the health care system includes so many pieces. It’s almost impossible to untangle one part of the problem without impacting (possibly in a very negative way) other parts. But untangling the entire thing at once is not practical. So, how do you reform it in a way that improves it, moves it in a direction that I believe it should go (and clearly, there is no concensus on which way that should be), and doesn’t break other parts in catastrophic ways.

As with every other political decision, my primary goals are to preserve individual rights, and to provide an environment where that are able to pursue the things they want (which would obviously include health care), but beyond that, governmental intervention should be minimized.

In reforming health care, there are many different aspects involved in the problem that I would like to see reformed including:

  • the Americal Medial Association
  • malpractice insurance
  • cost of medical school
  • lobbyists and special interest groups
  • health insurance
  • government health care programs (medicare, medicaid)
  • health care taxes
  • medical research
  • drug companies and prescriptions

and probably a number of others. I’ll begin by saying that I have only a cursory knowledge of how things are right now. I have never worked in any aspect of health care, and as such, I don’t really know how things work. But I feel that I have a decent understanding of some basic principles that should be used to create the “ideal” health care system.

So, let’s talk about some of the above factors. I will list a few reforms I’d like to see done. They don’t tend to be sweeping ‘fix everything at once’ reforms, but they tend to be reforms that I think could be reasonable to isolate and do without totally disrupting things.

Once these reforms had been in place for 2-4 years, then a second set of reforms could be started.

American Medical Association

It is my understanding that the AMA is involved in almost every aspect of health care, and I believe that that gives them too much “monopolistic” powers in that field.

In the same way that single companies are monitored very closely when they control a monopoly on some comodity, the AMA needs to be examined closely. If they have been involved in any type of price fixing (and I believe that they have been), then they need to be broken up, the same way the oil companies and phone companies were.

The health care industry is so large, and occupies such a vital role in the lives of every individual that it is critical to avoid monopolistic behavior. Just as the oil companies could use the power of the monopoly to cripple the transportation infrastructure of the country, a monopoly based health care system could do the same with an even more critical system.

The medical field desparately needs many of the functions that the AMA provide (at least in theory), but in order to avoid monopolistic powers, most of those functions should belong to separate agencies.

The first agency that I would look at is a certification agency. There absolutely needs to be an organization that can certify people working in health care. Every single doctor and nurse, every single hospital, clinic, and pharmacy need to be certified to make sure that everyone working there is properly trained, and is using proper medical procedures.

So the first reform that I would like to see happen is to separate this function from the rest of the AMA and form a separate agence to handle certification. The certification agency must have absolutely no role in determining WHO can work in a medical field (other than denying them certification), how much they charge for their service, or their ability to accept payment from a government agency, an insurance company, or any other entity. The certification would describe what types of medical procedures each person and provider were qualified to perform. Every health provider would pay a fee to the organization in order to get certified, and would be periodically reviewed in order to maintain the certification.

I would actually like to see competing certifying organizations, so that if one organization refused to give some a certification, an avenue would be open to approach a different certifying agency, but that could be a second step.

I would also examine the AMA carefully, and if it has been involved in price fixing, I would immediately treat the AMA as a monopoly and break it up further into other agencies in order to limit it’s ability to engage in those practices.

Cost of medical school

I did a small amount of research and found that the average doctor leaves medical school with 200K to 400K in loans. This of course means that a doctor MUST receive a very good salary in order to pay for those loans. I also learned that there is a good deal of justification for the cost of that education.

Medical professors are real doctors, and must be paid comparable amounts to other doctors in order to get good, well-qualified teachers. In addition, the medical equipment required to teach the students tends to be extremely expensive, and needs to be kept up-to-date, which means more frequent replacement than the equipment in other programs.

So, although I’m sure that there are ways to reduce the cost of a medical education, I don’t think you can reasonably expect to cut it in half. Perhaps a quarter is possible… but even that would mean that the cost of medical school would still be huge.

Of course, one possible way to reduce the cost of medical school would be for the government to subsidize it. I absolutely do not subscribe to this point of view. If it’s subsidized, it means that taxes have to be raised to pay for it, but in a “hidden” way. If I want to go to a doctor, obviously, I will need to pay for his education and skill. I’d much prefer that that be in the form of a medical bill as opposed to a tax increase.

So, initially, I wouldn’t propose any reforms here.

Lobbyists and special interest groups

I’m a huge fan of reducing the influence of lobbyists. However, I don’t think I’d deal with that problem as part of health care reform. I’d prefer to deal with the problem more generally, so I’ll save that topic for some other day.

Health insurance

Many of the reforms in the current health care bill come in the form of health insurance reforms, but I defintely do not agree with all of them.

There are a few reforms that I would like to see with respect to health insurance.

First, insurance needs to be treated as a contract which can only be terminated by the insured person. The contract says that a person will pay X dollars a month and in return, the insurer will pay some portion Y of any medical bills that person accrues. Once that contract is in place, that contract should only be ended by the insured person. Either the insured person stops paying for the policy (which terminates the contract) or they choose to switch to a different policy. An insurance agency should NOT be able to terminate the contract. They should not be able to modify the terms of the contract (with respect to the portion of the medical bills that they cover). And they should only be able to increase the cost of the policy in some way related to the cost of medical care (i.e. if the cost of medical care increases 5%, they should be able to raise the cost of the policy by 5%, but not some arbitrary amount).

A second reform is that insurance should be treated as a vital service available to all, and at the same cost. What I mean by that is that the same policy to two different individuals who fall into the same category (with respect to some actuarial set of tables). The insurance company comes up with a set of tables which define how much the medical care will cost for a person based on some number of risk factors (do they smoke, are they overweight, etc.). If two people fall into the same category, the policy for both must cost EXACTLY the same. It doesn’t matter if one is unemployed and one works for a huge mega-cooporation. Also, the policy cannot be denied to either. By treating health insurance as a vital service, you put it in the same category as other emergency services. A fire department cannot refuse to respond to a call based on where the fire occurs. A 911 operator cannot ignore calls made from locations in a poorer section of town. Health insurance must be equally available.

Another reform that is related to the second is that the actuarial tables used by an agency must be available so that they can be monitored for fairness, and so that people can make sure that the rate they are paying is equivalent to someone else in the same actuarial state and with the same policy. Also, changes to the actuarial tables would need to pass some sort of review in order to be accepted.

There are some reforms that I’m NOT in favor of. First, I’m not in favor of price controls on insurance rates. Price control can be handled by competition.

I’m not in favor of requiring people to have insurance. I don’t feel that it is the government’s role to protect people from themselves. If they choose to forego insurance, that is their choice (though I’m willing to consider a requirement to have insurance policies for their children).

I’m also not in favor of forcing insurance agencies to ignore pre-existing condtions. A pre-existing condition would be used to determine where a person fell in the actuarial table, and that’s reasonable. The only way to make ignoring pre-existing conditions work would be to force people to have insurance (otherwise, you’d only get insurance when you got sick), and I reject that solution.

So, I would start with the three reforms I listed above.

Health care taxes

I would like to see health care tax free. By that, I mean both preventative health care and treatments for medical conditions, but I do NOT mean purely cosmetic things such as most plastic surgeries, or treatment for conditions that have no impact on a person’s health.

Under the current tax system (which I think needs to be completely replaced), medical care should be 100% tax deductible.

I would probably hold off on this reform however. Each of the other reforms will cost money to implement, and I think that the taxes on health care services would be a reasonable source of funds to cover those reforms.

Medical research

One of the reforms that I am most in favor of comes from medical research condcuted by drug companies and other medical research institutes.

There have been a number of high-profile court cases where drug companies were sued for selling drugs with known problems.

Given that, how can a person be reasonably sure that the drugs or procedures being provided are safe?

I would like to see all medical research data be public as a condition for the drug or procedure being approved by the FDA. In other words, the raw data from all tests done on a drug need to be available in a public place where they can be reviewed by other agencies before the drug can be sold as anything other than an experimental drug.

This solves a couple of problems. The data can be reviewed by others and any questions can be responded to by the drug company (perhaps in the form of additional tests), or by indicating that there are conditions for which the drug has not been tested and it should not be used in those situations. This simultaneously protects the company from lawsuits, and allows potential buyers to make more informed decisions, both of which are good things.

Anyway, that’s enough for now.