A Simple Solution – What We Should Do To Fix Health Care

In order to truly fix our health care problem, it’s important that we understand how we got into this mess in the first place.  On the premise that “those that don’t know history are doomed to repeat it”, in the previous article I tried to explain just that, going back nearly 70 years to give a brief history of our health care woes.

I noted that a viable alternative should drive down costs, improve overall efficiency and effectiveness, and stimulate healthier individuals. To do this we must first acknowledge the lunacy of our current insurance system and understand their appropriate role. We must also consider, whether or not the government option would truly cut costs. The idea is what I call “the Walmart effect.” Because places like Walmart (or Costco) are such large retail providers, they have the power to influence production costs. The threat of not being able to sell your product in the largest chain in the world will drive down any cost. Similar to Walmart, if the government is providing most of the health coverage, in theory, medical costs go down.

I don’t think that will work though. If you’re in the medical field and you’ve seen your wages sharply cut, and then to receive compensation you have to go through government- an entity with the (unconstitutional) power to simply print money, problems are gonna come in heaps. Quite obviously sensitivity to cost and cost-effectiveness will go down. To avoid having people “game” the system the government would have to bog the system down with regulations. We’ll have what amounts to “price-fixing”. We’ve tried that before, most notably under Richard Nixon; it didn’t work very well.

Instead, we could offer people a mandatory savings plan. This would be coupled with a targeted reduction in taxes, along with the elimination of competition killing regulations, to make up the difference on income. Health insurance would lose their stranglehold on the American economy because people would no longer have to buy from them. Instead, additional insurance could also be purchased through the private sector and insurance companies would become ACTUAL insurance – and not just bureaucrats. It might even be a fair idea to make private health insurance non-profits like in Australia, and legislate a few clear provisions so that neither patients nor private insurances are trying to exploit each other (just an idea).

Similar to social security, a percentage of income would automatically be deducted from paychecks and deposited to a health savings account. The account would be used for immediate family members as well. If you are in control of your money – costs will go down as a result of the increased competition among health care providers. Singapore has achieved the most inexpensive and among the most effective health care in the world by implementing a similar system. Here in America, because cosmetic surgery is usually paid for out-of-pocket, costs continue to fall.

By putting your health back in your hands there will be an incentive for individuals to live healthier lifestyles, and the market for “preventative healthcare” will grow, which will save even more money. Because we will have to make more informed decisions, there will be less need for frivolous pharmaceuticals. Saving a detailed description of the pharmaceutical industry for another day, we can safely say that “big pharma” will effectively be neutered and medications will be forced to meet your actual needs, rather than just perceived needs. Additionally, the percentage of savings needed to cover medical care would likely go down over time because the price of health care would go down substantially.

What about people whose income is too small for deductions from paychecks? Here, I think governmental grants to nonprofit hospitals will make a big difference. If a nonprofit can demonstrate their effectiveness, they could get bigger grants. In addition to making nonprofit hospitals more viable, we could also offer grant and subsidy programs to help cover individuals who need help with affordability, based on some relatively simple mathematics (so that folks aren’t afraid to make more money because they might lose their health subsidy).

The burden of “end-of-life” issues on overall costs, has been much talked about. To help cut costs in this area, we could allow for the health savings account to be passed on (with certain discretion) to immediate family members. If I’m a father and I know that whatever is left in my account could be passed on to my children or grandchildren, I’m certainly going to make careful plans to cover all end-of-life scenarios. Such preparedness would cut costs substantially.

Quite obviously this is a vague outline of an alternative universal health care system, only beginning to scratch the surface. I hope it provides the reader with enough to at least convey the fact that we can have a better system, that could minimize the harmful effects of too much government and free us from our present day mess.