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HPUSA Quarterly Fifth Tuesday E-Letter, April 2003
HealthPlanUSA Quarterly Newsletter for April 2003
Once every quarter, we step back and reflect on where we’ve been and just what is the ideal HealthPlan for the USA or any country that desires to privatize. This is the one year anniversary of the quarterly HealthPlanUSA. It networks on the fifth Tuesday of each quarter. Today we introduce more details of the ideal HealthPlan for the United States and the world. The subject is huge. You may want to copy this into your template file and save it to your HealthPlanUSA file for later study. If this has been forwarded to you or you have not been on our email list and would like to continue to receive these quarterly messages exploring the ideal universal HealthPlan for the USA, please send an email to Info@HealthPlanUSA.net.
In This Issue
1. California Journal Prescriptions for Health Care and How to Afford the High Cost
2. What Do You Mean Federal Funds Are Taxpayer Derived?
3. Why All Centrally Planned or Single-payer Programs Have and Are All Doomed to Fail
4. The HealthCare Dilemma
5. Lessons from Car and House Insurance with the Same Deficiencies As Health Insurance
6. Earthquake and Flood Insurance Are Market Based
7. The Real Prescription for HealthPlanUSA
8. Current Attempts At a Market Environment
9. The Free Market Challenge
10. Our Next Quarterly Issue
The California Legislature
This past week, one of our loyal MedicalTuesday members came by my office to share the recent issue of the California Journal that has two lead articles on health care. The first was titled, “Prescriptions for health care.” A freelance writer from the San Francisco Bay Area opens with the statement, “There is a broad consensus that California’s health crisis is so severe that major change is needed. The question is what to do.” He discusses the five bills at play in the state legislature that offer a range of ideas. His message is in white on a red background to reflect San Francisco General Hospital’s “condition red” which represents the number of patients on gurneys in the hallways waiting for beds. But he seems to forget that this is a government hospital with the perennial budget crises, constraints, and desperation that occur when medicine is a government function. Not too different from a government hospital in any single-payer country where health care is a government-operated industry. In many of these countries, the government is trying to privatize health care. Why are we going in reverse?
The first proposal would replace the existing private insurance system with a single-state agency that “guarantees” universal health care for all Californians. The increase in taxes on workers (2-3%), on payroll (5-6%), and on still unspecified items that may include unearned income, add up to more than the current income tax. (Actually one of the proposals to bail California out of its $30 billion of excessive spending already includes a state income tax increase to 10 or 11 percent, without covering health care.) The senator proposing this must be too young to have experienced the 1966 introduction of Medicare that made similar promises. However, actual costs exceeded the estimates by 639 percent according to Richard Epstein of Chicago University, and have been unable to deliver promised benefits to a much smaller segment of our society, namely seniors comprising less than 20 percent. When Medicare came, my father, along with most people I knew, maintained their Blue Cross/Blue Shield (BC/BS) plan for several years. They eventually dropped these private plans, but it was before Medicare restrictions set in and benefits deteriorated to less than that of these private plans. But by then, the private health care infrastructure had essentially been destroyed. Seniors became hostages to the public system. The proposed destruction of the private health care insurance industry is a strategic way to hold all of society hostage, in a similar way seniors have been.
The second plan, proposed by labor and organized medicine (Are they really in the same bed? I hope they’re not being intimate.), would mandate that employers (except small businesses) cover all workers and dependents. Earlier this month, MedicalTuesday quoted the Blue Cross/Blue Shield estimate of eight million workers, primarily from small businesses, who are not covered . Therefore, this bill would not cover any more workers than are already covered. However, it would destroy the worker’s independence to make health decisions and instead make them beholden to the state. This is what the father of government social insurance, German Chancellor Otto von Bismarck, did by using state pensions to buy support for his regime. According to Brink Lindsey writing in the journal Reason, the appeal of social insurance for Bismarck was that it bred dependence on, and consequently allegiance to, the state. Social insurance, whether Social Security, Medicare, or single-payer medicine, was thus born of a contemptuous disregard for liberal principles. Are Americans or even Californians really going to give up their freedom and be enslaved to a state bureaucracy?
The third proposal would mandate that employers offer health insurance and workers, who can afford it, buy health insurance. But everybody is poor in their own eyes, just on a different level. In the above cited article by BC/BS, it was noted that many of the uninsured have yearly incomes above $75,000. Couldn’t these uninsured buy insurance or did they make a rational decision that they had other priorities? The BC/BS article did not include these in the so-called “Health Care Crises.” What is the basis for these proposals that require mandates by politicians who seek power—the very opposite of free choice or freedom?
The fourth proposal is similar to the second but includes the “benefit” of covering the workers in small businesses. It proposes a time table to phase in the benefits, but fails to include the costs and the means by which the state can raise funds to cover these costs. We should expect a certain amount of maturity from our legislators and require that proposals be based on logic and reality thinking.
The fifth proposal was from a senator still mulling over his plan. We must assume he just didn’t want to be left out of the power play he felt was gaining momentum.
The arguments come in many different languages: “There is a “broad consensus that California’s health crisis is so severe that major change is needed,” or “Health care experts say,” or (admitted bias) “I love the fact that the conversation has shifted from whether we should have universal coverage to how we should provide it,” or (straddling the fence) “...while reformers hold a multiplicity of views on how best to fix California’s health care system, there is little argument over the fact that the system needs fixing.” These phrases, designed to intimidate in order to deter opposition, obviously have an ulterior motive. None of the plans are designed to help individual health care needs. They offer no solutions or only unsuccessful solutions that have been tried elsewhere, in this country and in many others. They all reflect little comprehension of the realities of medical practice. Therefore, we must be bold enough to realize that they are designed for the political health of the individuals proposing them, not for the medical health of Californians.
The second article, “The high cost of health,” is written by Julie Sevrens Lyons, a staff writer for the San Jose Mercury News. The author quotes Dario Frommer who sees California’s health care system as a George Clooney movie—the one involving a sinking ship with no survivors. Lyons feels we can’t discount Frommer’s opinions since he is chairman of the Legislature’s Assembly Health Committee. She provides no information concerning Frommer’s appointment—whether it was based on credentials in the health care field or the result of the political spoils process. Notwithstanding any basis in either health care or medical knowledge, she feels he is not looking into a crystal ball but is actually observing the system take on water. She describes new treatments, remedies and technologies that allow us to live longer and healthier lives, but points out that we haven’t learned how to pay for them. Frommer says it’s grim out there. He believes the system may crash. Lyons feels the same sentiment is echoed from the state capitol. Gary Glaxton of Kaiser Family Foundation says, “There aren’t good ideas out there and there isn’t a commitment to find them.” Lyons continues for another 20 paragraphs of doom and gloom. However, she fails to point out what readers of this column already know—that the doom and gloom of every socialized health care system in the world is far worse. In some cases it’s the only care that a nation has received for fifty or more years and no one can even comprehend having personalized health care or not being on a waiting list. We have cited comparisons by John Goodman, PhD, between UK’s National Health Service (NHS) and Kaiser. His data reveals that the NHS costs more and still has far more restrictions to medical care, pharmacy benefits and surgery than the Kaiser HMO.
These articles that quote politicians don’t get to the basic problems. Should any politician succeed in getting their plan approved, it will have a devastating effect on the cost of health care. Even the well informed have difficulties understanding medical practice. Richard A Epstein, a distinguished professor of law at Chicago University and who comes from a medical family, wrote an outstanding book, MORTAL PERIL - Our Inalienable Right to Health Care? My review can be found at http://www.healthcarecom.net/bkrev_MortalPeril.htm. In this volume, Epstein provides the political and economic analysis which suggests that providing unregulated health care will, in the long run, guarantee greater access to quality medical care for more people than any regulated or single-payer health care system. But he tosses one crumb to the Health Maintenance Organizations (HMO) that were being criticized for short appointments when he says that ten minutes should be enough time to check a sore throat and a pair of ears. But those organs are attached to a face and body that cannot be isolated so easily and may also need medical attention . If we allow non physicians to determine the nature of the physician-patient relationship, we will end up as many of my colleagues in UK, EU, Korea, Japan and elsewhere have told me—only five or ten minutes to check out a failing heart, a failing kidney, or other life-threatening illnesses. They are making life and death decisions while scarcely “laying on the hands.”
Thus, the crises throughout the world is even greater than the doom and gloom underscored by the authors in the California Journal. MedicalTuesday gives examples of excess costs and over utilization unrelated to improving health care that politicians never see. It is interesting to see patients who have been told that unless they receive a heart or kidney transplant, they will be dead in six months. Because there are not enough organs available, they continue to return for follow up year after year, very thankful that none are available or affordable. The purveyors of doom and gloom seem to have more interest in personal ambition than in improving health care.
Do Federal Funds Really Come from Taxpayer’s
Over the past year, we have been discussing a number of issues that will make HealthPlanUSA the workable, cost effective plan for the USA. There is a group in California that wishes to endorse Scandinavian socialism, a move in the opposite direction. A columnist in yesterday’s Sacramento Bee states that the resultant cost for this endorsement will be an increase in the state budget from $75 Billion (which is $30 billion in the hole) to $750 billion. When politicians promise that everything is free and will be paid with federal or state funds, people are relatively naive by thinking it’s “someone else’s money.” It’s hard to conceive that Californians will really be willing to give over one-half of their income for politicians to play with in order to pay for health care and other “benefits” that they think people need. Another MedicalTuesday reader reminds us of a study that revealed only 42 percent of Americans know that Federal Funds come from their tax dollars. About half had some vague notion of where the federal government gets their money and 10 percent had no idea all. When the majority of American citizens do not realize that these are tax dollars that must first be taken away from them, the answer to the health care dilemma requires an inordinate amount of economic education—that which our socialized education system does not see as a priority, or at least not in their interest to provide.
All Central or National Health Plans Have and Will
Continue to Fail
During these past six months, we have discussed problems in a number of Global National Health Plans. Although primarily from the English-speaking world, the problems with other countries are very similar. Human greed will always exceed human need and create excesses, like “spending other people’s money,” which every national or single-payer plan does. But it is not the usual 5 percent or 10 percent variations that the social planners predict. We have given numerous examples that it is more in the range of 100 percent to 10,000 percent excesses that are difficult to control. All countries are in various stages of privatization to salvage the socialized government-controlled plans with a pseudo-market place endeavor which is predicted to fail. Our efforts are to preclude the need for the United States to someday return to the present system after the infrastructure has been destroyed.
Examples of Insurance That Work and Don’t Work
So what does an ideal health plan look like? Let’s look at the insurance field to chart our course and plan of action. Car insurance, home insurance, liability insurance and legal insurance benefits are not in a market environment. Earthquake and flood insurance are.
Do Uninsured Motorists Exceed Uninsured Humans?
Car insurance has not solved the benefit issue. After the $500 or so deductible, the entire cost is covered to make the car perfect without any detectible abnormality. At the UC Davis Mondavi Center grand opening last year, there was a post next to my parking stall that could not be seen from the drivers seat. This round, 5-inch impression in the right, front fender cost me $500 and my insurance company $1650. I felt some of the work was not required and it would still have looked like new, but both the USAA insurance adjuster and the Buick body shop said it had to be restored to perfection. Hence, the cost of car repairs, and by extension car insurance, is going up just like health insurance. This is the reason that no friend or colleague that I can recall has ever been struck by another insured vehicle, even though state law requires car insurance for everyone. The number of uninsured motorists probably exceeds the number of uninsured patients. Car insurance is beyond the reach of individuals despite, or perhaps because of, the mandatory law. Sooner or later, people who drive will demand that car insurers follow a market-based model, like that used by the earthquake insurers to restore accountability. The key word is “people who drive.” It will never come from the insurance company that profits more with a $2000 car insurance premium than on a $1000 premium, just as an annual return to the carrier on a $600-a-month health insurance policy will be twice the return on a $300-a-month policy.
Earthquake and Flood Insurance Are Probably the Only
Ones That Are Market Based
California earthquake insurance on homes has made the correct decision that after the deductible, only 80 percent of the balance is paid. This puts the homeowner in the driver’s seat having to determine how much he really wants to restore, realizing that perhaps some slight defects after an earthquake will not be worth the cost-benefit comparison. The owner is the determinant of how much is important to restore up to the maximum coverage. Perhaps a wall with an insignificant lean but structurally sound that would cost $100,000 to be made perfect will not be worth the $20,000 (20% times $100,000) out of the owner’s pocket. Thus the earthquake insurance in a possible $100,000 liability doesn’t have to pay the 80 percent or $80,000, and thus the cost of this type of insurance is relatively cheap. Market forces will determine the cost and maintain accountability. My flood insurance has similar parameters. As to my car insurance mentioned previously, if I had to pay 20 percent after my $500 deductible, I would have over-ridden the insurance company and car dealership when the estimate of restoring a steel support to perfect alignment (that no one could have possibly seen unless he stuck his head under my fender) added 50 percent to the cost of repair. The MarketPlace is always the most economical and allows access to that which costs the least, which in turn prevents excess utilization.
HealthPlanUSA–The Ideal Health Plan for the US
If providing health care to patients was a competition based on services rendered at the most economical price, the Medical MarketPlace would restore the doctor–patient relationship, increase efficiency and reduce costs. During the past twelve months, we have highlighted anecdotal data that would suggest that health insurance plans can, to a large degree, return health care to the Medical MarketPlace. However, there are currently none that do this and those that make a partial attempt still depend on government clearance and therefore have no reasonable chance of survival. Medical practice guidelines that allow any lower level allied health person to treat patients have proven totally unworkable. Except for preventive care on one end and critical care on the other, there is a lot of clinical judgment in between that requires a physician to assimilate. Political plans by-and-large only muddy up the water with their myopic viewpoints. It is time the medical profession, with the help of the business and professional community and the information technology resources that are now available, move aggressively forward. My associates are worried that we’re revealing too much. But would it not be in the interest of our patients to encourage a great ground swell of public support for this huge reduction in third party costs and the restoration of patient centered health care? We have had actuaries and economists estimate a 30 to 50 percent reduction in health care costs with these proposals. We didn’t have the $100,000 required for more detailed extrapolations. But then the best actuaries that government money could buy still miss the mark by 639 percent. We think we can do better.
1. Yearly Deductible Must Equal Your Annual Physical
The Public Employment Retirement System in California (CalPERS to non Californians or PERS-Care to natives) has increased the yearly deductible to what is estimated to be the cost of a yearly medical history and physical examination, along with related x-rays, electrocardiograms and indicated laboratory work. Currently, this is $500 for the adults in a family plan. This is a giant step in returning health care to the economics and efficiencies of the MarketPlace. The annual examination is not an insurable item any more than automobile maintenance or routine service is on your car insurance, or repairing a leaky roof is on your homeowner’s insurance. If a yearly physical examination were covered, perhaps half of the 100 million Americans who don’t usually obtain a yearly physical examination would avail themselves of this “benefit.” This would increase third-party health care costs (whether insurance or single-payer) by $25 billion annually.
2. Hospital Care Must Also Have a Percentage
The most expensive part of health care in the highest-cost center is hospital care. But it is largely without any disincentives and nearly free, except for an insignificant deductible. Therefore, a percentage co-payment must also be established for hospital care. Anecdotal evidence suggests that after the yearly deductible, a continuing co-payment of 10 percent would place hospital care in the Medical MarketPlace, wherein patients actually shop for the best deal. Should a patient be admitted on an emergency basis to a hospital not of his choosing, one can rest assured that he will check the charges in the business office the following morning. If the charges were found to be excessive, as we recently found in Redding, California, where one hospital charged $1000 a day more than the competing hospital across town, the patient would demand a transfer that day.
3. Outpatient Surgical Centers Must Also Have a
The outpatient surgery centers have taken over much of traditional surgical care. This was largely due to the fact that surgeons have devised laparoscopic procedures to remove gallbladders, appendices, ovaries and other diseased organs that allow the patient to be discharged the same day, rather than after a week or so. Anecdotal evidence suggests that a 20 percent co-payment will encourage patients to evaluate the cost–benefit ratio of any proposed procedures, eliminating many that might otherwise automatically be done without serious thought. At the present time, a surgeon informed me that he found it more convenient to use the hospital outpatient facility across from his office than the more remote private surgical center. He also found that the hospital charged $10,000 for the one day, whereas the surgical center charged $2,000. He began asking his patients if they cared where the procedure was performed. Uniformly, none objected to the higher hospital charge since their co-payment was a fixed amount. However, if the co-payment would have been 20 percent, health care costs would have been significantly reduced since the 20 percent co-payment would have decreased from $2,000 to $400, and the choice would become an easy Medical MarketPlace decision.
4. Routine Office Visits or Evaluation Cannot Be
Covered with a Fixed Co-payment.
Many plans now have a fixed co-payment for office or outpatient medicine at time of service, which varies from $5 to $25. This may be a slight disincentive for access, but not for someone with an inflated appetite for health care desires that may not improve one’s health. We have presented anecdotal evidence showing that after many patients pay their insignificant co-payment of $25 or so, they make demands for $100s and $1000s of unnecessary tests and x-rays that are unreasonable and not required for optimal health care or health improvement. These requests are so variable that they are not insurable. A percentage co-payment (about 30 percent according to our anecdotal data) will allow health insurance to be extended to outpatient medicine with a major degree of a market environment. Just as some retailers do not accept credit card payment for items less that $25 due to processing costs, a similar small, per-visit deduction, e.g. $25, will also be required before the insurance kicks in.
High Deductible Major Medical Coupled with a
SimpleCare Type of Plan
The SimpleCare plan (www.SimpleCare.com), Patmos EmergiClinic (Payment At Time Of Service) www.emergiclinic.com and others previously mentioned have returned routine office care completely to the Medical MarketPlace. This has increased the efficiency, appreciation, and cost-effectiveness of outpatient medicine. This is then coupled with a high deductible major medical/surgical/hospital plan which is relatively inexpensive. However, we have seen well-to-do professional people, when confronted with a $2500 emergency department bill, change plans because it may be difficult to have $2500 available at the moment. HealthPlanUSA believes it has solved that problem.
Medical Savings Accounts
MSAs have become very popular in some circles and are government endorsed in South Africa, and to some extent in this country. This may be coupled with the above plans to cover the deductible. This, however, creates two problems. Firstly, the first dollar costs are now covered and may cause excessive utilization. Secondly, there are many bureaucratic restrictions with the continued tentacles of regulation for the MSA. Recently, politicians didn’t like the ruling on how to use the left-over money. One can only guess how long this freedom to spend one’s own money in a regulated account will last. The ideal HealthPlanUSA will be free of the intrusive regulation of governmental authority and largess.
The Challenge of the Medical MarketPlace
With no Medical MarketPlace, there is no resultant reduction in costs because resource allocation is based on individual patient wants. This pits the patient against the doctor and the insurance carrier and results in patient demands unrelated to medical needs, since there is no liability after an inconsequential $10 or $25 deductible is met. Despite the 400 to 600 percent error normally present in centralized programs, the authoritarian leftists seem to have continual difficulty with connecting the dots between health care wants and needs to costs and accountability. With the majority of Americans having a public school socialized education and the inability to comprehend where money comes from or how it gets into the state and federal treasury, our mission has taken on a renewed urgency. We appreciate your support and the hundreds of email responses. We’re sorry we have difficulty answering and responding to all of them. Please keep them coming so we have continued input from you.
In Our Next Issue
In our July Medical-Fifth-Tuesday quarterly HealthPlanUSA report, we shall be able to present more of our structure and staff as we develop our website. At the present time, our resources are limited to my personal financial commitment from the patients I see during my 60 hour work week for which third-party medicine pays me 45 cents on the dollar. We are hopeful that will change in the future. We thank all those that have offered financial support. However, it cannot be considerable a charitable deduction. You will have to check with your tax advisor to determine if these messages are a business deduction. Remember, the world is watching as our colleagues and the business and professional communities in over twenty countries on six continents are now reading these messages. The United States is the last hope for the people of the world to be able to obtain personalize high-level health care. We must preserve this before our own government and the uninformed politicians destroy it. Forward this message to your doctor, dentist, family and friends. Remember the internet allows us to reach up to a billion people, that now have internet access, with a mouse click. After we restore our private health care system, we can export it to the world which desperately needs the ability to obtain care.
Del Meyer, MD, CEO & Founder
6620 Coyle Avenue, Suite 122
Carmichael, CA 95608 USA