Health Care System is “Broken”

Everyone knows that the Health Care System is “broken”. Health insurance costs and medical expenses continue to rise. Forty five (45) million people are uninsured. Few incentives exist for the drivers of the system to control health care costs. Both the patients and the physicians are the drivers of the system. Other stakeholders in the system are the hospitals, insurance companies, government and employers. The employers can not afford the escalating cost of insurance. The employer’s defense is to eliminate or cut back on the insurance coverage.

The insurance industry and the government have failed to control costs. Explanation of benefits is practically incomprehensible. Both government and insurance industry’s costs are greater and greater because their complicated attempts to control costs does not work. It is, now, the consumers turn to try to control cost.

Consumer Driven Health Care alters the power equation. The concept makes the patient responsible for their own health care costs. Consumer empowerment is a dynamically growing movement. Its growth has been spurred by the wide availability of Information Technology though the Internet. Price transparency leads to price competition and wider choice. This price transparency consumer driven health care can control cost.

How does it work? Eighty percent of the health care dollar is spent on complications of chronic disease.  The patient has a high deductible. If the present cost of an insurance policy is $12,000 per year, the employer places $6,000 in a trust for the patient. The insurance company administers the trust and have access to the first dollar. The employer then obtains a $6,000 deductible policy for the employee. If the patient does not spend the $6,000 the remainder is placed in a trust for the employee at retirement. This trust account is totally portable at no penalty for movement. If a patient has a chronic disease, and we expect them to spend $4,000 to become a professor of the disease in order to prevent complications, we want him to spend the $4,000. If the patient prevents the complications of the chronic disease, we give him a reward of $2,000/year, so he is motivated to learn how to, and keep taking good care of himself. If he does not take care of himself and has a complication, he loses the trust money.

Everyone, including the uninsured have a tax deductible benefit for the insurance they buy or insurance bought for them. Everyone is under a community rating system so that no one gets preference in purchasing price for insurance. The uninsured can get health insurance at an affordable cost. The insurance company administering the policy and trust continues to negotiate the fees with the physicians, providers and hospitals. The insurance company picks up 45 million customers. The patients are motivated not to overuse the system. They become educated and sophisticated purchaser of medical services. The education is aided by the Internet, physicians ,insurance industry and government.

Stanley Feld M.D., M.A.C.E., Clinical Endocrinologist, welcomes your thoughts and comments.

Stanley's son Brad Feld encouraged him to start the Healthcare blog - it's a grassroots effort with a 30,000 foot view, that can create change fast with your involvement. You can learn more about Dr. Feld at w3w3.com