Tuesday, July 14, 2009

What We Need for Healthcare Reform

Healthcare reform is big news right now. Congress is hard at work trying to overhaul our healthcare system to make it less expensive and cover more people. These are admirable goals and they will be extremely hard to accomplish. The ideas that Congress has come up with seem to revolve around a government healthcare plan paid for by taxing the rich. I'm not confident that this will be a good thing in the long term. It simply creates another government plan that will probably underpay (I've heard that doctors are dropping out of Medicare because it doesn't pay enough to cover the costs of the service).

In my opinion, we need to focus on what makes other services better and cheaper and try to adapt those principles and models to healthcare. So, in my opinion, healthcare reform should include the following:
  • Encourage Competition: There should be no captive markets (how many insurance options does your employer give you?). Insurance carriers need to work to win over people not companies. With effective competition, the most efficient and effective plans will come out on top and those that can't adapt will wither away. This is how the market works best. Real competition will drive down prices and increase service levels.
  • Reduce Complexity: Have you even noticed how medical offices seem to have more staff to handle billing than actual doctors? All of those employees cost money. All of the insurance employees dealing with them cost money. All of that money comes from us. Shouldn't going to the doctor be like buying anything else? Just slide your card and you're done. No forms to fill out, no fighting with the doctor's office about what procedure was done and whether or not is was covered, none of the headaches of dealing with the insurance companies. It saves time, money, and stress.
  • Reform Liability and Malpractice Proceedings: How many people in this country look at injuries like the lottery? Sue the company, sue your doctor, sue your neighbor, etc. To me, this just isn't right. If a person gets hurt and it's the fault of a company (slipped in a grocery store or something), the company pays for the medical bills and court costs and that's it. If a doctor loses a malpractice suit, the payout is limited to medical bills, court costs, and lost wages. If punitive damages need to be assessed, they will follow these rules: 1) Punitive damages do NOT go to the victim. This is not a lottery. The victim is already being compensated. Hopefully this will reduce the number of lawsuits as there's no money in it for the victim. 2) Punitive damages are NOT paid by insurance. The purpose of punitive damages is to punish the offender. If insurance pays for it, is the offender punished? 3) Malicious intent must be proven for punitive damages to be awarded. Doctors should not worry that they'll be sued for giving their best guess and/or their opinions. Sometimes talking to a doctor feels like talking to a lawyer. They will only say what can't be used against them in court. Doctors deserve the freedom to be doctors.
  • Eliminate Pricing Disparities: Have you ever noticed that what you're charged and what you pay are radically different? If seen lab tests that are billed at $150 but discounted to $7.50 because of insurance contracts. That's not right. Charge what you need to charge for the service. These pricing swings are confusing and punish those who don't have insurance.
Those are my ideas on healthcare reform. We have a good econimic model in this country but healthcare has been regulated to point that it's hugely inefficient to do anything and yet we wonder why it costs so much. As for government supplied insurance, if you're going to have it, make sure it pays at least the cost of the procedures it covers. If doctors start losing money on patients, they'll stop seeing them and we'll be right back where we were before.