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Networking to Develop the Ideal HealthPlan for the USA

HealthPlanUSA Quarterly Newsletter for October 2002
This is the six-month anniversary of HealthPlanUSA. It networks on the fifth Tuesday of each quarter. 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.

HealthPlan Overview - USA
The United States currently has a number of private and public health plans. The working classes generally obtain their health care insurance through an employer-sponsored plan, which may be a Health Maintenance Organization (HMO) policy, a Preferred Provider Organization (PPO), or a fully covered indemnity plan with various fixed or percentage co-pays. Because of continued increases in health insurance premiums, these defined benefit plans may be replaced by a defined contribution plan, in which an employer contributes a certain set amount to the employee’s choice of health  insurance with the balance paid by the employee. Having been shielded from any conception of costs, most patients’ lack of understanding of health care financing may be further confused by the defined contribution plan. Their impetus will likely be “somebody, like the government, please help us.” Should that happened, it would be only a short term phenomenon as even more exorbitant costs would exceed any possible tax increases.

Socialized Medicine - USA
The USA has a single-payer system or socialized medicine for the elderly, the disabled and the poor. According to Goodman, this combination has probably given the United States the best social net with the least bureaucratic interference and the highest quality and access of care found any place in the world. Ann Coulter states that the United States is not a third world country and people buy what they wish to purchase, whether homes, cars or vacations, which vary in expense depending on their income and tastes. However, many of the thirty million people that wish to purchase health care without having to purchase health insurance are considered to be under served. The statist left estimates it is more like 40 million while the proponents of individual freedom on the right believe it is more like 20 million. This variation is consistent with the scientific accuracy of many health care estimates.

Oregon’s Human Guinea Pigs
Socialized health care has been a failure in every country in which it has been tried and has now been repackaged as “Single-payer Medicine” in the United States. Oregon leads the pack.  Dr Harvey Frey, an out-of-state activist promoting Oregon’s single-payer initiative on the ballot next week, states “It’s important to know whether such a system will work and the Oregonians are offering themselves up as guinea pigs.” The WSJ editorializes why Dr Frey fails to explain why he thinks Oregonians should fare better than the laboratory human guinea pigs on medical-care waiting lists in single-payer countries such as Canadian Medicare or UK’s NHS. The estimated cost in Oregon will exceed taxes by $3.5 billion in the first year alone with new taxes averaging approximately $5,000 per resident. That is more than gold–plated private health care coverage would cost per person.

Cross Purposes in HealthCare
Unfortunately there currently isn’t a major health plan in the United States that returns health care to the competition and cost savings of the Medical MarketPlace. In all cases, there are many counter productive influences which cause great excesses in the cost of care without improvement in the quality of care. Government involvement has generally revolved around reduced care for cost containment reasons unrelated to the individual patient needs or welfare, which in turn has reduced the quality of care. The HMOs have simply replaced a government bureaucracy with their own bureaucracy. The government and HMOs have instituted measures to restore quality, but they are window dressings for public relations purposes and do not restore the quality which was present prior to their intrusion. Returning health care to the Medical MarketPlace will introduce real competition which reduces costs and increases efficiency, innovation, and quality, along with making care more affordable. It further personalizes the health care to each individual's medical needs, whether real or desired, without imposing on others the huge variation in health care appetites.

Competition Is Always Good News
HealthCare is primarily a personal relationship of patients with their physicians. Patients tell us things about themselves they wouldn’t think of telling their Priest, Minister, Rabbi, or attorney. But as health care became more expensive because of technology and hospital expansion, not controlled by physicians, costs went out of sight. When I was a  medical student doing my preceptorship in rural Kansas in 1961, the three local doctors owned their own hospital. I stayed that month in their private room, one for which they charged patients $10 a day, generally paid in cash, which was also covered by Blue Cross/Blue Shield. The semiprivate rooms were $8 for each patient, and the one 5-bed ward was $6. The doctors checked the hospital prices in the neighboring towns and frequently found that the costs were higher. As they considered their cost, they agreed that they were making adequate return on their investment and never raised their rates for ten years. They also bought the latest equipment they felt necessary to provide the care they felt optimal. They told me that some of the nearby hospitals were about 300 percent higher. But competition kept their hospital full at all times, especially as patients from neighboring towns sought them out. Their office calls were $2, and the patients all seemed pleased to be seen. The free market kept health care affordable for all concerned, providing high quality  in a very pleasant environment.

Reverse Competition is Always Bad For Patients
Two developments changed the personal relationship patients had with their doctors. The government took over health care of the elderly and, in order for payment, the diagnosis had to be reported to Medicare and Medicaid - an intrusion of the confidential doctor/patient relationship and patient privacy. Hospital Physicians-in-Chief were being replaced by facility administrators. Money was coming in from the taxpayers faster than doctors, administrators and hospitals could spend. There was reverse competition, with hospitals trying to be the most expensive. Departments in one hospital conferred with their counterparts in adjacent hospitals, and the one charging the lowest fees would raise them to the highest, rather than the reverse. This reversal of competition resulted in obtaining the highest possible revenue not balanced by competition, because there wasn’t any.

HealthPlanUSA’s Mission
When I was Director of Respiratory Therapy in one hospital, I controlled the costs, or so I thought. My department was always the lowest in the city but still received the highest revenue over cost of any department. One day my Technical Director informed me that he had discovered that the price of oxygen had risen from 25 cents an hour to three dollars an hour. The administrator could make this change because my therapists only recorded the hours per day each patient received oxygen. The business office made the calculation of charges. When we determined that the actual hospital cost of oxygen was 25 cents an hour, we went to the administrator in charge of our department for an explanation. He could not understand our concern. He looked at me very sternly and said, “Isn’t getting the money in the name of the game? We still have not found the maximum that Medicare, Medicaid, Blue Cross & Blue Shield will pay. In fact, I have already authorized the next increase to $3.50 an hour since they are paying the current rate.” He did not see this as price gouging or as unethical. This sort of practice primarily occurred because patients were removed from the financing and thus the hospital did not have to account to them for any fees. Bringing back accountability in health care is our primary goal.

Del Meyer

Del Meyer, MD, CEO & Founder
HealthPlanUSA
6620 Coyle Avenue, Suite 122
Carmichael, CA 95608 USA
DelMeyer@HealthPlanUSA.net
www.HealthPlanUSA.net