How are WE paying for healthcare?
Some of the terms below (red plan, green plan) originated earlier in this series of healthcare posts. If you are not familiar, just jump back and check them out.
I could go uber policy wonk and dive into the federeal budget. But let's be real, the average person does not want that level of detail. Here's an extremely short version of health care cost savings from the White House. You can determine how much you believe the numbers and your interest level. Consequently, I wanted to think about funding health care in simpler terms. It's about money from inside the system and outside the system.
Inside money comes from cost savings based on things that we do within the healthcare system. If you used to buy a medicine for $3/pill and you now get it for $2/pill, there is a $1/pill cost savings. You multiply that by the number of these pills used in a year and that is your annual cost savings. The trick is to only count the real cost savings and not the fake ones. A fake one would be a savings of $1 per interoffice call if the price of the call truly stays inside of the hospital. If the cost savings does not show in a reduced cost from the phone company that provides the service, it is a false savings.
There is a lot of money to be saved inside the system. While I prefer that the government stay out of competitive, private industry things, when they do get involved, the Feds MUST get cost savings inside of the healthcare system based on the large quantities they control. This is true for medicines, medical tests, and all sorts of activities that support the basic (previously called red level plan) healthcare. The same is true for all of the current medicare & medicaid level healthcare.
Here is an example of how that inside savings can work for private companies. I need a medical test and for some reason get a 2nd opinion. Let's use the same information when possible instead of running the tests again. If the test are run again, let's have a follow up step to determine the value of the additional testing. If it is a low value test, the reimbursement for that testing is split--some to the testing organization and most to the red level fund. Now wasted tests are helping to pay for basic levels of healthcare. Either the testing becomes more efficient and effective or it helps to fund healthcare for those that cannot afford it. Either way, the system gets better.
One other area that could save money and improve healthcare in the long run is centralized patient information. Instead of relying on the memory of a sick person, let's put all of that healthcare information in a centralized place where medical professionals can access it. We would save money on record keeping. The severe downside is privacy and how the information might get (mis)used. If you want an extreme example, see the movie, Gattaca. You could let people opt out of the system, but they would be responsible for the storage, cost, and accuracy of their own records. No chance to sue the doctor who got the wrong medical information from you.
On the public side, few if any people want to pay more taxes. In reality, the people that have the most resources are probably least in need of healthcare reform. It is politically unpopular to put the burden of healthcare expenses on people with fewer funds. We often turn away from the fact that it is easier to get $1 from the average family than it is to get $1 million dollars from a rich person. There are only so many rich people to go around. How do we balance these concerns for a shared sacrifice? I'd suggest a combination of a consumption tax that impacts everyone and a tax on the high end (green level plan) medical services that are more optional than necessary.
That's my 2 cents on paying for healthcare. Is it enough to make change? Ask your congressperson and senators--soon.
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