My 7-Point Health Care/Insurance Reform Plan

Ordinarily, this Blog site is used to provide information, ideas, strategies, explanations; in short – clarity – for health care/insurance stakeholders.  Today I’m departing from the usual fact based format to provide my thoughts and opinions on what would be a good way forward with respect to REAL healthcare/health insurance reform. These ideas are based on my 30-plus year career in healthcare financing and insurance, and are absent any political bent or particular bias.  Both the current House (passed) and Senate (proposed) bills are “patchwork efforts” designed in my opinion, to address some of the many critical issues facing healthcare delivery and healthcare financing, such as the crumbling individual health insurance markets.  But both bills, and most of what I’ve seen and read over the last seven years, fall perilously short of actually achieving the ambitious goals of:
1. Insuring more people
2. Lowering premiums making health insurance affordable
3. Maintaining and continuously improving quality of, and access to care 
Before I lay out my seven-point reform plan, it’s important to review a very important reality.  The United States has chosen a for-profit, largely private sector, government regulated (as opposed to government controlled) healthcare system. (Note: Medicare, Medicaid, and Tricare are variations from this system, and in fact, resemble many socialized healthcare systems that exist throughout the world.)  Such a “free markets based” system differs greatly from the government run, single payer style systems implemented by our Canadian neighbors to the north, and most of Europe.  As such, we rely on, and very much need insurance companies to offer affordable coverage to the masses, in order to provide citizens with the ability to pay for their healthcare.  One of the unintended consequences of the Affordable Care Act (ACA) has been the mass departure of insurance companies from the individual market.  So priority one at this time, is to get the insurers back into the marketplaces.
Interestingly, there are discussions taking place to move our healthcare system away from its current format, to more of a “Canadian style”, single payer; government-controlled system.  Such a system has numerous trade-offs associated with implementation and use.  Perhaps I will address these in a future blog post!
So here is my seven-point reform plan, for what it’s worth…
1. Repeal of the more onerous provisions of the Affordable Care Act (ACA)…particularly those causing the collapse of health insurance markets (e.g. community rating, pre-existing condition ban, minimum essential health benefits mandate, standardized/metallic plans, taxes/fees, etc.)

2. Entice/encourage insurers to come back and offer affordable coverage to potential customers (Note: no.1 above will help accomplish this objective.).  One of the more urgent and important ways to do this, is to allow insurance companies to penalize, if not avoid the occurrence of individuals gaming the system and waiting to purchase coverage at the precise time they need it, only to drop coverage after all claims are paid.

3. Create separate insurance risk pools for the chronically ill and the rest of the insurance buying public. (Note: The top 1% of healthcare spenders consumes more resources collectively than the bottom 75%.)  Separating risk pools, along with no.1 above, will attract insurers back to the markets, and allow for more affordable priced coverage, and competitive insurance markets.  Appropriate funds for the creation of risk pools, reinsurance programs, and innovation of ideas to address the insuring and treatment of the chronically ill, high-risk population.

4. Reform Medicaid. Consider moving to a “block grant” funding mechanism at the federal level; and give states more autonomy and flexibility with respect to administration, innovation, and funding.  Under a block grant format, states would be given a fixed amount of funding based on spending levels, with associated annual increases tied to inflation, and the ability to determine things like covered services, eligibility for coverage, etc.

5. Continue implementing the ACA’s healthcare delivery reforms, which seek to move reimbursements away from fee for service, to fee for value.  The so called Accountable Care Organizations (ACOs) created by the ACA seek to reimburse providers based on standards such as quality of care, outcomes, and patient satisfaction, instead of the sheer volume and amount of care provided.  As healthcare costs decline, health insurance premiums will follow suit.

6. Place a federal limit on medical malpractice punitive awards, and allow states the flexibility to have even lower ceilings based on merit and circumstances.  The mere threat of unreasonable medical malpractice litigation results in a chain of events which cause health care and in turn, health insurance costs to spiral.  In addition, healthcare providers are sometimes compelled to order/perform procedures they might not necessarily conduct, just to build a preemptive litigation defense. Part of this particular reform effort could include the creation of medical standards of care, which if followed, would remove any liability.

7. Expand upon the “consumer driven health” initiative, including the expansion and relaxing of the use of Health Savings Accounts (HSAs).  It’s extraordinarily important for healthcare patients to act more like customers; and consider cost, quality, and outcomes in reaching important healthcare related decisions.  Also, creating multiple funding sources for both lower cost/predictable and higher cost/catastrophic healthcare expenses makes more sense for everyone.  For example, it makes absolutely no sense to “insure” and rely upon insurance, for a $4 prescription drug, a $125 physician consult, or a $50 chiropractic care visit.
Some of the aforementioned points are included, and/or addressed in the current House (American Health Care Act), and Senate (Better Care Reconciliation Act) bills.  For example, each of the bills addresses Medicaid and repealing most of the ACA’s fees/taxes.  But in my opinion, these bills fall woefully short of achieving the comprehensive overhaul of our healthcare system that is so desperately needed.  Stay tuned!