It is universally accepted that Americans pay at least 30% more for their healthcare versus the rest of the world and have the same or worse outcomes. Excluding government programs this 30% amounts to approximately $500 billion per year. Efforts to rein in this massive excess have failed miserably.
It is time to think out of the box:
One way to look at non-government healthcare is that there are really 5 big hunks of money:
- Insurance companies
- Hospitals
- Big Pharm
- Trial Lawyers
- Providers/Doctors
These hunks of money are incredibly powerful and NO one can get in the weeds with them and win. The only way to get these massive hunks of money to change is to get them to fight each other. If they are not reined in the masses will demand socialized medicine and it will be hard to argue against it.
This is how you do it:
1. Insurance companies: The best way to bring these companies into a reasonable business model would be to regulate the amount of money they can use for administration. Over 10 years drop it from 15% to 10%. It will save $100s of billions of dollars/year. Remember Medicare is administrated for approximately 3.9%. Premium Increases must be indexed to cost of living increases. This will set into motion a cascade of events that will essentially control healthcare costs
Insurance companies would then go after the pharmaceutical companies and the hospitals to become more efficient. They would shed their bloated middle management. Unlike Obama care they will not be able to make up their revenues by simply increasing their premiums and collecting the same amount only with a larger piece of the pie. Things will get really nasty with the hospitals and drug companies and that’s what needs to happen. Do it over 10 years to minimize the effect on jobs and the economy.
2.Pharmaceutical companies:
The same drugs sold in America are sold across the world at a much lower Price. America is being forced to pay a surcharge and subsidize the rest of the world. One answer is to allow drugs to be sold across country lines. In essence the Trump administration is trying to do this by forcing government plans to only pay the average price of the 15 most industrialized nations. There is no reason that we should subsidize the world. In addition the drug companies engage in PRICE fixing both for generic and new drugs. They do not compete on PRICE. They compete on advertising and marketing. Also if the insurance companies are regulated they will bargain down prices. The insurance companies would look at the approximately $100 billion that disappears into Pharmacy Benefit Managers pockets in a different light.
3.Trial lawyers:
In most other Western nation trial lawyers deal with loser pays. In other words if they take a case on contingency and force a good American to pay out of his pocket to defend himself and they are wrong the loser pays. It is the only fair way and the only way the trial lawyers will be accountable for the harm they inflict. They want everybody else to be accountable but them.
4.Nonprofit hospitals:
In every community hospitals are an exceptionally emotional thing. Limit their increases to cost of living and let the insurance companies deal with these institutions. Most of the physicians are employed by these hospitals. Their salary will be decreased and the government will not have to get involved. This will control physician salary increases. They just will not happen.
Donald Trump is the only one that can make the above reality. In the high stakes poker game with the massive insurance industry he has been dealt a royal straight flush. The insurance industry faces an extensional threat from Medicare for all. If Donald Trump were able to get the insurance industry in a room and explain how they need to conform to the above criteria or become extinct the insurance industry would fold. The only thing preventing the President from doing this is the people around him are frightened to make this bold move. It is so sad that it is possible that the President sitting with a royal straight flush, that cannot be beat, will be bluffed into losing this essential hand. One can only hope that his entrepreneurial instincts will overcome the political fears that surround him.
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Dr Betti is a practicing New Hampshire physician. He helped manage a private urology practice for 20 years. Former Vice Chairman of the Lahey Health Urology Department for practice management. Member of the American Urological Association Coding and Reimbursement committee. Member of the American Urologic Association National insurance and Advisory Workgroup. Member of the New England Medicare advisory committee.
All views are his alone and in no way reflect any other person or organization.
He can be reached at CRANLK@comcast.net