Wednesday, March 31, 2010

RANT: Nobody will be happy about universal healthcare

A surgical team from Wilford Hall Medical Cent...Image via Wikipedia
What we got in March 2010 was not even universal healthcare, but just some health insurance reform.

In universal healthcare, nobody will be happy, and I am talking about the three parties: the people (who will use the coverage) the providers (doctors, hospitals, and etc.), and the insurers. Here's why

The people want to be covered for everything, and pay nothing. Right? The reality is they can only get covered for something, and pay a bit more than something.

Providers want to provide everything, and get paid for everything at price of their choosing. The reality is providers can only provide something, and get paid for what the insurer chooses to pay up.

Insurer want to pay providers nothing, take in lots of premiums from the people. The reality is They have to pay providers something.

The needs are mutually exclusive, and it's a THREE-WAY relationship. So in short, nobody will get everything they want. Thus, nobody will be happy when the solution is available.

If you want universal healthcare, you need to restrict the coverage to only the BASIC stuff, mostly preventative checkups and such, with a pretty large deductible / co-pay, and only catastrophic coverage (preferably, no cap). Most basic policies, those like $100-150 already does that, so you just have to set some sort of a national standard on what constitutes "basic coverage".

Keep in mind that insurers are generally out to make money. Insurer can make money three ways: 1) raise premium, 2) reduce payout, and 3) be more efficient. The only way to control them is to FIX their premiums, and legislate mandatory coverage. This will force them to be more efficient, as well as offer alternative / supplemental / premium plans for more profit. (Choosing a specific pool is "reduce payout", since they are basically tilting the odds so they don't have to pay much).

The overall deductible and co-pay level is set by law. Insurer can offer Premium / gap plans to provide additional coverage or lower / zero deductible / copay.

Care providers are out to make money, but they usually have enough dickering with the insurers on the actual rates paid. Some sort of a committee should set prices composed of members from both provider and insurer on a national level, or at least state / region / county level, revised quarterly.

One possibility to encourage development of new treatment is allow a high-priced period, say, 12-24 months, for the new procedure, but there needs to be a lower-priced alternative available as well. This is similar to the "drug patent" period before the introduction of generics. If a provider can constantly introduce new procedures, they will reap benefits, and the result is better care for everybody eventually. However, all providers must agree to the BASIC fees and coverage (of their area of expertise).

The people then will pay toward universal healthcare instead of medicare tax. You can choose the specific insurer. You get the most basic stuff, universally accepted, universally set rates. You can also choose gap / premium coverage that controls deductibles, co-pays, and whatnot, as well as more covered items, such as stress management, acupuncture Chinese medicine, and other alternative medicine, and so on.

Perhaps in the near future, you will be able to do a DNA test, and use that to custom tailor an insurance policy with the specific coverage you need, instead of choose a "package" that may not fit you. You'll get a minimum, but can choose additional line-item coverage at the level you want.

The "smart card" and a terminal at each and every provider facility will minimize the inefficiency. As everything is computerized, an AI program will scan all submitted items for abuse patterns, or even strange usage patterns (which is a secret, and self-tuning). If you have too many doctor's visits, you may trigger an audit (where someone calls you up or visits you to check up on you, both as a review of the provider/insurer, and why you're using it too much). Your card will give access to your medical history (with appropriate access trails / logs) as well as your coverage level. You are given a special password, using public/private key encryption.

At least, that's the idea that I have.
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