Make Cash King in the Healthcare Reform

Cash payers should get the best available rate for health care services.

It is becoming more and more apparent that Republican reforms of the ACA will drive people out of the health insurance market by the millions.

How to lessen the sting to these unfortunate health care consumers? Mandate that cash-paying patients get a rate not to exceed the rate that Medicare pays for the same service.

By capping fees to the corresponding DRG (diagnostic related group) prices, patients without insurance will avoid being victimized by unscrupulous medical providers who have separate price lists for uninsured patients, lists where the prices are often more than double what they accept from insurers.

And, why not? When a provider sends a claim in to the insurance company they have to wait weeks or months to be paid, risk getting certain charges denied, or risk not getting paid at all if the patient has not yet met their deductible and is unable or unwilling to pay.

Cash at time of service solves all these problems: it lowers costs to doctors and service providers, and lowers the out-of-pocket costs to the patient.

Hopefully, the Republicans can include this sort of common-sense consumer protection that also benefits the service provider into their reform of Obamacare.

What Happened to the AFFORDABLE Care Act?

The red line is the per member cost of health insurance in the individual market, which is exploding.

The Republicans in Congress are absolutely correct to assert that Obamacare is broken. The Affordable Care Act (ACA), as Obamacare is officially known, was designed to offer access to health insurance for millions who were locked out because of preexisting conditions while simultaneously decreasing costs for everyone by mandating that young, healthy people join the marketplace (or pay a fine).

Unfortunately, as an S&P Global Institute report has found, the system has proven to be fatally flawed and the individual marketplace is collapsing under its own weight, crushing family budgets and the dream of health care for all in the process.

The fundamental problem is that the ACA shifted risk that private insurers were never comfortable accepting to the private market without government-run alternative plans as a back-stop to exhorbitant premium increases. This resulted in many companies coming to the conclusion that the ACA marketplace is fundamentally unworkable and leaving it altogether. With fewer providers in each marketplace, and therefore less competition, premiums have risen dramatically.

In a nutshell, Obama never should have ordered private companies, whose obligation is to maintain profitability (or, at least positive cash flow, in the case of non-profit providers) to provide health insurance to the very sick. As I mentioned in a previous post, so-called health care "super-consumers", who only amount to 5% of the total population, demand 50% of all health care dollars. Prior to the ACA, many of these individuals were getting their health care through emergency rooms, with the bills going to a federal fund set up to help emergency rooms provide these services, but not through the individual health insurance marketplace.

Now, these individuals are able to join the individual marketplace and their bills are being paid by the insurance companies, causing the premiums for the other 95% of those in the individual marketplace to spiral out of control. That this was going to happen should have been patently obvious from the outset.

So, how to sort out this mess? I have a list of proposals:

• Allow private insurance companies to subject new applicants to medical underwriting.
• Keep the mandate that everyone carry health insurance or pay a fine.
• Provide government-run insurance policies for all those who cannot get private insurance.
• Provide goverment assistance to cap out-of-pocket individual insurance premium costs to 6.5% of adjusted gross income (the current tax credit model is fine).
• Empower the FDA to set list prices for patent and off-patent drugs, with annual review and adjustment.

This is very similar to the German model, which I have referred to as a good alternative to the mess we call health care adminstration in the United States.

By any measure, the U.S. health care model is broken. In the chart below, the yellow line that is deviating from the group are U.S. healthcare expenditures as a percentage of GDP:

In 2015 the U.S. was spending nearly 17% of GDP on health care, compared to less than 11% in Germany. To put this in perspective, the U.S. spent almost $60,000 per person in 2015 on health care expenses, compared to about $42,000 per person in Germany.

What I believe is occurring in the U.S. is that the outsized growth of health care as a portion of GDP since the 1980s has effective resulted in a massive concentration of wealth in the sector, and it is this high concentration of wealth which is fueling the opposition to any real cost-cutting or efficiency reforms.

For example, the compromise that Obama was forced to accept when he lobbied for passage of ACA was that there would be no governement alternative to the private and non-profit insurance companies, which effectively guaranteed that participation rates AND premiums would rise, against a backdrop of health care costs that continued their incessant march to higher and higher levels. Government-sponsored plans would have been a bulwark against these premium and cost increases, since the federal government already has demonstrated the ability to negotiate lower rates from hospitals than the largest insurance companies are able.

I really believe that we have to stop the silly, amateurish game of trying to design a better health care system, when the Germans have already achieved this goal. Their social model started as early as 1883 and has had over a century to evolve and reform. At the heart of their model is the premise that access to the health care system is the right of all Germans. From there it uses a blend of over 1,000 different plans, both public and private, combined with a creative mix of taxes and subsidies, to achieve its overarching mission. And, by almost any measure, it excels in providing health care to it citizens, something that the United States has never been able to claim.

Fasten Your Seatbelts

Meet Radical Islam's New #1 Recruiter

Not only has the Trump Administration violated the basic ethos at the heart of the American experiment, he has instantly made us much less safe in the process.

Because the Adminstration's broad-brush application of immigration policy is widely perceived to be anti-Islam, moderating Muslim voices will have a hard time getting heard, inevitably leading to a further rise in extremist thought and action, both here and abroad. Some will argue that this is "their" problem, not ours, but the fight for the hearts and minds of moderate Muslims has always been central to U.S. diplomacy.

Judges can reverse his executive order, but the damage has been done. Those who are now less safe than before are:

#1) U.S. and allied troops serving in the Middle East.
#2) Muslim leaders who are allied to the U.S.
#3) Americans living and working in predominantly Muslim countries.
#4) Americans at home.

Once again, I struggle to see the logic in this new administration's thought process. There are other, more diplomatic, ways to achieve their basic goals if they want to limit or even shut off the flow of refugees without issuing radical and polarizing executive orders; a quiet internal memo, or maybe even a few well-placed phone calls, might have sufficed.

So, it seems as if the Trump Administration is hell-bent on sowing chaos in order to shift to a new paradigm. Another word for that? Anarchy.

Pinche Muro Estúpido

Part of the already existing border wall, this section in Nogales, Texas

Why is Donald Trump trying to do everything he can to burn every ounce of goodwill that we might have accumulated since the Mexican-American War? How is that part of a good negotiating strategy when dealing with a close neighbor and ally? This is exactly what I feared when Donald Trump was getting close to winning the Republican nomination, which is that his style would degrade the discourse and elevate our most base instincts.

For example, does he not understand that making a border wall such a high priority, and insisting that his neighbor pay the construction cost, is the perfect recipe for a complete disintegration in diplomatic relations? Is that his objective? How is that in the interest of the United States or in the region's interest, for that matter?

Not to mention, that we already have walls in place where the Border Control agents have determined they are most needed (typically where there are two contiguous urban areas that cross the international border, such as in between Nogales, Texas and Nogales, Mexico), and adding walls in the vast, desolate areas where there are few people or eyes watching will serve as little obstacle to a determined migrant.

Add to all of this the completely irresponsible Trump threat to impose a 20% duty on all Mexican imports, when he knows perfectly well that customs duties between the U.S. and Mexico are set by international treaty and that arbitrary contravention of said treaty, except in times of war, is illegal?

Mexico and the United States have many common interests and many ways in which to benefit one another. Shutting down Mexican imports will not miraculously bring back American jobs and will not stem the flow of migrants and drugs from Mexico. To the contrary, Trump's actions, which are already destabilizing Mexico in dangerous ways and are threatening to weaken the U.S. economy, could cause these problems to get much, much worse.

Health Care Super-Consumers

Some healthcare consumers are in and out of the ER constantly

In the healthcare industry there is a term for patients who consume exceedingly high health care dollars: health care super-consumers.

It turns out that these super-consumers, who represent 5% of all domestic health care consumers, consume 50% of the total health care dollars.

I need to repeat that: 5% of consumers of health care services demand 50% of all health care dollars.

No wonder, when Obamacare demanded that health insurance providers cover all consumers regardless of prior health conditions, premiums for the rest of us started going through the roof and insurance companies started leaving the marketplace.

Prior to Obamacare, these patients were either not covered by any plan or were covered by Medicaid. After Obamacare, they were able to join the ranks of the insured, resulting in an explosion in claims costs for the insurance companies.

This is why the federal government, or the state governments with or without federal funding, need to insure these super-consumers and get them off the rolls of the health insurance companies.

The way the system is now, at least 50% of the typical consumer's health care insurance premiums go to fund the needs of only 5% of the population. It is fundamentally unfair to ask that of the average U.S. family.

As a nation, particularly a nation as powerful as the United States, has a moral obligation to provide for the health care needs of its populace. However, charging exorbitant insurance premiums with ridiculously high deductibles is not an answer.

If the insurance companies go back to the model where they can red line certain consumers based on pre-existing health conditions, thereby pushing them into a federal or state plan, the majority of the population can go back to health care plans with low premiums and low deductibles.

God knows the status quo is not working anymore.

German Healthcare Engineering

By any measure, the U.S. healthcare system is failing in its primary mission: to provide the overall population access to healthcare at a cost that does not bankrupt the nation.

We can argue about the details, but why, when an example of how a healthcare system should work already exists, in Germany?

Without going into too much detail, the German system is the best existing hybrid of public and private, without the rationing of care that exists in Canada and the UK, and at a reasonable cost. The efficient, German system costs the Germans 10.5% of their GDP, while our fractured, chaotic system cost the U.S. economy 17.9% of GDP in 2015, and is rising dramatically.

So, we should simply adapt the German system to the U.S. market with one primary interest in mind: the health and satisfaction of the U.S. healthcare consumer.