I am presenting you my
opinion about single payer health care systems because I believe in them.
I am also here to tell you that we here in the United States have three,
yes, three single payer health care systems. Not only do we have them, they
work, and they work well. They work so well that none of us would want to
do without them. One is Medicare; two is Workers Compensation and three
is the Veterans Administration. The two that I know best are Medicare and
Workers Compensation. I therefore leave the comments about the VA to
those who are better versed in that area than I am.
I am considering Medicare
and Workers Compensation side by side because both have a lot of exposure to
the general population. One of them is a slave to the traditional probabilistic
underwriting system to determine the level of premiums. The other operates
on an experience rating system to determine the amount of premium to be paid by
the buyer. My deep disappointment with the current government team in
Washington as well as with the ambitious pretenders is that neither one of them
has the purity of morals nor the strength of convictions to do what is right by
the people of our fair country. Health care is not a political issue.
It is a moral one. We all know what happens when politicians set
themselves up as the arbiters and the deciders of how moral issues should be
tackled.
So, who am I?
I am a seventy-five year
old male who just 5 months ago failed a Low Testosterone test. I am still
at the 65% level of normal hormone level for a man of any age. I am also
a person who worked for more than thirty years managing benefits and safety
programs for large and small manufacturing companies in the state of
California. During those thirty years I fought tooth and nail against the
arrogant venality of health insurance providers. As tough and as nasty as
I can get, I was never able to come out ahead in the game. I even went
through a period of five years when I created and managed a self-insured
program. For the first three years, I was ahead, but then "medical
care inflation" caught up to me too and it became a "wash"
between self-insured plans and fully-insured ones.
I am also a person who for
those thirty years managed the safety programs of these same manufacturing
companies. As such, I was the person who dealt with the Federal and State
Occupational Safety and Health Administrations [OSHA] as well as with the
accompanying Workers Compensation insurance providers. In the second
instance, I was able to get ahead of the game and stay there. We took
steps to bring the premiums down. The administrative system of the
workers' compensation health care is managed by the state and is a single payer
system that works marvelously well and doesn't succumb to the wiles of the
greedy insurance companies. I tell you this because it is important for
you to know that though I am not an expert in
the field, I do have a lot of experience.
Finally, while I am
telling you who I am, I will declare that I have been a patient in Italy,
France, Philippines and Mexico. They all have a combination government
managed single payer system plus private access fee for service systems.
In all those countries, as in just about every other country on the
planet, prescription drugs are less expensive than they are in the USA.
In every one of those countries, I walked in to the health care system
and was treated competently and effectively without worrying about the bill.
I also got good follow-up care. Yes, I know single payer systems.
I also know that the US politicians lie about them all the time. It
therefore follows, that simple folk believe the lies of the politicians because
they have no experience outside of what they know in the US.
Now what?
First things,
first. It is my observation that both of the single payer systems that we
have for the civilians in the USA are satisfactory to the general population who have access to
them. Medicare operates through private corporation health care providers
who bill Medicare for services rendered.
Workers compensation is
also operated by the government through private corporations according to very
strict governmental regulations. In the workers compensation model, the
employer chooses the healthcare provider, but pays the premium to the
government. In some states, like California, the employee may elect to
have a private family doctor be the primary contact for care.
Medicare is funded by
three distinct revenue streams. The first is from premiums paid
by the prospective patient (the employee) through payroll deduction during
the earning portion of a person's life; the second is from the employer who
matches the amount of the payroll deduction taken from the employee and submits
that amount to the government; the third is from premiums paid by the retired
employee, usually as a deduction from the social security benefit on a monthly
basis. At this time this amount is about $1,100 per year. It is
therefore clear that the lion's share of the premiums paid to the Medicare
system come from the prospective patient and no one else. On top of that,
Medicare has a co-payment component that is paid by the patient whenever he/she
accesses the health care system. The prescription drug portion of the
Medicare system is too grotesque to try to consider in this short essay.
All things being equal, Medicare
is not an entitlement program. Medicare
is a contractual obligation that the government has to the people who have paid
the premiums, and who continue to pay the premiums until they die.
Workers compensation is
funded wholly by the employer. In both instances, private corporations
are the direct and immediate health care providers. Workers compensation
is organized tightly around legal regulation for the protection of the
prospective patient through safety programs meant to protect the employee from
injury or bodily deterioration, while Medicare has a very weak wellness
component.
This leads me to my
fundamental contention that what we need in this country is a strong single
payer healthcare system that is a hybrid between Medicare and workers
compensation. My corollary contention is that if this is done correctly,
our national healthcare costs would come down because the prospective patients
would have strong monetary incentives to keep themselves healthier.
There is already an
element of this included in the Affordable Health Care Act.
You mean
"ObamaCare" right?
The short answer is
"yes." The Affordable Health Care Act has an element of
"experience rating" in it that is beneficial to the policy holder, or
the patient. It is a provision that says that the insurance company must
keep its expenditures for doctors, hospital bills and other activities to
improve health care quality to a maximum of 85% of all the premiums collected.
If the insurance company spends less than 85% for all of the above, it
must reimburse the amount of money that it took in but did not spend to the payers
of the premiums. The consequences of this provision are important.
Here's why.
Employer Acme Explosives
(Wylie Coyote's Company) has 500 employees. They have a health care plan
with RR Dust Cloud Ltd. (Beep, Beep!) Last year Acme paid $1,000,000 in
premiums. The insurance company spent $750,000 of it for the
items enumerated above.
It is easy that see that
they amount spent is only 75% of the total $1,000,000. In order to comply
with the tenets of the Affordable Health Care Act, RR Dust Cloud Ltd. must
reimburse Acme Explosives the 10% difference between $850,000 and $750,000 = $100,000.
It is easy to see that
under these conditions, the people who pay the premiums have some leverage in
the controlling of the cost of their health care. It is in their better
interests to develop healthier lifestyles so that they can save money in the
subsequent year.
Not quite workers
compensation, but...
The workers compensation
model is somewhat similar, but not exactly identical. Employers strive to
keep their employees from incurring on-the-job accidents. They also train
them how to work properly so that their bodies do not develop aches, pains and
strains through bad habits in the performing of repetitive tasks. The
fewer the medical claims incurred by the employees in a determined industry,
the lower the premiums go because the expenses demanded of the insurance
companies are less. This measure of performance is called the
"Experience Modification." If the companies in a pool have an
"Ex Mod" of let's say .85 and Acme Explosives has an "Ex
Mod" of 2.0, Acme's premiums will be significantly higher than those who
are at, around or less than the .85. This statistic is maintained on a
three year rolling average and is a large positive incentive for companies to
focus on. One company I worked in had an "Experience
Modification" of .67. Now that is a savings!
A "pipe
dream?"
I don't think that
creating positive economic incentives in the health care arena of employer
funded health care benefits is a pipe dream. After all, the employer has
control over the lion's share of the premium. If employers can teach
employees how to work safely, they most assuredly can teach them how to live
healthier lives and encourage them to do so. For years now the cost of an
emergency room visit has steadily increased to astronomical heights.
That's negative reinforcement. Rebates are positive reinforcement.
I think that the important
psychological element of this provision of the law is the personal control that
it gives to the payer of the premium who is also the payer of the co-pay.
So now the prospective patient can save two ways: Save the co-pay and
work at saving an extra $10.00 per month next year. Why not? It is my
opinion that this is an important facet of the new law. It doesn't
require government spending and it imposes a degree of prudence on both the
insurer and the insured. It encourages both the buyer and the seller to
respect one another because both have a stake in managing the flow of resources
to their mutual benefit.
I didn't make
this up
I came to know this
because I mistakenly opened a piece of mail that was addressed to my son.
It came to him from the insurance company that has the health care
account at his work. It was an eye-opener for me. I wanted to blame
people for not making it known more clearly as it was all developing, but as
you can see, it is not an easy practice to explain in a 15 second sound bite.
It is not an easy concept to teach to people. It is an entirely new
concept of how people can manage their health care expenses. Some of you
remember the Health Maintenance Organization (HMO) concept from the past.
It didn't work because there was no significant tangible economic incentive
attached to it. It made it too easy to access the primary care physician
for "wellness" visits. Now, under this concept, the incentive
is to care for yourself by staying away from the health care system by living
under a healthier personal discipline. I think that this is a good idea.
What we need now is for people to understand it and get on board.
Once we get this under control, then we can attack the immorality of
massively expensive prescription drugs. A strong single payer system
would go a long way toward solving that problem. We've got three systems
going already. Just make them all one.
