Virtually
every other developed country has a single payer system. Everyone is covered,
medical outcomes are at least as good as ours, and it costs per capita half of
what we spend. Those who wish to tweak the current system or introduce things
like medical savings accounts are traveling in uncharted waters with four
decades of mostly failure as a legacy to build on.
That
said, if we are to have a single payer system what should it look like? The
following is my proposal for such a system, which restructures what we have and
would, by design, bring our health care cost into line with other developed
countries within a decade.
In
1992 the then commissioner of education for Rhode Island Peter McWalter
proposed what he called the Guaranteed Student Entitlement. In the program the cost of a solid education
for each student would be determined.
This would cover basic subjects, electives, arts, and physical
education. The state would guarantee
that each student would have this amount spent on him or her throughout the
state. Recognizing that there are
students with special need, these students would get an additional stipend
above the initial base stipend. At the
time the base stipend was approximately $7000 and additional funding of $1500
went to students who were either low income or had English as a second
language. They would get $3000 if they
were identified with a learning disability.
Using this program as a model I would propose a Guaranteed Healthcare Entitlement as a
comprehensive plan for the complete overhaul of the American health care
system.
Coverage: The government will pay a provider group the
insurance premium for everyone living in America. The coverage will be for a level of service,
which most everyone would recognize as complete coverage. This would include office visits, tests and
procedures, hospitalization, prescription drug plan, and mental health. There may be nominal co-pays as out of pocket
expense.
The premium: This would be determined based on the
actuarial risk of the patient. The
government might pay $1000/year for a healthy 20-year-old male and $25,000 for
a blind diabetic on dialysis.
However,
the average premium payment would be about $10,200/year. In addition and most
importantly this average reimbursement would not increase until we moved to
some fixed percentage of the industrialized per capita mean (mean plus 5-10%
for instance). The cost of health care would be fixed for at least a decade. Up
front then the government would know their annual healthcare costs would be $3.3
trillion which is what we currently spend on health care. Thus, like the GSE,
the GHE would vary the payment for the enrollee based on their projected needs.
However, despite the fact that the payments would be much more variable because
the projected needs would be much more variable, the national annual cost would
be known and fixed.
Cost containment: Such a system would cost essentially the same
as it is now which is still twice what other countries pay. However, we would come into line with other
countries over time simply by not increasing the premium. Initially there would be a health care
bonanza for providers. This would give
provider groups time to adapt to the new healthcare order. However, for all the
reasons that the cost of health care goes up, provider groups would have to
find more and more efficient ways to provide for their patients. Once we reached our target health care costs (some
percent of the OECD mean) the cost of health care could go up at the rate of
that target rate.
An additional source of savings would be to allow the
federal government to negotiate drug prices.
We are paying the bill. If we
realized the saving that other developed countries do with this kind of policy
we could expect an immediate saving of $130 billion annually[1].
As an offset to the drug makers, the government can help streamline bringing
new drugs to market and help fund research as ways of helping such companies to
continue to produce new products.
Such
a plan would, in a finite and relatively predictable period of time, bring our
health care cost in line with other developed countries. In doing so, it would
go a long way toward allaying the anxieties that individuals, businesses, and
government all feel about the cost of our medical industrial complex.
