Insurance Academy

Fix the Broken Healthcare System

By | November 6, 2019

It’s November and while I have many reasons to be full of joy this time of year, there are still two events that reduce my joy. In fact, one of them makes me downright upset.

The first cannot be helped. It’s a part of the cycle of life. The end of October marks the end of the baseball season with all of its highs and low. Even though the team of my youth didn’t accomplish their task for the season, they placed respectfully and now I am forced to like the Astros almost less than I like the Red Sox. The end of the baseball season officially marks the beginning of the long dark night of winter.

The second event also cannot be helped, but that’s just because it is a part of the system that we have made for ourselves. Maybe it would be better to say that our forebears made it for us and pass it down to us. I’m speaking of the annual rite of passage we call “Open Enrollment.” It’s the time of year when we wring our hands over rate increases and slog through benefit summaries and cost estimates. It’s when I am forced again to handle the societal football of health care and wonder if we’ll ever get clear of this system.

Healthcare is the one service that people use where we don’t shop for providers. We go to our family doctor, or the nearest healthcare facility (or the best one we can find) and we don’t ask what this will cost. We simply demand service; the price be hanged. Then we complain when the bill comes, no matter how much our health coverage company paid or how much the provider wrote off. We have this idea that we have a right to Ruth’s Chris health care at a dollar menu price.

The current health care system in the United States is broken. None of the proposals that politicians are putting forth are any better.

I do not want healthcare the way it is.

What we have now is a mix of pre-paid healthcare and cost sharing. You pay the premiums for your health coverage every paycheck. For that, you get some benefits for free. All of your preventative appointments and tests are covered. We used to call them our annual physicals. Now they’re called well-person exams. Whatever.

For the rest of your medical care throughout the year, your doctors have signed agreements with the different health coverage companies. Those companies agree to pay your doctor an agreed upon fee, no matter what she thinks she should get for the service. The rest is written off and you pay a share, whether that’s your deductible, a copay, or a coinsurance amount.

There is a segment of society that cannot afford their coverage. I know young families that can afford their rent or health coverage, but not both. There are many in our society that simply cannot afford to pay for healthcare. I’ve been there. I can remember a hospital stay that I paid for over more than a year. For those who cannot afford healthcare, our government has set up a system where we the people subsidize part of the costs of their health care.

I do not want any form of socialized healthcare.

While we do have a socialized healthcare system already, there are still choices. I can go to any doctor. I can buy any health coverage that’s available. The only limit I have is what I can afford. In a socialized system, the direct and immediate costs of healthcare go away. So do the consequences of the medical false alarm.

When the customer has no financial consequences, every sniffle, ache, or cough turns into a visit to the doctor, especially when children are concerned. I saw this firsthand when I was in the Army. We had a medical clinic when my family and I were stationed at Fort Drum, NY. The clinic was a primary care center for the entire family and because it was run by the Army, it didn’t cost us anything to go there.

Imagine that you’re a young mother or father and your spouse is deployed overseas, and one of your three children is sick. You don’t know anyone because you’re living 500 miles from where you grew up. In those days, you couldn’t just call mom on your cell phone. You had to pay for a long-distance call. The solution was to go to the free clinic that you could drive to without leaving the post. That meant that the clinic was always full.

If you had an appointment, you could almost guarantee that you would be seen about an hour after your appointment time. If you were a walk in, you could just plan to spend the bulk of the day there. If the little one got sick after hours, you could always walk into the emergency room and then everyone gets to spend the night there. That’s the result of socialized medicine.

I want the market to truly drive healthcare.

Imagine this with me. When you choose your doctor, you get to compare her rates for services with the rates of other doctors in the area. Doctors are rated on criteria, such as price, manner, accuracy, and speed of service. You know what it will cost up front. In fact, one of the doctors in your neighborhood offers a membership where you get so many visits and tests in a year.

People get sick and people have accidents. That’s what you buy medical insurance for. It’s one of those things where you pay a premium for some time and if a covered event happens, it pays for it. If there’s a cancer diagnosis, there’s coverage. If the kidneys shut down, there’s coverage.

I know what you’re thinking. What about those that cannot afford their healthcare? That’s a good question. Since everyone else is paying market rates for their doctors’ visits, let individual doctors (either voluntarily or not) set up sliding scales based on financial need. They could even be required to take a certain percentage of patients that cannot pay full price.

When it comes to major medical needs, they may not be able to afford a standard medical insurance policy. For those cases, we could establish a residual market for those who need insurance but cannot obtain it due to financial hardship.

There’s another topic in this area that demands attention. What about people with chronic issues? That’s a little harder to tackle. People with chronic issues have years of expenses ahead when those issues come up. Sometimes when an issue comes up suddenly, or emergently, it can become a chronic issue. A chronic issue means repeat doctor visits with specialists, prescriptions for new medications, tests repeated cyclically, and complications. Those all mean mounting expenses.

The truth is that I haven’t thought that topic through all the way. These expenses could start under cover for the major medical expenses and transition to a subscription model where visits, prescriptions, and tests through the specialists are all covered.

I’m sure that someone will tell me all of the problems with this plan. I know that there are things that I haven’t thought of. I also know that you used to be able to pay your doctor and I’ve seen some places where doctors have operated under a membership model. I’ve also heard of the old major medical insurance plans. Sometimes we don’t need a new idea. We just need to go back to an old idea that worked.

PS – Don’t forget to review your health coverage during open enrollment.

About Patrick Wraight

Patrick Wraight, CIC, CRM, AU, is director of Insurance Journal's Academy of Insurance. He can be reached at pwraight@ijacademy.com.

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