Tuesday, August 11, 2009

My Freedom Based Vision for Health Care Reform

My Freedom Based Vision of Health Care
I would like to offer my vision for American health care for the 21st century. This vision statement is not a specific policy recommendation. It is a vision of what the world could be like after a series of incremental changes. I present my vision first because it is essential, in the current health care debate, that we have a common vision before we argue about specifics. I occasionally make mention of specific policy changes in order to persuade you that the vision is realistic. But keep your eyes on the big picture and see if you don't agree that this is a world that you'd want to live in.

My vision of health care is guided by some core principles: I believe in charity and sacrifice by those blessed with more, but I also think people should lie in the bed they make for themselves. I believe in free choice. I believe that the United States has been the beacon of freedom to the world, and that it needs to remain so.


My Vision
I envision a health care system where people choose their doctor and pay their doctor much in the same way that we choose our barber or our mechanic. People would save for health care the same way they save for home or car repairs. They would budget for it and it would be their choice where to go and how much to spend. Prices would be just as transparent as they are at the local department store. And the less fortunate would have no need of insurance because society would provide free care the same way we provide Section 8 or food stamps (no mansion, and no fillet mignon but you do get what you need)

Health care would be often be delivered at home. I'd have phone and email access to my doctor. Nurses would be allowed to do more. The licensing system for medical professionals would allow for much greater latitude in the use of physicians assistants (PA). These PA's would roam the cities to deliver in-home care at hours that are convenient for their customers. People would rarely visit the hospital. Broken leg? A PA would drop by (much like a plumber drops by for emergencies). They would be licensed to perform all manner of outpatient care. Self-blood draws and self-measurement would be the commonplace. Nobody would trudge into the doctor's office just to have their throat cultured. Everyone would have health appliances that can send vitals electronically to their doctor. An additional tier of prescription drugs would be created that would allow some drugs to be prescribed by a pharmacist (Electronic medical records would be an enabler for this.) More drugs would be available over-the-counter.

My medical records would be available instantly from a medical record provider of my choice. Standards bodies (much like the ones that govern the Internet) would ensure portability of records to any service provider. Privacy laws would be enforced to ensure my data remains private.

An aside on a new personal health paradigm: The CEO of Intel, Paul Otellini recently wrote of an entirely new paradigm in health care. Please read his views on a paradigm of personal health at Politico. You see, instead of copying France or Canada, the United States should lead.

Employers
Just as people are free to choose their doctors, they would be free to choose the funding model. No longer would employers be selecting insurance providers. In fact, the tax incentives that force employers to provide insurance would have been abolished. In lieu of health insurance, employers would have increased the salaries of the employees and gotten out of the health business. If the health of employees was important, they could require yearly physicals much like they do in the Armed Services. But they wouldn't be choosing how health care is delivered to their employees. No more worrying about losing health care because you lost or changed your job! (To get there, we need to tax employer health benefits and move the tax relief directly to individuals).

My Vision on Insurance
People would carry only catastrophic health insurance. This is much like how we use home insurance to cover unforeseen events. Home insurance premiums would sky rocket if we expected insurance companies to clean our bathrooms and replace our worn carpets.

The health of society would be measured by whether people receive care or not (the number of insured wouldn't matter). Most people would buy insurance. Some people would choose not to have insurance. In my vision of health care, these people would still receive the health care they desire and can afford. Most health care will be so affordable, it will be paid for out-of-pocket (and with tax credits) If they really can't afford it, they can receive charitable care, which I talk about below.

A word about genetics. In my vision, genetic information would be strictly guarded as a private information. Insurance companies would be prohibited from requiring genetic tests. But, as now, they would be able to ask about lifestyles, habits, and past health history.

A word about pre-existing conditions. If someone waits until their house burns down to get home insurance, it is too late. It would be down right nonsense to require an insurance company to take on a customer that will be a guaranteed liability from day one. Insurance wasn't invented to take care of people. It was invented to enable people to have peace of mind while they buy homes and have children during their prime working years. If you didn't buy this peace of mind, you will need to rely on charity, as I describe below.

My Vision of Charity:
Local and state governments would provide free access to student hospitals and clinics. The care in these hospitals would be rationed the same way it is in Canada. The difference being that, had they chosen to insure themselves, they would not be receiving rationed care. (In Canada you have no choice but to receive rationed care). And unlike Canada, the indigent care would be funded to a high degree by philanthropists, organizations like the United Way, and by state and local taxes. It is a fallacy that only the federal government is rich enough to help the poor. Several states refused New Deal handouts during the Great Depression and took care of their poor quite well. The funding of these clinics, in principle, would not come from the federal government. However, because the Supreme Court has already broadened the General Welfare clause, I would be swimming against the current to deny any role for the federal government. We would continue to provide Medicare-like services for the elderly. The federal government would be allowed to fund student and research hospitals which provide free care as long as it can be shown that the expenditures fell evenly across the states in proportion to their populations. Such federal expenditures would be modest in comparison to the size of the health care economy. In my ideal world, a constitutional amendment would have restricted all "General Welfare" expenditures of the federal government to be 10% of GDP or less.

Under my vision, every American would receive basic health care. Those who choose to provide for themselves will receive the best and most timely health care. We cannot turn our backs on the principle of the harvest. People must reap what they sow. If you didn't plan ahead, you will be cared for, but it will be Canadian style, and prompt delivery cannot be guaranteed. And your doctor will probably be less experienced. But look at it this way, those who receive free care are providing a service to society by helping doctors gain experience.

Cheap Health Care
In my vision of health care, we would honor contract law. Contracts that cap liability would be enforced. People would be free to undergo experimental treatments. The FDA would provide an experimental tier of drug availability. Doctors would guarantee their work, much like a roof contractor guarantees a new roof. Now, obviously, they can't insure every procedure will be successful. But they can guarantee specific treatments by providing free follow-ups and/or money-back if the customer is not satisfied. And because everyone is paying for their care in much the same way they pay their mechanic, costs will be driven way down for any treatments that enjoy economy of scale. (Think Brakes Plus, Midas Muffler, or Pep Boys.) And don't under estimate how cheap care would be if we allowed more in-home care as I mentioned above.

My Vision of Honoring the Constitution
In my ideal world, all law would have to be accompanied by a statement of constitutionality. People would honor the spirit, not just the letter of the the Constitution. The distribution of government from federal, to state, to county, to city would look more like a uniform rectangle rather than an inverted triangle.

The Constitution does not enumerate the power to manage health care. (Please read the 10th amendment in the Bill or Rights.) It does allow taxation and court precedent does allow spending on the "General Welfare". But the spirit of the law is that the federal government does not micromanage the affairs of the people.

Health care services arise from the fruits of someone's labor. Health care is no more a right than dental care, automotive service, or housing. That the government might decide to bestow services to the needy does not make it a fundamental right. Constitution guarantees equal rights, not equal things. Rights have to do with free agency, not with the receipt of goods and services.

A word about Social Security:
In my opinion, Social Security violates the spirit of the Constitution. However, it was found to be constitutional by the 1937 Supreme Court. The old-age portion of SS won assent by 7/2 vote and the unemployment portion squeaked through on a 5/4 vote. Some historians speculate that Justice Owens, the swing voter, was influenced by FDR's court packing scheme. So we now have a legacy in which the "General Welfare" clause of the Constitution can allow the federal government to justify almost any spending. But this does not nullify the spirit of the law.

And what if it can be shown that spending detracts from the General Welfare? If so, it is unconstitutional by any standard. Today, we have unfunded liabilities that if not fixed will eventually bankrupt social security. The 1937 supreme court approved a system that was self-funded. Today it is pay-as-you-go and is producing a huge generational transfer of wealth. The program has led to an unquenchable appetite for pork barrel spending. With 70 years of hindsight, we can definitely see that the program has exceeded James Madison's worst nightmares. What they needed in 1937 was a stimulus program with a sunset. That would have promoted the general welfare in a time of need and then returned the country back to the normal balance of power.

In my vision, two amendments to the Constitution would be enacted. The first, (as mentioned above) would keep "general welfare" spending to less than 10% of GDP unless temporarily overridden by a 3/4 vote. The second would be a balanced budget amendment (again with a 3/4 vote override provision).

Summary
In short, in my vision, freedom of choice is preserved while still guaranteeing help to those in need. I have no illusions about my vision being a panacea. It is just a vision. If only 80% of it were realized, we'd be the envy of the world. It would take a lot of work. As affluent as we are, we'd probably still pay 16% of GDP on health care but it would be by choice. And the rewards would be spread evenly across all people in a way that balances choice, accountability, and charity. Above all, this vision honors the spirit of the Constitution and preserves the principles of freedom which have blessed all of humanity.

Our Best Hope
The best legislation that I have seen to-date is The Patient's Choice Act. I don't understand why this Act isn't being discussed more actively. I know the President would be reluctant to give credit to two Republicans, but this bill addresses the insurance problem while providing a universal solution! He could claim victory at getting everyone covered and receive the bipartisan support which he claimed he would strive for.

12 comments:

Shanna said...

Nate, I can tell you put a lot of thought into your post. I think your vision is very interesting and could possibly work. It would take a lot of major changes and a lot of time to switch too. A few questions: what about lower-income patients that have cancer and need treatment? What about infertility and adoption costs?
THanks for sharing your ideas!
-Shanna

nathan3700 said...

Shanna,
The low-income patients with cancer would go to a regional hospital operated by a charity or the government (mostly state government) and receive free care after waiting in line. These hospitals might charge a fee based on ability to pay. Basically, they'd receive care similar to Canada or other single payer countries. In Argentina they had such hospitals. (I waited in line my self once...and gave up after waiting all day.) Only people without catastrophic insurance would receive this lower quality of care. But keep in mind, catastrophic insurance purchased at a young age would be affordable much like group life insurance. And, like life insurance, the longer you live, the likelihood of payout goes up. So rates go up. That is life.

Cancer is like getting hit by a car. It is catastrophic and unforeseen. Having a baby on the other hand is like remodeling your house. It is planned and should be budgeted for. But keep in mind, employers would have given you at least a 10% pay increase because they no longer have to provide you health insurance. And keep in mind that under my vision having a baby wouldn't cost as much. Today a baby is 5k. Under my vision it would be 2k. (I'm not sure if adoptions would get cheaper.) You'd pay for it with pre-tax dollars. You might have a health savings account. However you pay for it, it is your personal decision. If you wanted to buy gold plated insurance that covered infertility, you could. The extra take home pay would enable you. Having an emergency come up during delivery...that would fall back into the purview of catastrophic insurance.

In all likelihood, we'd probably build off of the current High Deductible Health Plan with Health Savings Account that we already have (if you're lucky enough to have an employer that offers it....see why I'm so hung up on getting employers out of the picture!)

Jeff said...

Nathan,

This is a great blog piece - maybe the best I have read including Wall Street Journal op-ed pieces. I agree that calling something a "right" is ridiculous - such as a right to oil changes, filet mignon or golf - as you point out. The food stamp model is a good one - if people can't provide for themselves, they have charity and get the bare minimum. Otherwise, people save to buy food from an infinite array of providers, and choice and markets ensure they are served.

The Canadian/U.K. model is not one that Americans want, based on the outcry at town meetings hosted by Congress. There, if you need a hip replacement, you get put on a waiting list - or travel to the U.S. for immediate surgery if you could afford it. Sure, health care is "free", just like all Communist countries had cars and jobs. However, the car was a Trabant (Communist-made) - not a Ford, BMW or Toyota - and the job was a make work job in a small, inefficient economy. In addition, there was no choice, or freedom, in the system. I don't think Americans voted for this model in the past two elections.

The Democrats' health care plan is really about nationalizing an enormous chunk of the economy and making the federal government omnipresent in ordinary life. If you want the Post Office or DMV delivering your health care, you probably like this model. However, President Obama is dancing around this issue by saying that if you like your current plan, you get to keep it. Never mind the fact that few employers would continue to offer their plans once they are crowded out by the public option. Or that innovation will disappear from the U.S. market, as private firms will not invest money in new technologies which cannot make a competitive return due to government rationing and price controls.

You also point out the impending bankruptcy of the enormous entitlements created during the New Deal and expanded during the 1960's Great Society program. Medicare, Medicaid and Social Security will be insolvent shortly with a growing number of aging beneficiaries, and a smaller number of taxpayers to support them. While the demographics were favorable these programs were untouchable, the "third rail" of American politics which politicians refused to touch. These programs will not exist in their current state when we retire in 25 years - the IOU you receive from the Social Security Administration is just that. This train wreck is being ignored by the political class, but the bills will come due – and many will never be paid. American taxpayers simply can’t afford yet another open-ended, chronically underfunded entitlement.

Although the Republicans appear to be shell-shocked from the 2006 and 2008 elections, this government-created health care and entitlement debacle presents an enormous opportunity. They face a President who ran as a post-partisan/moderate despite his voting record as a U.S. Senator, which was the most liberal in the senate - more liberal than Ted Kennedy, Patrick Leahy or Russ Feingold. There are over forty “blue dog” Democratic congressmen who were elected in districts where a majority of voters voted for John McCain in the 2008 presidential election. Moderate voters will abandon the Obama health care plan when given an alternative – including seniors who see the impact of the plan on their choices and quality of care. Republican challengers simply need to use the talking points in your superb post.

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.”
-Abraham Lincoln

Jeff

Sergey Solyanik said...

Heh heh :-)

> I believe that the United States has been the beacon of freedom to the world, and that it needs to remain so.

Dude, you should check out the history :-). US had slavery until 1865, segregation until 1960s, and didn't have women's suffrage until 1920 (did you know that Kyrgizstan has it since 1918?). Even the protections in Magna Carta has now been abolished in the US. The laurels you are resting upon have expired somewhere around early-to-mid 19th century.

What US has is economic, not political freedom. This is a huge difference: which one would you choose, your life or your wallet?

So let's not talk about freedom. Let's talk about basic morality:

http://www.independent.co.uk/opinion/commentators/mary-dejevsky/mary--dejevsky-a-mean-streak-in-the-us-mainstream-1776795.html

I think the problem we might be having in this country is that the dominant religion makes the following set of claims:
(1) Does not matter how evil you are, as long as you repent on your death bed, you will be "saved".
(2) Religion is the source of morality, therefore whatever your pastor is telling you is right: you do not apply your own judgement.

Given this, it is actually very easy to dispense with the moral imperative of helping people around you as long as not helping them might save you a few bucks in taxes.

This then leads to really bizzare consequences: we lose fewer than 10 people a year to terrorism, yet spend hundreds of billions of dollars to fight it. We lose 18000 people a year because of the lack of health insurance...

Unknown said...

Nathan,
I think we should do away with insurance all together. Have you ever noticed that when you have to get a new windshield in your car, the glass company asks you if you are paying for it or if your insurance company is? What should it matter? A piece of glass should cost the same no matter who pays for it. Have you noticed that if you pay for the windshield, the windshield generally cost about $175.00 and if you have your insurance pays for the windshield, it will cost about $800. Does this make any sense? This is what happens when insurance is involved. Things cost more. The windshield is not more expensive, but the company is going to have to add some for all the paperwork they will have to file to be reimbursed for the windshield. This alone is not enough to explain the cost difference. People just flat out charge more if they think deeper pockets are going to pay for the glass. That is what has happened to our healthcare. If there was not any insurance, you would shop around for the best medical opinion and advise. We would choose the doctor we feel most comfortable with. We would shop around pricing from different doctors offices just as you would a mechanic shop. You may have to lay out a bit on the Mastercard to get you buy, but hey, it is your body and health and it would be worth it. We would all grumble a bit just as we do when car problems set us back a bit financially. But hey, it is your body, it is worth it. This would drive the price of healthcare down dramaticly. I am amazed at those that think I should pay for their healthcare, while they spend their money on flat screen TVs, cell phones, BlackBerry devices, gaming systems, BlueRay Disk players, and nice cars. How about forcing everyone to prioritize their outlay of cash. I do not have one flat-screen TV, or a BlueRay player. I have to set some boundaries and priorities so I can survive rainy days. I do not have the money to buy all the toys, and then demand that someone else pay for my healthcare. I think the government should be responsible to educate the public on prioritizing the beer, smokes, toys, cars and healthcare. We should be able to choose which is most important to us and spend our money accordingly.

nathan3700 said...

Amen to what Scott said. That is exactly what I'm talking about when I hope for a catastrophic-only system of insurance.

nathan3700 said...

Sergey,
Even if the U.S. is no longer a beacon of freedom, I don't think it undermines my case on health care. It might undermine the use of the word "remain" in the phrase "it needs to remain so", but that is it. The U.S. Constitution inspired most every country on the planet. But, I will concede that the U.S. has lost its way in many respects beginning with the presidency of Woodrow Wilson.

But, I think you should check out history too:
> US had slavery until 1865
The very framing of this fact presupposes that the U.S. was founded as a single monolithic nation. You have improperly abolished the identity of "states" in the name "United States".
* Massachusetts abolished slavery in 1780
* Pennsylvania passed the "Act for Gradual Abolition of Slavery" in 1780
* Most other states above the Mason-Dixon line followed suit
* The U.S. is one of the few examples of an enslaving race giving up their lives in huge numbers to free the enslaved race. (One man died for every six slaves freed).

> didn't have women's suffrage until 1920 ... Kyrgyzstan has it since 1918
* The State of Wyoming has Kyrgyzstan beat, Women had suffrage in 1869
* State of Utah: 1870
* etc. etc.

I think your attempt at painting the U.S. with a wide brush as a backward country fails.

> What US has is economic, not political freedom
If you define political freedom as the right of the majority to infringe on the rights (economic or otherwise) of the minority, then you're right, we don't have as much of that by design. Otherwise, I have no idea what you mean. I'd rather have freedom than either my life or my wallet. That is why I fight against excessive centralization of power in the federal government.

On your comments about religion. I agree that the dominant religion needs reform. That is why I am committed to spreading the message of the Restored Church. I am a Mormon. You should look into it.
And I agree with you on your comments about terrorism. I saw the War on Terrorism more as an attempt at paternalistic imperialism rather than an attempt to minimize death due to terrorism. Results have varied and I concede it hasn't cracked up to what we hoped for...yet.

Sergey Solyanik said...

> I think your attempt at painting the U.S. with a wide brush as a backward country fails.
Hey, I was only reacting to your claim that US is the paragon of freedom. In reality, the statements should be reclassified as follows: "some areas in United States were often further along than many other countries" :-).

The reason US exceptionist movement is rubbing me against the fur is because it is so similar to communist propaganda that I so disliked in Soviet Union. Perceiving your country uncritically leads to arrogance. Arrogance leads to failure. And since the time moves very quickly these days, the downfall is also very quickly and painful. It took hundreds of years for the Roman Empire to fail; decades for the British Empire; years for the Soviet Empire and I guess about 8 years for the American as well.

The only question now is whether we abandon the imperial way and focus on making the citizen's life easier, jut like Europeans did, or we continue to pursue word dominance and then fail really badly.

http://img132.imageshack.us/img132/4967/outrageous.jpg

Your vision of healthcare is undermined largely by two things.

First, it's purely imaginary ("things should be... X", "People should be charitable..."). We happen to live in the real world where people, doctors, and insurance executives are what they are, not what you want them to be. We already have charity-funded health care, there's simply not enough of it.

Second, again, it lays claim to Us exceptionalism. ("We don't need no stinkin' EU/Canadian/everyone else's version of health care, we'll invent our own based on general expectations that things will just work out by the magic of market and human spirit"). But it just so happens that specifically in the US the human spirit does not seem to be particularly promising:
http://www.alternet.org/blogs/peek/142220/sarah_palin%27s_facebook_%27friends%27_celebrate_ted_kennedy%27s_death%3A_%22one_less_socialist%2C%22_%22good_riddens%22/

and, as I have already pointed out,

http://www.independent.co.uk/opinion/commentators/mary-dejevsky/mary--dejevsky-a-mean-streak-in-the-us-mainstream-1776795.html

Brian said...

Hi Nate this is your Bro. Brian. I have been thinking about this only a little. But I think that when it comes to healthcare maybe the government could setup a 'limited time only' government sponsored insurance entitity for the express purpose of introducing more competition. What do you think? After awhile the government would turn it into a private entity. We do have a healthcare problem and something needs to be done. What we need are new ideas, ideology can only go so far. Another idea would be to go ahead and conceed with the democrats on this point but make them compromise on another money saving idea to pay for the healthcare system. I.e. "Fair Tax Plan.

nathan3700 said...

Brian,
I like your idea of compromising with Democrats with either a "sunset" clause or with a bargaining chip like the FairTax. In fact, I was already mulling this over.

I think the best bargaining chip would be a balanced budget amendment. In fact, I think I could support the current HR3200 lock-stock-and-barrel IF it was tied to the passing of a balanced budget amendment. There is nothing like having to live within your means that can better force you to make tough choices of what you can afford.

I do however wish we could stop using the "insurance" paradigm. If the government provides subsidized health care, let's just call it that. I think "insurance" should always and ever just be a "peace of mind" service, not a health service.

nathan3700 said...

A friend recently sent me this article in the atlantic which I think arrives at all the same conclusions as I have made except he is more willing to "require" enrollment in catastrophic plans. I prefer to have a low-quality safety net for those who don't insure themselves. Other than that, I say Amen to this article.

Anonymous said...

In Britain we do have way more freedom than you believe you have as we can choose either free nhs healthcare or to go private. We believe you should have the choice.