Healthcare! With an immodest proposal for REALLY fixing it.

Now that the lies are done being told, what have we got?

In political terms, we have goodies that will be apparent before the next Congressional election and costs that won’t be apparent until after the next Presidential election.  I wonder how that happened.

I believe the Republicans are wrong about the political unpopularity of this bill.  I might go so far as to say that they are not wrong about it, but, rather, were lying about it in the hopes of spooking some conservative Dems.  It takes a certain amount of Chutzpah to lie to people about how bad a bill is and then cite their credulity as evidence that the bill is unpopular.  But that’s pretty much what the Republicans did, I think.  And now they will be whipsawed by the timing of the benefits and the costs.

Not that the Democrats earned any points for candor.  They railed about special interests fighting the bill, all the while kowtowing to Big Labor and the Plaintiffs’ bar.  They demonized insurance companies for having the temerity to refuse to sell health insurance to people who are already sick.  (Ask anyone if an insurance company to which they pay premiums should be required to sell insurance to people who are already sick, and they’ll shout “Hell, no.”  But ask them what they think about those dastardly pre-existing conditions clauses, and see how well they’ve been lied to.)

But enough politics.  There’s still an exploding usage problem, and we need to do something about it.  Of course, there’s only one way to make universal healthcare work: doctors in the aggregate have to make less money.  The mechanism whereby that happens has to be that the profession gets paid for keeping people well rather than for curing them when they get sick.  Unfortunately, under our hyper-specialized system, we cannot pay surgeons to practice preventive care.  Making this omelet is going to require breaking a lot of eggs!

One way to reduce what doctors make as a group is to increase what family practitioners make as individuals.  If my doctor could earn a million dollars a year by knocking a couple hundred thousand off the income of ten or twenty surgeons, that would be a net win for the system.  I don’t know if that calculation makes any practical sense, but I know the math works.  But that research has been done, and it seems clear that more of at least some types of preventive care – and especially lifestyle fixes that cost very little – would save a lot.

The missing ingredient from the current system is an economic incentive for people to take care of themselves.  The new law requires coverage of preventive care, and it may even require that it be provided without deductible or co-pay.  But I think it stops short: a patient’s co-pays for treatment should be higher if he or she has not undergone the free preventive care provided by his insurer.  (It’s odd how being healthy is not its own reward.  We can’t be sure that an ounce of prevention will be worth a pound of cure.  Some folks hear their wallets better than they hear their better judgment.) 

It might be a good idea to enlist the family practitioners in the effort by changing their incentives, too.  Those docs should be rewarded if their patients file fewer claims for treatment.  If we’re going to pay family practice guys more and surgeons less, then let’s pay the family practice guys out of the money that we don’t spend on surgery.  Seems like a no-brainer.

But what’s the mechanism for creating these incentives?  Suppose every employee in a company were enrolled automatically in a healthcare cost reduction plan.  The company’s baseline healthcare costs would be established as a bogey for the plan.  To the extent that the company’s overall costs for a year are less than expected, a percentage of the savings would be shared with employees whose claims were less than their premiums.   (The formula is a detail.  Any scheme that pays out net savings to those who take care of themselves  - and maybe to their family practitioners - ought to work.)

It’s not hard to create incentives for preventive care and healthy lifestyles.  Employers just need to want to do it.  I say “employers” because insurers have no incentive to reduce costs.  Reducing costs reduces premiums, which, absent aggressive price competition reduces profits.  Maybe that’s the sense in which a public option would “keep insurance companies honest.”  But I believe that task should fall to employers, who, so far, simply have not put their minds to it.  Some “promote” wellness, but few if any reward it with hard dollars.  And I don’t know of any that pays family practitioners for keeping their patients well.  That seems so obvious a place to go.  Oh, well.