- You don’t get cost control without putting the consumer’s greed in play. The best way to do this is with HSA’s. You put away money, the government incents you to do so by making it a tax-free retirement account, and whatever’s there at age 65 you get to keep when you go on Medicare. People self-ration because they’d like to make a buck.
- The only problem with (1) is that HSA’s don’t work well for low income (who don’t have money to put away) and the chronically ill (whose $$$ requirements outstrip most of their incomes). The governments needs to generously accelerate the HSA’s for those two groups with matching funds.
- You’re not going to be able to fund those matches in (2) without a broad-based income tax increase that hits the middle class, or a payroll tax increase. Neither party yet has had the conjones to mention that. The Democrats pretend it can all be funded by increasing taxes on the rich; the GOP pretends it can all be funded by increasing taxes on nobody at all. Both parties are delusional.
- Increase the financial incentives for doctors to join broader “medical homes”, and increase the incentives for hospital and clinic networks to become “medical homes”. This eliminates many of the inefficiencies previously discussed due to “handoffs” and redundant testing. Kaiser has a good model, Cleveland Clinic has a good model, regional city-based carriers like Kelsey-Seybold in Houston have good models, where they simply employ the doctors and compensate them on salary+bonus plans.
- Tell the American people sorry, but we need to go back to gatekeeper models, despite the fact we don’t like them. The gatekeeper model, where the GP or internist must authorize you to see the specialist, is one of the best known methods of controlling costs and cutting out waste in the health care system, and potentially dropping premiums. It is a method frequently used in the universal systems in other countries, in one form or another.
- The government should adjust patent law to allow drug companies longer periods of time to recoup R&D expenses. Today, the patent protection “clock” on a new drug starts on filing; it takes years to bring the drug to market, forcing the company to turn a profit on the drug in only a few short years before generics can start to produce it, thus jacking up the prices. So, start the patent protection clock on first marketing, and those costs can then be spread out over time.
- (Here’s the Big Government Intervention one I hate but we need). Because of 6 (to an extent) drug companies jack up the price of commonly used items to compensate for losses elsewhere. This makes being a diabetic, for example, a very very VERY expensive proposition. Fixing (6) would remove some of this pressure, but simply put, a bottle of insulin that costs $4 to produce cannot continue to be sold for $400. If fixing the system doesn’t address that, somebody’s got to.
- Universal care systems ration end of life treatment, because it is so costly. We have called that approach “death panels” and we don’t like them. But EOL costs nonetheless need to be controlled for the broader system to work (this is really a Medicare issue, but it ricochets through the entire network). Today, the doctor will keep treating you until you’re a corpse. Rather than blatantly withhold EOL care based on stats (which is how other systems do it) we should disincent patients to seek inadvisable EOL treatments through EOL counseling and a graduated phaseout of insurance payments for those inadvisable treatments.
That’s a start.