Three steps toward a better healthcare system

A friend recently asked me, Where do we go from here? The friend was referring to our impasse with healthcare in America. The Democrats have failed to repair the Affordable Care Act, and the Republicans have failed to repeal or replace it.

With the status quo, I can understand our healthcare system providing lower quality care compared to its counterpart industrialized nations. I can even tolerate lack of access to healthcare to millions of uninsured Americans. However, what is not acceptable and a path toward disaster for our health system and for the national economy and even American supremacy in the world is the unbridled cost of healthcare.

In healthcare today, insurance and pharmaceutical companies, as well as providers including many hospitals and doctors, continue to make a profit and allow for significant waste in the unsustainable financial status quo.

We spend nearly $10,000 annually per person in the U.S. on health care. That is nearly one of five dollars of our gross domestic product. The most concerning is that nearly every year the rate of increase of health care expenditure is significantly higher than the rate of inflation. It is only a matter of time until our small businesses and large corporations will buckle under the cost of providing healthcare to their employees.

In my conversation with my friend, after rehashing the dismal scenario of our healthcare system, I shared my hopes and dreams of where our health system can go. The ideas are half-baked but I hope its a good start.

A revolutionary transformation in our healthcare system would have some element of these three core structural and process ideas:

First, we should consider not a single provider health system, meaning a government-owned and operated system such as the Veterans Administration, but a single-payer health system, similar to Medicare. A single provider means all the hospitals and doctors and nurses are employed by the government which can be overarching, unfeasible, unacceptable or even inefficient. However, in a single payer system, the government pays doctors and hospitals for healthcare based on what is affordable and reasonable. It is a system which many of the industrialized nations have today. In essence, a single payer would relieve employers and businesses of the burden of providing health insurance.

Second, we should begin to accept a two-tier healthcare system. One basic health system can provide essential emergency and non-emergency coverage. The basic government program, such as a less expensive version of Medicare or Medicaid, can be available to all. The second tier would be for those who can afford more coverage and who buy additional insurance through private companies. The idea is that basic needs are provided for by collective tax dollars; however, if individuals want to have additional benefits such as non-generic medicines or access to a greater number of specialists then they would have to pay more.

Lastly, we should make the Department of Health and Human Services an independent, nonpolitical, federal agency, much like the Federal Reserve. This independent agency may negotiate drug prices with pharmaceutical companies or determine premium rates charged by insurance companies, much like the Federal Reserve determines the supply of money and setting of interest rates. The agency would allocate our health resources based on what is affordable, without the label of rationing, by balancing the minimum benefits to the needs of the people and the budget of the government. If used efficiently, our present health budget is more than sufficient to provide adequate healthcare to all Americans. (Other industrialized nations expend half as much per person and have better health outcomes.)

Such a radical transformation will not be acceptable to many. It would limit expenditures and reallocate money from multiple payers and middle-men insurance companies, pharmaceutical suppliers, hospitals and doctors. There would be many losers in the healthcare industry, but the winners would be the majority of patients.

Such disruptive changes redistribute power over healthcare. Congress and the President have the power to decide health policy. Our experience has shown us that once in office, politicians are beholden to lobbyists and special interests. An independent chair of the healthcare agency, much like the chair of the Federal Reserve, would work in the best interests of the people and the national economy.

It will take decades to implement meaningful change, yet we need to begin the conversation about viable healthcare options. I told my friend, If we are to reconstruct our healthcare system we must fundamentally transform how we allocate money and power in healthcare. Otherwise, we are only shuffling the chairs on the Titanic.