By Jonathan Edelheit

I think one of the problems we are facing with the declining health of Americans is that we are trying to tackle the problem on too large of a basis; a macro level, when we should be focusing on a micro level. I think some insurance companies or employers think we can significantly change the way employees think, act and behave, and so we try to implement large programs to encourage these monumental changes. The truth of the reality is that we need to think small, atfirst. We need to get individuals to want to change, and it doesn’t need to be a big step. Even a little step, can be like a ripple in a pond that has much larger implications, because once an individual takes that small step and wants to become healthy, a true transformation will happen. As an industry, we need to focus on where motivation lies at the core of the employees.

Our challenge is truly the fact of that matter that we are all busy in our daily work lives and caught up with family at home. In today’s culture, it can be overwhelming to fully engage in a healthy lifestyle. Between the constant distractions on TV, unhealthy food everywhere, and the fact walking has become an art form and we simply drive from place to pace, it can be a true challenge to eat right and find time to exercise.

Here’s a thought- Let’s stop focusing on saying that we want employees to “engage” in healthy behavior, and instead, focus on motivating employees to want to engage in one simple, healthy behavior. If employees set an attainable goal, one that makes them feel better about themselves when they take action, they will strive to achieve even more. Once we can accomplish this, only then can we get employees to engage in an overall healthier lifestyle.

The 2nd National Healthcare Reform Conference™ announces Dr. Cecil Wilson, President of American Medical Association as a Key Speaker for the conference, taking place October 26-28, 2011 in Chicago at the Marriott Renaissance Schaumburg Convention Center Hotel. The 2nd National Healthcare Reform Conference™ is focused on bringing together up to 500 healthcare leaders to the conference, but because of high demand upon announcing the conference we expect the conference’s registration to possibly increase and be sold out at up to 2,000 attendees. http://healthcarereformconference.com
The National Healthcare Reform Conference™ is committed to bringing in the leading expert speakers from the US Government, Insurance Companies, Employers, and Leading Legal Experts to explain what healthcare reform really means. Those involved in healthcare and health insurance need to come to the 2nd National Healthcare Reform Conference™ to learn the details behind healthcare reform and to learn from their colleagues in the industry how they plan to address the sweeping change of healthcare reform.
The National Healthcare Reform Conference is the official conference of the Healthcare Reform Magazine, www.HealthcareReformMagazine.com. The Magazine was created as a main source of information for employers, consultants and health insurance agents to learn more about the Healthcare Reform and to provide a central point of communication for an emerging multi-billion dollar industry. To date, there is not a single dedicated magazine or conference for this industry. The Magazine’s primary focus is to provide employers and agents a source for all of today’s current issues surrounding the Healthcare Reform that is available entirely on-line.
The National Healthcare Reform Conference is also a part of the Employer Healthcare Congress which will feature a shared exhibit hall with 4 individual conferences –the National Healthcare Reform Conference, the Corporate Wellness Conference, the Voluntary Benefits & Limited Medical Conference, and the Self Funding Employer Healthcare & Workers Compensation Conference.

Health policy is one of the few areas of human experience where someone can come up with a catch phrase and have others repeat it again and again as though they were saying something profound. (A children’s playground is another place where this happens.)

Today’s catch phrase: We need to start purchasing quality, not quantity.

Unless you spend a lot of time at conferences where health policy wonks mainly talk to each other, I bet you didn’t even realize this was a problem. When you get a flu shot, do you search out providers who will give you the most injections for the same copayment? Don’t we all?… Oops, I guess not. More likely, you search out a doctor or nurse who will give you the right serum with the least amount of pain. If so, hooray for you! You’re already choosing quality over quantity.

If you needed a knee replacement, a colonoscopy or an MRI scan, would you search around for providers who offer two procedures for the price of one? Or would you try to find a provider who would do the procedure only once, the right way, with no mistakes? If the latter, then rest assured. You’re not the cause of our problems.

But, then, who is?

The Problem. The real problem in our health care system is not that people are choosing quantity over quality. Or quality over quantity. Or any combination of the two.

As I explained in my last Health Alert, our problem is that we have smart people and dumb payment systems. The smart people are the patients and the doctors — each pursuing his own self-interest. The dumb payment systems are the reimbursement formulas of the large, bureaucratic, impersonal third-party payers.

Although in popular lore, the big insurance company is the abuser of the hapless patient or the conscientious doctor, the truth is much more often the other way around. Doctors and patients are more likely to outsmart and abuse the insurance companies.

The abuse occurs because everyone faces perverse incentives. Patients with first dollar coverage have an incentive to consume health care until its value approaches zero. Or, until it approaches the value of the time it takes to get the care. Patients aren’t ignoring value. Quite the contrary. They are seeking out care until the value equals the marginal cost of care to them.

On the provider side, the perverse incentive is to maximize against reimbursement formulas. For example, if the formula pays for office visits, but doesn’t pay for phone calls or e-mail, doctors will schedule lots of office visits and avoid phone calls and e-mail. This isn’t an issue of quantity versus quality; it’s an issue of doing what you get paid to do. (Don’t most people in the world get paid to do what they do?)

The Wrong Solution. The solution embedded in the Affordable Care Act (ACA) will make the incentives even more perverse than they now are. Patients will have even more first dollar coverage for all manner of preventive care. They will respond by trying to obtain more pap smears, more mammograms, more colonoscopies, etc., that they probably don’t need and wouldn’t obtain if they had to pay with their own money. Never mind that we have nowhere near the supply of medical personnel that meet this surge in demand. In the very act of trying, they will waste resources, drive up costs and crowd out patients with more legitimate medical needs. And because there is no copayment or deductible, patients will have no incentive to seek out cost-effective care — say, at walk-in clinics.

On the provider side, reimbursement formulas will intrude even more into the decisions doctors make. Even so, I’ll put my money on the doctors. They will figure out how to game the system, no matter how much planning the bean counters devote to it. If all else fails, the doctors will buy computer programs that tell them how to maximize income under the next set of rules. On the surface, these initiatives appear to many to represent radical change. In fact, this approach is largely a continuation of what has been going on in Medicare for the past two decades.

The Right Solution. As we have said many times at this blog, in every health care market where third-party payers are nowhere to be found, we don’t have a problem of value purchasing. Cosmetic surgery, Lasik surgery, walk-in clinics, surgi-centers, specialty phone and email doctor services, concierge doctors, international medical tourism — you name it. Wherever providers must compete on price, they almost always compete on quality as well.

Of course, we can’t get rid of health insurance entirely, and that shouldn’t be our goal anyway. But as we have explained before, insurance need not prevent patients from making marginal decisions and it need not prevent providers from competing for patients on price and quality.

About the Author
John C. Goodman is president and CEO and Kellye Wright Fellow at the National Center for Policy Analysis. He is widely known as the “Father of Health Savings Accounts.”

http://healthblog.ncpa.org/value-purchasing/?utm_source=newsletter&utm_medium=email&utm_campaign=HA#more-14901

If you were to experience a hospital stay, would you want a private room? Cable TV? Gourmet choices on your dinner menu? A couch or second bed for a loved one? And would you insist on a doctor as your primary caregiver, rather than a nurse?

Or would you be willing to give up these amenities in return for a less costly experience?

What brings this to mind are some charts at Austin Frakt’s blog — showing international comparisons of the costs of common procedures. For example, the chart below suggests that we spend a lot more than other countries for normal baby delivery. In fact, we’re paying about two to three times the developed country average.
About the Author
John C. Goodman is president and CEO and Kellye Wright Fellow at the National Center for Policy Analysis. He is widely known as the “Father of Health Savings Accounts.”

Austin then delivers the coup des gras: In addition to all this extra spending, we also have higher infant and maternal mortality rates than everybody else.
But if you are willing to forgo what I am calling the “amenities” of care, you can have a baby delivered in the U.S. for less than the OECD average. And if you stick with the prenatal regime, your expected infant mortality will be below the OECD average. Details below the fold.

As readers of this blog know, we have been critical of international cost comparisons that show we spend more and get less. The reasons are: (1) normal market forces have been so completely suppressed in health care all over the developed world, that spending data in no way reflects the true costs of resources used; (2) making the data even more suspect, other countries do more than we do to shift costs and disguise costs; (3) if you count up real inputs — doctors, nurses, hospital beds, etc., per capita — we arguably spend less than the OECD average; and (4) such outcome measures as life expectancy and mortality compare our heterogeneous population with the homogenous populations of Europe, instead of comparing Europeans with Americans of European descent.
There are two other points we have previously made that are also worth reiteration: (1) with respect to real resource use, there is nothing other countries are doing that we Americans cannot do on our own; and (2) far from needing government help, if we want to copy methods of other countries, we mainly need government to get out of the way.
All that said, one of the things I (and others) generally ignore is the role, importance and cost of amenities. This is a mistake. In a system in which the money price of care is basically zero and there is excess capacity, there is nothing left for providers to do but compete on amenities!
Okay, time to fulfill my previous promise. Here is something from our book, Handbook on State Health Care Reform:
Parkland Memorial Hospital in Dallas…delivers 16,000 babies a year — more than any other hospital in the nation. Almost all the mothers are uninsured. The vast majority are Hispanic (82 percent) and illegal (70 percent). By almost any definition, these mothers are “at risk.” But among those who take advantage of Parkland’s prenatal program (more than 90 percent), the infant mortality rate is only half the national average. How does Parkland do it? By being very good at what they do. Despite being a publicly funded health delivery system, Parkland operates what Regina Herzlinger, of Harvard University, has described in other contexts as a “focused factory.” They are so good at delivering babies, they produce an annually updated, internationally praised textbook on how to deliver babies, and their methods are being copied in Britain and other countries.
However, Parkland’s methods will not satisfy everybody. Prenatal care is delivered in clinics staffed by nurses, not doctors. Hospital deliveries are usually executed by midwives rather than OBGYNs. And like public hospitals in Toronto and London, Parkland is perpetually overcrowded. In fact it is not unusual to find patients on beds in hallways.
Although Parkland is quite good at some things, it is not as good at others. As is the case with many other inner-city public hospitals, patients who do not face life-or-death emergencies can wait hours for care in Parkland’s emergency room. A migraine headache patient might wait all day. In fact, almost any nonemergency service involves inordinate waiting. Getting a refill on a phoned-in prescription, for example, can typically take three days. By contrast, Dallas-area Walgreens stores refill prescriptions in less than an hour and some Walgreens outlets will do it in the middle of the night.
So why not replicate Parkland’s baby delivery system all over the country? One thing standing in the way is government. If all of Parkland’s 16,000 expectant mothers were enrolled in Medicaid or had private insurance, for example, much of what Parkland does might not be possible:
Prenatal care delivered by nurses rather than doctors might not be allowed under many states’ Medicaid rules. Ditto for deliveries performed by midwives. And under typical state insurance regulations, patients with private coverage would be encouraged to see OBGYNs (because of zero patient cost sharing), where the cost would be higher and the overall quality of the pregnancy/delivery episode might not be as good (because of fragmented care).

Wow — what an election! What does it mean for health care? Almost every Republican and quite a few Democrats ran against ObamaCare in yesterday’s elections. Can it be repealed?
Outright repeal and nothing else will probably be stopped in the Senate; and, barring that, will undoubtedly face President Obama’s veto pen. But that’s not what the public is ultimately asking for anyway. Polls show that voters want health reform. They just don’t like the reform they got last spring.
As I explained at Kaiser Health News the other day, in thinking about what can be done, it’s helpful to review who won and lost under the Affordable Care Act (ACA). The big winners under the bill passed last spring are most (but certainly not all) of the 32 million newly insured plus some people with high health care costs. Let’s generously peg that at 50 million. The other 250 million are going to lose more than they gain. That’s right. For every winner, there are five losers.

About the Author
John C. Goodman is president and CEO and Kellye Wright Fellow at the National Center for Policy Analysis. He is widely known as the “Father of Health Savings Accounts.”

If Republicans and moderate Democrats assert their will, the former group will almost certainly get less and the latter will get more. A numbers game will not be enough, however. To be successful, the second round of reform will have to solve some of the most important problems of ordinary citizens. Problems that ObamaCare does not solve. I believe that means making health insurance portable, affordable and fair.

Portable Insurance. If you took a poll, I believe you would find that the single biggest problem most nonelderly Americans have is lack of portability. If they get laid off, if they quit their job or just retire, they lose their health insurance. If you believe that problem is solved with a health insurance exchange coupled with government subsidies and community-rated premiums, take a look at Massachusetts. If you lose your BlueCross group plan and buy subsidized insurance in the Massachusetts health insurance exchange, you will get insurance that pays doctors little better than Medicaid rates. You’ll move from the head of the waiting lines to the rear. And in the not-too-distant future, you will probably be forced into a very restrictive HMO (called an Accountable Care Organization).

Not what you had in mind? Here’s a better solution.

In most states it is currently illegal for employers to buy individually-owned insurance for their employees with untaxed dollars. They can buy BlueCross group insurance, but not BlueCross individual insurance — even though the insurance may be just as good and has the added advantage of being portable.

To solve this problem, we need to amend the federal law (ERISA/HIPAA) to allow portability nationwide. (See my own suggestion for four steps to portability at the state level.) Note: This proposal would not require employers to buy portable insurance for their employees; it would only allow them to do so.

Affordable Health Insurance. Did you notice the other day that McDonald’s is thinking about ending its insurance for about 30,000 low-wage employees? I suspect Burger King, KFC, Wendy’s and every other fast food restaurant chain will quickly follow suit.
The problem here is best summarized in Barack Obama’s own words. During the Democratic presidential primary, he said to Hillary Clinton, “You want to force people to buy something they cannot afford and then fine them when they don’t buy it.” Ten-dollar-an-hour employees and their employers cannot afford insurance that costs more than $5,000 for individuals and more than $12,000 for families. ObamaCare really is an eat-your-spinach reform for these employees and their families. It offers only mandates and fines. There are no new subsidies!

A similar observation applies to the millions of baby boomers who will retire before they become eligible for Medicare. ObamaCare’s minimum-benefit mandates will make their insurance more expensive than it would have been. Further, above-average-income retirees will get very little help from government if they buy the required insurance in a health insurance exchange and they will face a hefty fine if they don’t buy it.

Even employees who think they have postretirement benefits from an employer may face an unpleasant surprise. The 3M corporation just announced it will be ending its coverage for its retirees and sending them instead to the health insurance exchange.

The answer to these problems is to completely drop the idea of individual and employer mandates and offer reasonable tax relief to people to buy reasonable coverage. But for this approach to work, we must (a) live within our means and (b) deal with everyone fairly.

Fair Health Insurance. We will never get sensible health reform without a leader who levels with the public about the economics of health care. For starters, the public needs to be told that the federal government cannot afford to buy every family (not on Medicare or Medicaid) an insurance plan whose annual premium is $12,000 or more.

What we have to do is take the tax subsidies already in the system and add to them whatever taxpayers are willing to pay and call it a day. Let’s put that number at $3,000 for an adult and $7,500 for a family. Conceivably, one could give more to lower-income families and less to higher-income ones. But in health care, legislators are so quick to abandon any defensible allocation principle, I think the best policy is to provide the same subsidy for everyone.

Instead of the arbitrary, unfair and regressive tax subsidies that pervade the current system as well as ObamaCare, every single adult should get a refundable health insurance tax credit of $3,000. Every family should get $7,500. And that’s that. (On how to do this, see my original Health Affairs article with Mark Pauly and my summary of the Coburn/McCain approach.) Individual choice and market competition are going to have to find ways to make do with those limited subsidies.

What about pre-existing conditions? President Obama and the Democratic leadership in Congress have blurred the distinction between people who are uninsured through no fault of their own and people who are willfully uninsured. We can have a workable system in which people who are continuously insured do not lose access to the system merely because they retire or lose their jobs. (I have previously summarized one approach to workable insurance reform.) However, we cannot allow people to game the system by opting not to be insured while healthy (and thus consuming all their income) and then insuring at the rates everyone else pays after they get sick. Such gaming is already threatening the Massachusetts health plan.

Here is what is most interesting about all of this. In solving the problems of ordinary Americans we can go a long way toward cleaning up and fixing the Rube Goldberg contraption commonly called ObamaCare. In helping middle-class voters we can, at the same time, also help everybody else.

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Tags: email, Health Care Costs, ObamaCare
Suppose the Republicans win back the House of Representatives in tomorrow’s election. What will they do about health care?

We’re 10 years into the future and you have terminal cancer. Still, all is not lost.

Employer provided health insurance and employee benefits face tremendous challenges in the future as the cost of insurance increases. Employers fight off the economic recession to deal with changes to healthcare under the recently passed healthcare reform bill. These challenges were shared and solutions were discussed at the 2ndAnnual Employer Healthcare Congress in Los Angeles, California September 20th-22nd, 2010. Conference attendees were extremely pleased with the wide range of networking opportunities presented to them, and benefited from the collaboration amongtheir peers and experts in this field.

The Employer Healthcare Congress is one of the largest US healthcare conferences in the country, with over 1,000 delegates attending this year. The three day congress is made up of 4 cutting edge and innovative conferences: Corporate Wellness Conference, Voluntary Benefits and Limited Medical Conference, Self Funding Employer Healthcare and Workers Compensation Conference and the National Healthcare Reform Conference. The conferences focus on employers and also the agents, brokers and consultants that advise employers, and insurance companies. Although the four conferences had unique agendas, they all shared a common goal of discussing how employer healthcare can be more efficient and effective for those involved in the field, shared networking and shared exhibition.

Some of the latest advances in the fields were brought to light through informative sessions with esteemed speakers. Some of featured speakers this year that addressed the attendees were Brady Jensen, Group Manager, Global Benefits, Microsoft Corporation, Dr. Joseph P. Annis, Secretary, Board of Trustees, American Medical Association and Vicki Robinson, Manager, Insurance Services Division, City of Las Vegas. The speakers were able to discuss the benefits and challenges of funding healthcare plans, developments since the national healthcare reform passed and how to bring down the escalating cost of healthcare for employees.

QUOTES HERE FROM ATTENDEES

The conferences also provided plenty of opportunity to engage in intense networking sessions. Attendees were able to network and benchmark with individuals in private corporations, government officials and potential vendors. This Employer Healthcare Congress is the only US healthcare conference to implement proprietary networking software that allows attendees to pre-schedule up to 50 private one-on-one meetings at the conference to maximize attendees’ time and increase their opportunities for new business opportunities and partnerships. Jonathan Edelheit, CEO of the Employer Healthcare Congress—organizer of the congress, described the appeal of the new software,

“This special software allows you to maximize your time at the Employer Healthcare Congress which will thereforecapitalize on yournetworking and business opportunities. I believe our conference attendees definitely benefited from this system as it allowed them to have one-on-one networking sessions with key industry players and to accomplish in three days what may take individuals a year or more to accomplish. Next year we will implement a newly customized networking software which will make it easier for attendees to select and schedule meetings, based upon the feedback we received from this year’s event.”

On the whole, the three day congress was hailed a resonating success with those involved. The organizers were thrilled to accomplish all their planned initiatives and goals of providing excellent networking opportunities and an educational platform to discuss and share ideas. Attendees were pleased with the formal and informal sessions of communicating with their peers and experts in the field, and to learn about the advances in the healthcare sector. Many attendees also expressed their keen interest in attending the conference next year. The 3rd annual Employer Healthcare Congress will take place in Chicago, Illinois, USA on October 26th-28th 2011 and preparations to make the congress bigger and better than ever are already in place.

For More Information, Please Contact
Jonathan Edelheit
President – Employer Healthcare Congress
jon@employerhealthcarecongress.com
US 561-204-3676

With the huge success of the first annual National Healthcare Reform Conference, one can only imagine how great the 2nd one will be! Well…save the date!!
October 26-28, 2011 in Chicago, IL will be the location of the second annual National Healthcare Reform Conference.

2010 brought in over 1000 attendees, 130 exhibitors, 100 speakers and 1000 network meetings! This number is expected to double for 2011.

“The Employer Healthcare Congress’s Employer VIP Program allowed me to get up to the minute information on the ever changing Healthcare Reform and helped me to effectively communicate the immediate changes that would be impacting my employees as well as coordinating with other key departments for planning next year’s budget. I would not have been able to attend without the VIP program and I am grateful for the opportunity and feel it was time well spent”. Lori Stewart, Corporate Benefit Administrator for LMI Aerospace in St.Charles, Missouri.

Lori was one of almost 100 employers who benefited from the National Healthcare Reform Conference’s Employer V.I.P program. The Employer VIP Pass will be for up to 200 employers in 2011; a predetermined number of discount registrations, free registrations, hotel room nights, and flights to those who complete the VIP Employer Pass application.

“With all the changes set forth once the healthcare reform bill was signed March 23rd by President Obama, there was a need for a large conference of this type to take place. And we needed to create and plan the conference in a timely manner so that everyone who had questions and concerns could convene in Los Angeles to find out how they needed to comply to these new rules and regulations. This was why we put our heads together and decided to create the VIP program for the National Healthcare Reform Conference.” Said Maureen Ross, Conference Manager, National Healthcare Reform Conference.

“Employers and other Industry players can also benefit from reading the Healthcare Reform Magazine, the largest online magazine of its kind where important topics are covered on a monthly basis at no investment to the subscriber. And if that isn’t enough, we also have created a social network site that is dedicated only to healthcare reform topics. I encourage everyone to join in the discussions.” Continued Maureen.

2011 is approaching quickly. Mark this one in your calendar. This will be a must attend event.
For more information, please contact:
Maureen Ross, Assistant Editor
Healthcare Reform Magazine
maureen@healthcarereformmagazine.com
561-204-3676

Middle-class families need health insurance to protect themselves from the financial devastation of a catastrophic illness. But many (arguably, almost all) of the most serious defects of the health care system are created by third-party payment of medical bills.

So a natural question is: Can we get the benefits of insurance without the harmful effects of third-party payment? The other day at this blog, reader complaints about third-party payment prompted Uwe Reinhardt to proffer a full-throated defense of health insurance to which I replied, why must the two be linked?

There is a huge difference between insurance and third party payment of medical expenses. I have life insurance. But when I die, the insurer is not going to pay for my autopsy, my cremation, the urn that will hold my ashes, or the cost of the plane need to sprinkle my ashes over the Princeton University football field (or some other suitable place). Instead, my wife will get a check.

Interestingly, before the current era, the most common form of health insurance — other than Blue Cross plans — was indemnity insurance with a fee schedule. A typical benefit consisted of so many dollars a day for each day in the hospital. Since the benefit was independent of what hospitals actually charged, this type of health insurance did not interfere with the ordinary workings of the hospital marketplace.

Can we replicate that idea in a way that meets the financial and health needs in the modern era? I think we can.

In thinking about how to design a radically different type of insurance we have to come to grips with two principles that seem to invariably clash:

Principle One: Efficient, high quality health care requires that providers compete for patients on the basis of price and quality and that will not happen unless patients can unilaterally decide how their health dollars are spent.

Principle Two: Since all third-party insurance involves a pooling of resources, the more discretion individuals have to unilaterally draw from the pool, the more wasteful and costly the insurance will be.

Let’s briefly review why these principles are so important.

Evidence for Principle One. As we have consistently pointed out at this blog, wherever third-party payers are not, medical markets work reasonably well. For example:

In the market for cosmetic surgery providers compete for patients based on price; the result: transparent, package prices that have actually come down by 44% over the past decade.
In the market for LASIK surgery, price and quality competition are the norm, package prices and transparency are routine and real prices have barely changed over the past decade, despite considerable innovation in corrective eye surgery techniques.
Walk-in clinics, originally designed for patients paying out of pocket, post their prices, deliver high quality care, maintain records electronically and can prescribe electronically.
Concierge doctors typically communicate with their patients by telephone and e-mail, maintain electronic medical records; prescribe electronically and help their patients negotiate for specialist care and expensive tests.
In the international medical tourism market, which was initially all based on out-of-pocket payment, there is price and quality competition with package prices and quality data often made available online.
The evidence is so overwhelming that competitive markets in health care in the absence of third-party payment work and work well that one wonders why it is that virtually the entire health policy community is so oblivious to that fact.

Evidence for Principle Two. The evidence for the second proposition is the current state of the health care system. To keep costs from exploding, insurers impose a list of services they will pay for (CPT codes) and negotiate with providers over the fee for each of them. Yet, any system that pays by task (1) will always leave important items off the list (e.g., telephone, e-mail, patient education, etc.) and prevent doctors from repackaging and repricing their services to meet patient needs; (2) will give incentives to providers to maximize against reimbursement formulas rather than maximize the wellbeing of patients and (3) because medicine is so complex, will still leave doctors and patients with enormous discretion over resources leading to wide variations in spending as is revealed, for example, in the Dartmouth Atlas studies.

So how do we get around these seemingly irreconcilable principles?

Solution One: Use Self Insurance Wherever Possible. Self insurance, say, through a health savings account (HSA) is always preferable to third-party insurance wherever (1) the medical event is non-risky or (2) the price of third-party insurance is high and (3) the exercise of individual choice creates no serious externalities for the others in the insurance pool. As I argued in “Designing Ideal Health Insurance,” people should self insure for almost all primary care, almost all diagnostic tests and even most emergency room care.

Solution Two: Adopt the Casualty Model for Most Expensive Medical Care. For bypass surgery, a hip or knee replacement and many other routine, but expensive, procedures, health insurance could emulate the kind of insurance most people have for their homes and automobiles. As I explained in “Designing Ideal Health Insurance,” the insurance plan might commit a sum of money (say the expected cost at an efficient center-of-excellence facility) and let the patient have the choice of providers and facilities — paying additional sums from an HSA.

Solution Three: Combine Self-Insurance, Casualty Insurance and Supplemental Insurance for End-of-Life Care. Many of the headline-grabbing examples of denial of care in Britain concern expensive drugs that promise only months of additional life. Yet even in the United States, two people with the same cancer conditions might end up spending vastly different sums.

Why not have a basic insurance plan which pays for a very conservative approach to end-of-life care? People who want more aggressive care could buy supplemental insurance. Self insurance could also play a role — providing extra funding, for example, for the very different approach offered by Cancer Treatment Centers of America.

Notice that in this brief outline, we have had no need to introduce deductibles or copayments or CPT codes or many other dubious features of the current health insurance system.
About the Author
John C. Goodman is president and CEO and Kellye Wright Fellow at the National Center for Policy Analysis. He is widely known as the “Father of Health Savings Accounts.”