How to revamp health care reimbursements

 

Employers and Unions

Group Plans

Group purchasing of health insurance will no longer be legal. Employers and Unions who wish to continue to contribute to the cost of health insurance can supply tax deductible payments to the employee who in turn uses the money (tax free) for the purchase of insurance plans. If an employee wishes to purchase additional coverage he can do so with pretax dollars.

Individuals

Individuals and families receive tax deductions for the purchase of their insurance.

 

Insurance Companies

Geography

Since the cost of health care varies from area to area a consortium of health insurance companies and the government will define geographic pricing areas. Each area will have a factor that is multiplied by a base unit cost for insurance. Adjacent geographic areas will vary by no more than 1% and changes in the area will be reviewed every 5 years.

Age

Since the cost of health care varies by age, the price of insurance will change based on actuarial data. Age groups will be defined consistently for all carriers and prices cannot vary by more than 5% in adjacent age groups. Age groups should be grouped as follows:

Birth – 2 years old

2 – 10

10 – 18

18 – 35

35 – 40

40 – 45

45 – 50

50 – 55

55 – 60

60 – 65

65 – 70

70 – 75

etc.

Plan Type

People have various needs and situations so the plan type may vary according to specific economic situations. Differences in the plans may only be in the following aspects.

  • Percentage of the co-payment (Never less than 70 and never more than 85)
  • Amount of the deductible (Never less than $100.00 and can be any amount up to 10% of the individuals income.)
  • Out of pocket cap. This amount can never exceed 20% of an individuals income but can be any amount.

Each insurance will device formula to account for each of these variables in the price so any person can figure out pricing for themselves.

Individuals may change their plan type on a yearly basis without penalty.

Loyalty pricing may be instituted for people who remain with a particular plan. But this pricing must be set so insurance rates either do not rise or rises slowly as the individual ages.

Individuals new to the insurance rolls may be penalized for pre-existing illnesses for a period of up to one-year. After this period the person is considered insured and all insurance companies must insure them at the prevailing rates.

Individuals who participate in unhealthy habits (smoking, drugs, alcohol, etc.) may also be penalized by the insurance in terms of pricing by adding a factor to the premium, depending on the unhealthy habit.

Proof of the unhealthy habit must be acquired by blood or urine testing or by admission of the insured before the penalty is imposed.

Insurance companies may request repeated tests or questionnaires (at their expense) but no less often than once/year to continue to monitor the insured for the development of these habits. The insured who are penalized can request repeat testing as well in order to demonstrate they have stopped the unhealthy habit.

Published Pricing

All insurance companies will publish their pricing structure (at their cost and administered by the government) so that anyone can gain access to the information in the library, from their insurance agent or any other form of mass media. Individuals may purchase these books at a price set by the government agency administering the book. The book is to be published yearly so prices can change on a yearly basis.

Published Credentials

All insurance companies will publish their financial situations and number of years in the health insurance market at their expense. This information will be available to all concerned with their pricing structure.

Tax Incentives

Insurance companies may at their option set up free clinics, medication dispensing centers, mobile health units and/or education services. The government will provide tax incentives for these mechanisms.

Allowing anyone to see a physician at one of these institutions and promoting health education will lower their costs in the aggregate. Coupled with the tax incentives the insurance company will be benefited financially for setting up these free institutions.

 

Providers

Service Price

All providers will publish their pricing structure (at their cost and administered by the government) so that anyone can gain access to the information in the library, from their insurance agent or any other form of mass media. Individuals may purchase these books at a price set by the government agency administering the book. The book is to be published yearly so prices can change on a yearly basis.

Since there are too many providers to put all this information in one book, the information is to be divided among different provider types (e.g. physicians, hospitals, Physical Therapy Units, etc.).

Published Credentials

In the same book all providers will delineate their credentials. The information will contain the providers year of birth, training location and periods, board certification, years in practice, sex, languages spoken and a brief narrative explaining their practice.

Tax Deductions/Credits

Physicians: All physicians must participate in a free clinic for at least 4 hours per week. In exchange the physician may take a tax deduction for this time and earn CME (Continuing Medical Education) credits. In addition, if they care for patients in their office or as an emergency and do not charge them if they are not insured they receive a tax deduction for that care. The amount of the deduction should equal some percentage of their published fees.

Hospitals: All hospitals must create free clinics as part of their accreditation. Supplies for the clinic are to be donated by suppliers they normally pay for supplies purchased for insured patients.

Ancillary Medical Care: These are laboratories, physical therapists, etc. They too must participate in the care of the poor by opening their doors to a certain percentage of poor patients. In exchange they will be entitled to tax deductions for a percentage of their usual fees.

Suppliers, pharmaceuticals, durable medical equipment, etc.: These services will also be required to donate a certain percentage of their supplies for the care of the poor. They too will receive a tax deduction for a percentage of their usual fee for their supplies. Facilities that purchase from these suppliers who care for the poor will order their supplies for the poor at no charge from these companies.

 

Medical Suppliers to Providers

Service Price

All companies selling either services or products to providers must also publish their pricing structure (at their cost and administered by the government) so that anyone can gain access to the information in the library or any other form of mass media. Individuals (providers) may purchase these books at a price set by the government agency administering the book. The book is to be published yearly so prices can change on a yearly basis.

Published Credentials

Each company selling services and products to providers must also delineate their company in the book as well. These books will serve as a catalog of products and services to the medical community.

Government

Maintain Price Books

Government will set up and maintain the publishing of all books for the dissemination of pricing and credentials. The cost of this task will be borne by both the insurance companies and medical providers.

Administrate Payments and billing to Insurance

Government will set up receiving centers for the receipt of all standard medical claims from providers, determine if the patient is insured and make immediate payment of the claim. In turn the government will submit the claim to the insurance company for reimbursement. The insurance will in turn bill the recipient based on the patients plan type. The cost of administering these government clearing houses will be paid by withholding a percentage of the claim paid to the provider and a percentage will be added to the insurance companies claim in a 50:50 arrangement.

To cover the governments advanced payments of the claims all insurance will deposit a certain amount of money equal to its number of lives covered or its claims experience (which ever is lower).

Dispute Resolution

Since all claims are paid without regard to medical necessity or price, disputes should be minimal. However, there must be a mechanism for both insurance and patients to redress complaints since they are ultimately paying the bill.

For complaints made by Insurance Company against a provider (usually involving medical necessity) the Insurance may make an appeal of a service or service(s). The Insurance Company must pay the cost of the mechanism (as determined by the governmental body). The provider in question must turn over all documentary evidence concerning the claim to the government body who will at random supply these records to three independent physicians or providers (of the same specialty) in another location. A simple majority will determine who is correct. If the insurance wins the dispute, the physician returns the money collected for the service. If the physician wins there is no exchange of moneys. If the Physician wins on a regular basis against the same insurance company the insurance company will start having to pay the physician a penalty amount that rises over time. If a provider routinely loses to an insurance company he/she will at first have to pay for the dispute resolution then pay a penalty amount to the insurance. (This will prevent either from abusing one another)

For complaints made by the patient against the provider (usually involving fees) the patient may request a mediation by the government agency at no charge. Since the fee schedule for the provider is published it should be an easy matter to determine if the fees charged were correct and therefore the amount billed by the insurance appropriate.

If it is found the patient is incorrect no further action is taken. If a particular patient consistently complains without basis he/she will have to start paying for the resolution process and if it unfounded complaints continues the penalty will grow higher and higher.

If the patient is correct, the insurance company must reimburse the patient and pay for the resolution process. If a particular provider is found to be in the wrong on a consistent basis he/she will have to pay higher and higher penalties.

 

For complaints made by the patient against the insurance company (usually involving fees charged by the insurance for the patients co-pay, deductible and up to the out of pocket cap) the patient may request a mediation by the government agency at no charge. Since all the information is published concerning the fees in questions, it is simply a matter of checking the patient's plan and what is required to pay back to the insurance.

As in the other resolution mechanisms, if one party is found to be consistently wrong they will be required to pay higher and higher penalties to the government agency.

 

 

Other methods to get costs down:

Malpractice

It seems clear that malpractice law suits has little to do with errors and omissions and serves only to make it difficult for patients to be compensated for wrongs and usually only helps the lawyers make a lot of money.

In addition, fear of malpractice by the medical community has created a system where extra tests and procedures are routinely performed that are not really necessary.

The simple solution to this problem is to remove the incentive for making money and replace it with a system that weeds out the providers that commit true malpractice and really compensate those who are injured by mistakes, omissions and just bad luck.

The system must be fair to all parties involved and must reflect some measurable phenomena.

Our view is to remove the legal system from the process and replace it with a fund, paid into by providers and insurance companies, and administered by the government. If a patient or family complains that there is malpractice or there is an adverse event a complaint can be lodged to this agency. The agency will in turn request the appropriate information from the providers involved.

The government agency will randomly select 5 providers (of the same specialty) in a different location and 6 (non-medical) government officials. Each will review all information presented and listen to the patient or his representative describe the problem and listen to the providers involved to hear their side. If a majority of the 11 providers and officials find in favor of the patient then an amount of money is used to pay for the patient's medical problem resulting from the adverse outcome.

The patient’s case must be reviewed by the same panel (on a frequency determined by the panel) to see if continued payments are required. If the patient’s adverse effect is resolved then he/she stops receiving funds.

In addition to determining if the patient is entitled to moneys from the fund the panel will also determine if the providers had committed malpractice. If the determination is simply an adverse outcome then there is no further action. If the panel rules malpractice was committed they will determine the penalty. Penalties can range from monetary (the provider must pay the government agency a penalty fee) to loss of license. First offenses (depending on the severity) should be dealt with monetary penalty and recurrent offences require re-education, suspension or even loss of license.

Patient education

One of the best ways to get medical costs down is to educate patients about prevention. All players in the medical community including the government needs to play an active part in this process.

Education mechamisms should be put in place at all free clinics, mailings, outreach programs and through advertising.

 Outreach Programs

 Poor communities receive less preventive medical care than wealthier communities. This is due to a combination of lack of funds and lack of education. In order to reduce the cost of health care to these communities patient's need to be educated and given easy access to health services.

 

To accomplish this task, hospitals, insurance plans and others will set up mobile health care units to go into these neighborhoods and seek out patients. For-profit organizations will receive a tax incentive for this service and tax-free organizations will be required to set up these services in addition to their free clinics.

Auto Insurance

Injuries in automobile accidents are generally paid for by automobile insurance. As a result, automobile insurance companies routinely try to avoid their responsibility and patients attempt to gain payment from auto insurance when non-automobile medical problems are really the cause. In the end, in many cases, the insured and the provider and either not reimbursed or there are long delays in reimbursement. Many patients opt to wait for medical care if there is no or a delayed reimbursement.

We would suggest eliminating auto insurance from paying any medical service and allow normal health insurance pay for all medical problems and injury resulting from auto accidents. Not only will this reduce the cost of a huge bureaucracy, but more importantly it will encourage patients to seek out medical care in a timely manner and prevent further cost in the care of inured patients.

Since the patient involved still has to pay deductible and co-payments they can still use the legal system to recoup these amounts as well as lost income and other monetary losses through the legal system or other mechanism.

Disability Insurance

As above injuries occurring on the job are subjective and cannot be proved in many cases leaving the patient without coverage or with delayed coverage in many circumstances. We propose the same mechanism for these injuries as in Auto Insurance.

   

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