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What about a Free Market Health Care System?

 

Shrink insurance and government down to size! Patient-centered medical care is possible.

By Dr. Larry Fedewa
The starting point for a discussion of a national health care system should be setting our goals.
American health care should be:
1. High quality, state-of-the-art
2. Available to all
3. Affordable
4. Abundant
5. Well-funded
What are the principal obstacles to these goals?
a.   The shortage of medical personnel. This shortage has two facets:
not enough medical professionals are produced in the first place, and too many drop out before their time.
There are whole areas of inner cities and rural America, for example, which have no physicians at all. Why? Because our medical schools do not graduate enough doctors to serve the population of the United States. Why not? Lack of intelligent students? Lack of students who are motivated to give their lives in service to their fellow man? Not at all.
The reason is lack of money! Medical education is so lengthy and so costly in this country    that very few students can afford to go to medical school. This situation has created a national crisis.
One very good use of taxpayer funds would be to offer medical and nursing school students free tuition, open to all qualified applicants. We do it for the military, why not for doctors and nurses? The cost would be miniscule compared to the Department of Defense or agricultural subsidies.
This policy would have a massive return on public investment. More doctors would increase coverage of the population (perhaps there should be a requirement for a graduate M.D. and R.N. to spend two years in a “no-doctor zone”). More doctors would increase competition for the patient dollar. More could devote themselves to research. New people, new ideas, new openness to change. The quality of care would go up, and the cost would go down – a mantra we have been hearing a lot lately.
This program would also assure continuing support for U.S. medical technology which is already the envy of the world.
b. Inadequate funding
So how do we provide for adequate funding? Where does the $3 trillion we now spend go? The money flow starts with the employers who pay the insurance companies out of profits. It then goes mainly to the vast bureaucracies in the insurance companies which distribute the money, the government which oversees the money, and the hospitals and practitioners who must respond to the companies and the government. Only about one-third of the $1 trillion spent on healthcare gets to the practitioners. So how can this labyrinth be simplified?
1)       First, take the employers out of the picture. The added financial and personnel burdens on businesses of paying and accounting for employee health care is a double disaster. It is a drag on the efficiency of the economic system by vastly increasing the cost of starting and staying in a business, and on the healthcare system by removing from individuals the responsibility of seeing to their own health needs.
2)      Next, reduce the role of insurance companies. They are not chartered or ordained by God to be judging the value or disvalue of medical procedures. They are supposed to know about money, not cancer! The decisions about medical care and the balancing for costs versus therapies should be in the hands of the patients where they belong. When the ultimate decisions of life and death have been left with the patient, we will have come a long way toward patient-centered medicine. Face it, there is no way for the patient to become the main arbiter of his or her fate unless the patient is the source of the money which runs the system.
3)      This free market system would be much better and much cheaper. The individual works for the money; the individual chooses the doctor, makes the final decision as to spending the money, and pays the doctor, hospital, physical therapist, and pharmacist. So where does the individual get the money? From his or her own health savings account with enhanced income from fewer deductions, also from voluntary insurance or cooperative membership, or from family, friends or philanthropic sources. Since the money is the patient’s own, the patient is far more likely to become very cost-conscious – unlike today’s insured patient, who is always spending someone else’s money.
c. Insurance Companies and Government
A patient-centered system also reduces the role of federal and state governments (46.9% of health expenditures, NCHS, 2016). The patient doesn’t need the insurance company or the government. If both the government and the insurance companies were completely eliminated from the system, about two-thirds of the cost of American health care would be gone. Of course, there will always be some need for both, so assume that half of that cost would be gone. At today’s rates, that would be about $1.5 trillion. This is a gross number, but it shows the potential.
1) There is still a place for insurance companies in this system, although dramatically reduced. The most obvious place is for catastrophic insurance. A safety net for when something very expensive happens to someone in the family – or the church, or the credit union, or whatever assembly of people the individual chooses to participate with.
And this brings us to the role of governments.
2) The first federal government act should be to lift all interstate commerce restrictions on insurance companies, so that they are free and invited to offer policies in any or all the states they wish without the necessity of creating a separate bureaucracy for every state they enter.
3) The second federal reform should be the creation of a program for financial aid to qualified students in the medical professions. My suggestion would be a free education in exchange for a period of service in underserved areas of practice as determined by a federal government body, such as, CDC or NIH or HHS.
4) A third federal reform which would dramatically reduce national health care costs is tort reform. Everyone makes mistakes, including medical practitioners and hospitals. It is the federal government’s role to protect both the treatment sector and the patient. But the current practice of unlimited liability has led to “defensive medicine,” that is, exhaustive tests and treatments used far beyond medical purposes. These extras are done to provide a defense against the inevitable lawsuit in case anything goes wrong. This uber caution has become a major cost driver in American medicine. Congress should set reasonable and realistic limits on the monies which can be given to the victims of everything from malfeasance to honest mistakes. No more windfalls for injury lawyers.
d. Universal Coverage
The larger issue is care for the poor and the other underserved members of our nation. The concept of universal care is a noble and worthwhile goal. But socialized medicine is not the only or even the best way to achieve universal care. We have government programs to feed the hungry; to provide health care for the elderly; to protect the innocent. We can provide health care access to the poor and the underserved, whether because of poverty or location. We can also do better than the COBRA coverage for those who lose their jobs, or those who are excluded because of pre-existing conditions.
It is very tempting to design a system in which no government plays a major role. However, the most efficient way to care for the poor would seem to be a State-run program which levies a small per capita fee on each pool of insured to be placed in a designated fund, administered by the State, for the benefit of qualified citizens. A model for such a program might be the Medicaid programs in each State. Another model is the Uninsured Driver programs administered by the states.
               e. Medicare
We have now discussed the entire healthcare cycle without mentioning Medicare. There is a moral and legal mandate involved in Medicare which does not exist elsewhere. Medicare works reasonably well as a medical insurance system for those who contributed to it all their working lives. The most prudent and honorable way to approach Medicare would seem to be to leave it alone for those to whom commitments were made, even while moving the system slowly toward a patient-centered system for those just starting out, with free choices developed for those in mid-career. The pressure of the free market system we have been describing here will undoubtedly alter and reform Medicare as the new system matures in due course.
So here is what a free market system might look like. It would fulfill all our goals for an American system that is:
1. State-of-the-art;
2. Available to all in need;
3. Affordable;
4. Abundant; and
5. Well-financed.
To get there, we need to:
1. increase the supply of medical practitioners,
2. create a patient-centered system by letting the patient spend his or her own money on healthcare;
3. create state-sponsored safety nets for the poor and underserved.
 
These proposals, of course, seem radical today, even in America’s free market culture. But sometimes the most obvious solution is indeed the best. The fact is that the employer-based system we have today was initiated because the elite of another day considered average Americans too irresponsible to handle their own health and welfare. Not true today.
© 2018 Richfield Press, LC (All rights Reserved.)

Keep Reading

Radical Reforms in Higher Education

By Lawrence J.   Fedewa (July 9, 2018)

This is the story of my 1970s experimental college.  The design and experience seem to be once again relevant and may contribute to to the current debate. In a word, I developed a college based on an individual curriculum for each student.

Even though I was the second youngest member of the faculty, I was appointed Dean of the College at a small private school near Kansas City, Missouri., which was starved for money, students and ideas. In an attempt to bolster our enrollment and our finances, I took a week away from the office to write a proposal for a federal grant.

The proposal turned out to be a design for a college radically different than any of us were used to. That was challenge enough, but the real challenges began when our proposal was funded with $1.2 million a year for three years!

We began by convincing a large local company, Hallmark Cards, to donate some space for a branch campus in their new downtown office buildings, which I then took over as President of the new campus. I started out alone in a big room with a fancy title, and a big budget. I had to find furniture, equipment, some staff, and some walls, But first came the real challenge namely, the curriculum itself.

First, I threw out the “Higher Education Owners’ Manual”, i.e. the rules and customs surrounding traditional higher education. In my proposal, I had specified that the new college be aimed at older students, preferably over 25 years of age. As Dean, I had watched so many students drop out of college that I wanted college to be available for them to come back to when they were ready.

There appeared to be two vital considerations which had been overlooked in the traditional college:

1.       Learning is a personal activity and should be student-centered, not structured for the convenience of the institution.

2.      Learning is not divided into pricing units, i.e. credits, and learning experiences cannot be properly measured or evaluated with such tools.

What is a college degree?

In order to build a new curriculum model, some definitions had to be refined. First, what is a college degree? The answer was that a college degree is a public declaration by a qualified faculty that a recognizable body of knowledge and skills has been attained by an individual. It is therefore essential that the faculty have sufficient experience of the person’s capabilities to enable a considered evaluation. A corollary is that every student must be enrolled for some period of observation in the same institution which is to grant the degree – no quickies.

What is meant by “student-centered?”

The next question was, What is meant by “student-centered?” I am a great believer in the value of motivation in the learning process. Thus, my logical question to the student was, “What would you like to know that you don’t know already? Since you have to be enrolled here anyway, why not use the time profitably?” This question was the first step toward the student’s academic plan, that is his or her personal curriculum. The academic plan consisted of three elements:

1.       “What is your learning goal?”

2.      “How much do you know now?” and

3.      “How can you make up the difference?”

The Portfolio Plan

Typically, each student needed some guidance in designing the academic plan. So, we assigned each to an academic counselor, or coach. We found that a good beginning was what we called the “Portfolio Plan.” The student was encouraged to construct a portfolio showing every formal learning experience he or she had had to that date. The student was required to include proof of anything that has ever been learned – including college transcripts, military courses, professional training, awards, jobs which demonstrated expertise, publications – everything. Some of the portfolios were enormous; we had to find extra storage while they were being evaluated. I am aware that “credit for experience” has become almost routine; but we were among the first to introduce this methodology. Our approach differed fundamentally from later programs in that we did not attempt to convert experience into college credits. The value of the experience was simply to validate the student’s answer to the question, “How much do you know now?” All inclusions had to be accepted by the Academic Counselor, and later by the Major Professor. In case of a dispute, the Academic Counsellor would act as the student advocate.

During the course of this exercise, many students began to discover their academic goals. They were encouraged to consider real life ambitions, and the results were unorthodox, but valid. Examples were: oral history, dance therapy, strategic (business) planning, and many others.

Academic Plans

The next step was the design of the curriculum to achieve the academic goal. At this point, a specialist in the general field of the proposed academic goal, whom we called the “Major Professor,” was introduced to the student. This was a member of the College faculty, typically a Ph.D. in the field. However, volunteers from the community were frequently necessary because of the unusual nature of the student’s chosen field of study. The Academic Advisor then took on additional duties as coordinator of the interactions between the student, the major professor and the expert mentor. Our experience was that these experts were all willing and excited to participate. As President of the new college, I personally recruited and briefed these distinguished individuals. I was never refused. Interestingly, even though we offered stipends, we never had to pay for their services. They universally found that they too were learning through this assignment.

The academic plans that evolved were very interesting. The oral historian was mentored by the Director of Oral History at the Truman Presidential Library in nearby Independence, Missouri. Dance therapy was co-invented by the student and the Chief of Psychiatry at the Menninger Clinic in Topeka, Kansas. The strategic planner was tutored by the top executive for research and planning at Hallmark Cards. These are only a few of the community experts who were enlisted to help our students.

The Thesis and Graduation

In order to ensure academic validity, the Major Professor met regularly with the student and occasionally with the outside mentor. The final product of the academic plan had to be written and documented in the manner of a thesis, based on the new expertise which had been gained through this experience. Finally, borrowing from a doctoral program, the student was required to present the thesis to a panel of senior professors, who read the thesis, and then discussed the work in open forum with the candidate. If the thesis and the interview (to ensure authorship) were satisfactory, the student was graduated with an appropriate degree. All of the graduates walked into new jobs or promotions based on their academic work.

This system was wildly successful. The very first seminar meeting for the program was designed for about 15 students. More than 100 showed up the first night. We decided to charge a flat annual fee for the program – at a rather high figure for the times. We quickly discovered that employers were happy to subsidize their employees, although I had to make a few calls in the beginning to familiarize the personnel directors with the program. After the first year or so, the question never again arose.

Air Force Pilots

There was another dimension to the program as well. The home campus had a longstanding Degree Completion Program for U.S. military personnel. In conjunction with nearby Richards-Gebaur Air Force Base, where I had been privileged to serve as an adviser to the Community College of the Air Force, we offered the Portfolio Plan to Air Force personnel as well as civilian students.
Because of scheduling and other constraints, it was necessary to invent an early form of distance learning for these airmen. Computers were not available in those days, but we made extensive use of telephone, mail and after-hours conferences to maintain close communication with the Air Force students.

The most dramatic example of this new “distance learning” was the Air Force pilots, who were allowed to use their training flights to come to Richards-Gebaur and also to the college offices to have conferences with their counselors and professors. They came for all over – Alaska, Washington, D.C., Los Angeles, Texas and all points of the compass. Never have I seen more enthusiasm for academic work than I saw with these guys – unless it was the excitement that pervaded the entire student body. This reaction was certainly proof that motivation is a primary ingredient of successful learning.

Accreditation

After the program had graduated its first students, I arranged for the North Central Association of Colleges and Secondary Schools, the regional accreditation authority, to visit and evaluate the program. This was a two-step process. First, I paid three highly respected North Central evaluators to conduct their own investigation and to author a report. There were a couple of suggestions for minor adjustments, which we instituted immediately.

Then I invited the North Central to send an official team for an accreditation evaluation. Upon their arrival, we provided them with the report of the distinguished professors. In the end, our experiment passed accreditation with flying colors – much to the surprise even of a couple of the examiners.

After three years, circumstances drew me away from the new college. The program was relocated to the main campus and, I was told, eventually assimilated into the traditional curriculum.

But it was a heady experience for us all while it lasted!

 

© Richfield Press, Ltd. 2018 All Rights Reserved