Please allow me to offer my ideas for a new plan to replace Obamacare

Dear President Elect Donald Trump, I would like to offer a solution for our current failed healthcare system. My name is David Herring, and I am a board certified internal medicine physician in private practice in rural Virginia (think country doctor). I have been in practice over 20 years in private practice and employed, in solo practice and with partners. I am not politically inclined, nor do I have any political aspirations. I have no special economic or business training, nor do I consider myself particularly expert in any area of business or public health policy. I do however share the same concerns that millions of Americans have about our current healthcare system, and I would like to humbly offer my idea for a new system to deliver healthcare in this country. For the past several decades, we have seen outrageous increases in the cost of healthcare and continuing breakdown in our ability to provide that care to those in need (medically and financially). We have watched with great apprehension the ever dwindling reserves of our Medicare and Medicaid programs to the point that they are both at risk of financial failure, while those that are served by these programs are increasing in number. We (healthcare providers) have labored under the burden of increasing regulations and requirements that increase the cost and general overall burden of practice nearly to the point of discouragement, and the problem just keeps getting worse. No wonder nobody wants to go to med school anymore. We Americans (if I may be so bold as to speak for an entire nation) want a healthcare plan that provides the highest quality healthcare to all Americans (rich and poor alike). We expect the cost of that care to be reasonably controlled so we can afford it (knowing full well that every penny of the cost ultimately must come out of all our pockets). We rightfully expect healthcare to be universally available without being told by an insurance company that the treatment the doctor recommended is “not medically necessary” and therefore not “covered”. We very reasonably want a system that will provide care for any one individual (pick your diagnosis) without making that individual suffer financially. These things are reasonable and in the greatest country on the planet, should be attainable. President Obama devised a system that he hoped would address some of these issues. The “ObamaCare” plan mandated that every American should have insurance coverage, with the assumption that having insurance equates to having access to care –clearly not accurate. Those that cannot afford their insurance premium would receive financial assistance (from those who are financially more able). The plan was to further mandate that insurance would provide for “pre-existing conditions” so that no one would be denied insurance. At a glance, it would seem this might start to solve some of our problem, but it hasn’t (and if you examine the concept closely you would not expect it to). Having insurance is not the same thing as having access to care. “Insurance” is not a useful tool for healthcare delivery. Insurance as a concept was created as a financial hedge against the possibility that a catastrophe might occur (fire, accident, acute appendicitis, etc.…). In any given group of people there might be a major event happen to one or two –but not to everyone. If however, everyone put a little money into a pot, then no one in the group would have to suffer a financial catastrophe in addition to the fire (or whatever). Insurance is a good idea to protect ourselves from unexpected events, but as a tool to provide for healthcare (which is definitely not unexpected) it proves a very ineffective strategy. The insurance industry does not control the cost of healthcare (although the insurance industry is very good at controlling the cost to themselves to protect their profit). Neither does the insurance industry improve the delivery of healthcare –on the contrary, healthcare delivery must be limited to protect profit. It has been proposed that having insurance provides access to healthcare. I would argue that is not really the case. Having insurance clearly provides access to the doctor’s office, but once you are there your insurance typically stands in the way of your care. It is the insurance industry that requires the doctor’s office to call to beg approval for the diagnostic tests or medication that your physician recommends for your care. It is the insurance industry that denies coverage for these things claiming they are “medically unnecessary”. It is the insurance industry that changes your medication for no other reason than to save them money (profit), or changes the diagnostic test recommended by your physician. Supporters of the insurance industry would argue that they are saving money for the country -wrong. The insurance industry (which exists to make profit) is simply doing their job protecting the profit margin for the stockholder. Some might offer the argument that the insurance industry is simply applying some oversight and control to those silly doctors that would otherwise run amok ordering tests willy-nilly with no regard at all to cost. And, umm, ok so maybe we silly doctors might do that –a little, maybe , rarely, -although I can honestly say that in 23 years of practice I have yet to witness that. However, in over 20 years of practice, while the insurance industry has told me countless times that the tests I have ordered are “not medically necessary” and medications are “not covered”, I have yet to get a call or letter suggesting that the test I ordered might not be enough, and to be safe, to suggest I add some additional test out of a regard for the patient. One might expect one or two of those over a period of two decades, if the insurance industry was truly overseeing the care on behalf of the patient. The insurance industry is just that –an industry which exists to make a profit (and there is nothing at all wrong with that). By the same token it exists to provide a clearly necessary service –namely spreading risk of catastrophe over a population in order to minimize the individual financial impact, and if you’re smart, you have purchased what insurance is appropriate for your personal situation in the amount suitable to your financial situation. Some insurance should be mandatory –like that insurance which protects others from catastrophes that you might cause. We all should be required to maintain insurance to cover the other guy who might be injured as a result of our driving errors for example. I think we would all agree that is appropriate. When it comes to our healthcare, however, we need a system which is not overseen and governed by an entity whose judgement is driven by the motive to maximize profit. We need a system driven by the motive to optimize, universalize, and control cost of quality healthcare for every American equally. Mandating that every American purchase health insurance mainly benefits the insurance industry who sells their product for a profit to a captive consumer. We can do better than this, and we should. We all know that health care is expensive and getting more so all the time, but where is the expense and how can it be better managed? Anyone who has received medical care should be familiar with the “explanation of benefits” (EOB) that you get in the mail outlining the various services that you received and the cost of those services. Reviewing that EOB should show you that the lion share of medical expense is in the category of prescription drugs and diagnostic testing. Another huge portion goes to medical supplies/equipment and medical devices (artificial joints, pacemakers, etc.). Up to now, our strategy to control cost has been to limit access (insurance denials). C’mon -It’s the 21st century. We have incredible technology in the form of diagnostic testing, pharmacologic treatments, and amazing bioprosthetic devices that allow for more accurate diagnosis and more exquisite treatment of illness than ever before in the history of mankind. Granted, those things aren’t free, but rather than limiting the use because these things are expensive, we should be able to create a healthcare plan that actually controls the cost, thereby providing for better access to that technology whenever it is needed. I do not believe we can truly consider ourselves the leaders in healthcare delivery until we can provide the best technology available to every patient regardless of their societal state of affairs -and provide that care without causing financial devastation to the patient. And I would like to share a plan. What if What if we came up with a healthcare plan that divided our healthcare into “parts” and “labor”? “Labor” would be defined as the healthcare providers training and expertise. That would be your physician listening to your symptoms, arriving at a diagnosis, and generating a treatment plan based on his education and knowledge base. “Parts” would be the diagnostic testing (x-rays, CAT scans, blood work, etc.), the medical devices (pacemakers, artificial hips, etc.), and of course prescription medication (antibiotics, diabetes treatment, cholesterol medication, etc.). These are the “tools” your provider needs to take care of you. The tools may differ depending on the diagnosis, however, the same tools should be available for every patient, rich or poor. What if then, we as a nation could pool our money and generate a fund that could be used to purchase all of those parts directly from the manufacturers (instead of through the insurance industry). We could use the buying power of volume to negotiate the cost with device manufacturers, pharmaceutical industry, and labs and imaging centers. We could finally start to see real control over the cost of healthcare. This should be important to all Americans, keeping in mind that every penny spent on healthcare ultimately comes out of our pockets! This is a simple concept, but of course would require a complete overhaul of our current healthcare system. (But that’s what we’re looking for, right?) . A system like this would require a population of Americans willing to pay a healthcare tax (apportioned based on income). In particular this system would rely on the participation of our young and healthy. In order to get control of the cost of healthcare in this country we need the participation of everyone. And while the young may not need the benefits of healthcare now, they would be helping to support their “elders”, as they would expect the next generation to help support them when they are the “elders”. This system will require a dedicated government agency capable of aggressive negotiation with all the manufacturers of healthcare goods and services. A system like this would require medical device manufacturers and drug manufacturers to be willing to accept a reasonable profit (a $50million CEO salary might not be considered unreasonable if our nation wasn’t struggling to afford healthcare). A system like this would likely require some degree of government oversight to guarantee quality parts and materials. A system like this would be sustainable and affordable, and finally be able to guarantee universal healthcare “parts” to a nation (regardless of degree of wealth). So about the “labor” (the doctor’s bill)? Under this plan, the physician’s fees would be the responsibility of the patient directly (instead of paying an insurance company $150 so they can pay the doctor $50, you pay the doctor $50 directly). Physicians would be free to structure payment plans for individual patients, and their practices and would very likely move towards a flat monthly fee or annual fee based on the patient’s age. Physicians would be free to make adjustments on a patient to patient basis (currently not allowed under typical physician provider contracts with insurance companies). Of course, Medicaid and Medicare would both still exist and would continue to cover physician fees for their covered patients, but these government entities would no longer be responsible for the cost of medication, x-rays, diagnostic testing, etc. Reimbursement under these government entities would likely shift to a capitated structure. What about insurance? Under this plan we would continue to use insurance to cover emergencies and unexpected medical events which would be likely to require emergency room visit or hospitalization and likely require treatment by specialists. Insurance policies under this system however, should be extremely affordable since the insurance would only be responsible for paying the professional fee and the hospital cost. Allowing insurance companies to compete across state lines with each other will serve to control the insurance premiums, and allowing insurance companies to negotiate reimbursement with hospitals and providers will keep the cost to the insurance companies under control -which in turn creates savings which can be passed along to the consumer -lowering premiums even further. Downstream effect It is easy to imagine the downstream effect of such a healthcare plan where the cost of prescription medication, diagnostic testing, and medical devices is taken off the table and covered by a healthcare tax. For the typical patient, the cost of the healthcare provider would be covered by a flat monthly or annual fee with a probable $20 co-pay at each office visit. There would likely be a nominal co-pay for any diagnostic testing ($20 for an x-ray, $100 for a CT scan, etc.). There would likely be a nominal pharmacy fee for prescription medication, but the medication itself would be covered by taxes. Patients would no longer be required by an insurance company to change from one medication to another for no reason other than the cost of the medication to the insurance company. In the physician’s office the practice of medicine suddenly become streamlined and efficient. Necessary diagnostic testing such as labs, x-rays, MRIs or any other study will be ordered by the physician and scheduled by his staff without the need to preauthorize through an insurance company. Physicians would once again have the freedom to prescribe the medication they feel best meets the patient’s needs instead of settling for the medication allowed by the insurance company. For most primary care physicians, billing for services would probably be simplified to a capitated system accepting payment directly from the patient eliminating the need for billing 2nd party payers. Physicians would likely still have contracts with Medicare and Medicaid as a provider, but the payment would likely be capitated on a ‘per-patient/per-month’ basis eliminating the need for billing. Government subsidized healthcare programs (Medicare and Medicaid) would see an enormous reduction in their financial responsibilities with the cost of diagnostic testing, medical devices, and prescription medication now covered by tax dollars. Both of these programs, currently facing financial catastrophe, would be fiscally healed - with the responsibility now just to cover the professional fee, hospitalization, chronic care, home nursing, etc. (Those professional fees might be even lower if the reimbursement was tax free to the provider.) These programs would at once be restored to solvency and future sustainability. Business owners would see a significant reduction in the cost of healthcare coverage for their employees. No longer burdened with the potential expense of prescription medication, diagnostic testing and such -business owners could contract directly with local providers for primary care, and purchase insurance for catastrophic care at an affordable cost. Money saved might lead to increased hiring with a beneficial effect on unemployment. The insurance industry would simplify its expense by negotiating reimbursement to providers and by negotiating the cost of hospitalization. No longer responsible for the overwhelming expense of medication, testing, etc., the insurance industry would be able to lower premiums to an affordable rate and significantly reduce deductibles and still maintain a reasonable and healthy profit. With regard to the pharmaceutical industry, is high time for far reaching and significant changes in every aspect of that industry with the goal of manufacturing medications we need at a cost we can afford. So, there it is. From a small town country doctor, of no particular importance, a simple idea to restructure our healthcare system to provide affordable, quality care to all Americans rich or poor. This is a plan which will control the cost of medication and make it universally available. This is a plan which will control the cost of diagnostic testing including labs x-rays CAT scans etc. streamlining the diagnosis and management of illness and eliminating the restrictions and limitations imposed by the insurance industry. This is a plan which restores financial viability and future sustainability to Medicare and Medicaid. This is a plan which simplifies physician practice management and billing. This is a plan which reduces the cost to employers of providing healthcare for employees with the possible additional benefit of fostering an increase in hiring by those same employers. This is a plan which I expect will immediately appeal to some, while others I expect will be certainly begin to point out all the reasons a plan like this would not work (and I will be the first to admit a lot of details need to be worked out). Those that support the creation of Health Savings Accounts (HSA) should be able to see how a HSA would be a very useful asset -for those fortunate enough to be able to put extra money away. Perhaps for the rest, it would be helpful to offer tax breaks for money spent on healthcare (monthly flat fee to the doctor). Those that propose eliminating the “state line restrictions” on insurance companies should be able to see how promoting competition between insurance companies will still provide immense benefit to the consumer. Keeping the “pre-existing condition” clause, and insuring our children on our policies, should also be maintained of course, but since the scope of coverage for the insurance industry would be smaller and more focused, the premiums should suddenly become very affordable. Mr. Trump, you have built a lot of things in your life, but you have never built a healthcare plan that would satisfy the needs of a Nation -one that would be sustainable for future generations -one which actually reduces government involvement in healthcare by working behind the scenes providing the necessary tools and materials for our healthcare providers to do their job –then staying out of their way while they do it. (That would indeed be an impressive addition to your resume, and an enduring benefit for a grateful nation). With humility, hope and respect, David Herring, MD –Staunton/Waynesboro, Virginia

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  • David Herring
    posted about this on Facebook 2016-12-07 08:16:06 -0500
    Suggestions: Please allow me to offer my ideas for a new plan to replace Obamacare
  • David Herring
    published this page in Suggestions 2016-12-07 08:15:47 -0500
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