Monday, October 19, 2009

The TANSTAAFL Health Care Plan with Individual Accountability

Yeah.. this is a huge post, but you asked for it, Bernardo... It's only bullet points, and some implementation details are not specifically addressed – I had to start somewhere. It's mostly a re-statement of notes from previous posts. I don't *think* this is everything, but it's far more detailed than many proposals floating around... (and I'm not afraid for others to look at it, either.)


= Funding of government supplied health care programs is defined as 15% of previous-year tax revenues. This funding level to apply for the first five (5) years of the program, then *decreases* by 1% per year for the next five years, ending at 10% of tax revenues. No direct taxation of workers (via paycheck withholding) for health care funding (which only documents deductions / credits). Annual budget starts from documented revenue numbers from GAO. Increases in revenue (or reductions) are applied line item basis, e.g., if tax revenues fall by 5%, then *all* budget items funding are reduced by 5% for the next year. No 'borrowing' against projected future revenues. The only way to increase spending is to increase OVERALL tax revenues – no 'targeted' taxation for this (or any) specific spending program.

= BY DEFINITION: Budgetary constraints will, by necessity, generate limited services (i.e. rationing). This rationing only exists in the public system. Budgetary constrictions mean there will be Clearly Defined limits to the products and services to be provided. It is highly likely in some cases that 'care' will be restricted – for cost considerations – to 'reducing pain', not working on individual 'cures'. So be it. That's the risk one takes by relying on the government for your care instead of taking appropriate steps to provide for YOUR OWN CARE.

= No direct government payments to individuals or organizations OTHER than reimbursement for transfer from private to GHFC facility. Government provides Health Care SERVICES, and is not a payment transfer mechanism.


= No governmental restrictions or regulation of private provider-to-consumer health care transactions. Example: There is no - repeat, NO - restrictions based on the idea, "if everyone can't get (afford) that service, no one can." Life is not fair, either; deal with it.

= Eliminate all (state and federal) restrictions (and mandatory coverages) in the purchase of private health care insurance. In other words, anyone can buy any policy, even across state lines. Using of any reasonable 'group rates' formula at discretion of insurance company, but same group rates are to be available to all who meet qualifications. Consumer may pick and choose coverage items (e.g., persons 60+ years old not required to have pregnancy coverage).

= All health care expenditures (including compensation deductibles) are 100% tax-deductible on the individual's tax return, e.g., all HC insurance premiums are also deductible by the individual. Employers are allowed tax deductions *only* for the administration of health care plans, not the actual cost of insurance. All HC insurance costs paid by the employer are considered INCOME to the individual and reported on his annual W2 as such. (As noted, any deductions from salary are 100% deductible to the individual.)

= Insurance is considered a CONTRACT for services between the provider and the individual. Existing Contract Law applies for enforcement. Once a policy is issued, the policy should remain active and in effect with the individual until canceled or modified by mutual consent, regardless of employment status. Thus, “pre-existing conditions” will remain covered, unless new provider clearly discloses new requirements. No penalties greater than one (1) month's total premium charge to shift insurance coverage from one provider to another. Consumer can change coverage provider, or change program/coverage details, on an annual basis at no penalty.

= Failure by the individual to pay premiums allows provider to suspend coverage. Consideration will be provided for short-term delinquency issues, but if account is no more than three (3) months past due, coverage may not be canceled if account brought current within ten (10) days. Once coverage has been 'canceled' , the individual may re-instate coverage , including coverage for pre-existing conditions, by paying a one-time penalty of one (1) years premium cost, plus the first months coverage in advance.

= Personal Health Care Insurance is not required by law. Individuals may choose to be “self-insured” at their own risk. Insurance will have have two components: catastrophic (long-term) and maintenance (short-term). HC-LT will utilize a Medical Savings Account (MSA) approach, controlled by the individual. HC-ST will be a traditional policy to handle short-term and health maintenance costs. Contributions to either account are considered 'pre-tax' income. Contributions to MSA's may be withdrawn for any reason by consumer, but have a 10% taxable income penalty if *not * used for medical / health related expenses. Earnings (from policy investments), may only be used for medical expenses. Upon death, any remaining funding may be assigned (via stipulations in a will) to a beneficiary, but those funds are treated as “earnings” in the new account and may not be withdrawn for non-medical personal use without penalty.

= Emergency Health Care is provided by any/all public or private facilities (as is done currently). However, if non-insured, the patent is transferred to the nearest Government facility as soon as safe. Once transferred from private facility, the facility has no further obligation to the patient (see Tort reform). Transfer costs are assumed by the government at a defined compensation rate scale.

= All insurance policies must clearly state which conditions and/or services are NOT covered. Consumers are always allowed to directly pay for ELECTIVE (or non-covered) procedures. No limits on the number (or responsibilities) of policies held by an individual.


= All current medical programs – VA system, Medicare, Medicaid, drug program, and medical aspects of social Security – are consolidated and absorbed into a single division – Health Care Services (HCS) – which is represented under existing HHS cabinet department. Budget to be consolidated and separate from all other programs/departments....

= ALTERNATIVE IDEA: existing Medicare and Medicaid programs to be privatized under contract to government, with specifically defined requirements and obligations. Open to (re)bid every five (5) years.

= No more than 10% of HCS funding may be used for administration staff at all levels. Suggested breakdown: 50% staff salaries (health care workers), 40% products, services and infrastructure, 10% administration staff.

= Using the existing VA program and infrastructure as a starting point, the government will provide actual services to individuals, at a Government Health Care Facility (GHCF). There is no charge to the recipient, but patients must be released from care as soon as medically appropriate. Details of care to be defined by GHFC staff. Patient has no voice in defining 'what they want', e.g., using the government system puts the government in charge of treatment to be provided. Point: You can't expect to dictate how you will receive 'unlimited access' to any and all 'possible treatments' when YOU are not paying the bill.

= Disband / Eliminate the Food and Drug Administration (FDA), and replace it with an organization managed by the private sector under contract to federal government. As an example, the Underwriter's Laboratory operates appropriately in certifying electrical appliances. This is the model for a privatized version of the FDA.

= Tort reform: (1) defined caps on malpractice amounts; (2) malpractice limited to reasonable standard of care; (3) adoption of 'loser-pays' approach to reduce frivolous suits. Individuals cannot 'sue' government for care (or failure to provide care). Use of the GHCF system, releases liability from care providers. No one is denied legal remedies for actual injuries or damages, but limits (caps) placed on “punitive” damages. Lawyers who pursue frivolous cases are liable for censure, revocation of law license, penalties and court costs. Legal fees capped at 33% of any court award.

= Education: Student loan financing to medical schools and colleges require civil service in GHCF as a contracted employee. One year service per year of financing. Not unlike concept of getting tuition help for military service, but in reverse (training first, then civil service).

= Mandatory (reversible) sterilization after government pays birthing expenses (or abortion expense) for childbirth at GHCF. Reversing sterilization procedure must be paid in cash, in full, in advance by individual. Children of 'Illegals' are assigned to private adoption agencies – parents are not allowed to remain in country.

= Implement program to implement a national, standardized patient record keeping system within 5-years. System to include computer based diagnostics and test results. To be managed by annual contract once in place. Services to be provided by private bid with no pre-conditions (e.g., union labor, racial company ownership, etc.). Bid must include penalties for cost overruns, delays, etc.

= All elected officials are required to participate in GHCF program. Only alternative is direct (and immediate!) cash payment for services in a private facility. (They are allowed to keep / maintain personal MSA accounts for when they leave public service – but while they are drawing a check from taxpayers, they use the GHCF system as their primary provider. Exception: Personal Care at Walter Reed will be provided for first ten persons in executive branch line of succession and in the cabinet (does not include care for their families).

= Persons working for GHCF system (e.g., for tuition reimbursement, or any contracted staff positions - including non-medical personnel) must use the GHCF system while employed in civil service.


= Deregulation: Relax the restrictions on those health care professionals who are not licensed doctors, e.g., nurses, nurse practitioners, medical assistants, etc., for routine procedures, physicals and minor ailments.

= Misrepresentation and demanding NON-EMERGENCY care at an ER (private or public) is immediately subject to severe legal procedures, starting with immediate jail time for not less than 72 hours.

= Private medical professionals and facilities may refuse to provide non-emergency or elective care at their discretion with reasonable notification to the patient. They must use best efforts to immediately assist with transportation to another facility at their cost - shift to another private facility if covered by individual, or to the nearest GHCF location.

= Non-U.S. Residents who rely on public system (not privately insured) – when released from care - must assume a non-paid position as hourly government worker (building roads, janitorial, etc.) until 80% of spending has been recovered.

= 'Illegals' (even those with insurance coverage) are treated – either at private or public facility, based on payment status – however, they are not released. Instead they are transferred to INS and *immediately* shipped to country of origin. Repeat offenders become unpaid permanent staff at correctional facilities (prisons, etc.), and are not allowed access to public. Cost of transportation and maintenance of illegals counts as 'foreign aid' and reduces ALL available funding to those countries accordingly.

= Usage of government health services by individual who remain gainfully employed have 25% of wages automatically garnished until 80% of expenses are recovered. 100% of any income tax 'refunds' are retained.

= Manufacturer pricing of drugs and other medical supplies to private organizations capped at no more than 25% above or 10% below cost paid by GHCF for same item.

= Fraudulent use of GHCF goods and/or services is a felony punishable by not less than 1 year in prison per count if convicted.

= If private insurance does NOT cover a specific procedure, and consumer unwilling to pay, then private facility may transfer case to GHCF, where care follows rules there. Example: if policy specifically doesn't cover CANCER, patient may pay out-of-pocket or be transferred to GHCF.

= Actual costs of ALL medical procedures and services will be clearly stated and must be acknowledged line-by-line by the patient. This is required for both private and GHFC billing. Non-immediate (or elective) procedures must be accurately estimated and acknowledged before treatment begins. Where possible, costs for various options must be presented and consumer chooses which is performed. (NOTE: It is likely treatment options with the greater chance of success will *always* be chosen, but there are frequent situations where the costs of doing things in a particular sequence vary with little/no impact on the expected results – this must be disclosed to the consumer.)

= Voluntary contribution program: individuals may choose to apply a portion of their income tax refund to assist people who have no insurance and rely on GHFC services. (As with election campaign contributions.) Also, tax deduction for those who pay for private coverage for others (direct payments only, not insurance).

* * * * *

Did I miss some things? Highly likely. But you can't say I didn't try...

Yes, dear Professor, the horse is dead and we should dismount.

* * * * *


Pundits and 'Radical Change' proponents begin with the premise that everyone has a fundamental right to have someone else pay for their health care costs, just as everyone has a fundamental right to have someone else pay for their children's education. The result has been a government-run school system that has been clearly proven to be less than optimal by any reasonable standard of measurement. Question - Why do we think government-run Health Care will be any different?

Are the problems we have providing health care services severe enough and common enough to justify fundamental changes in 1/6 of the national economy? It's arguable that, yes, the system is broken. If so, what do we fix first? I ask that simple question because the changes we *know* now will not happen is (a) some modification of the malpractice laws and (b) general tort reform. It's likely there are several more sacred cows that are 'off limits'. Let's be real for a moment – the proposals being batted around (unlike what we discuss on this blog) are not and has never been about addressing the problem – it's about politics: Control and Power over people.

I'd like to point out (again) that Tennessee and Massachusetts have already adopted variations of the current proposals a few years ago. That should give us a picture of how well these proposals will work in the real world. So... Are they working? *THE* major criticism of the present system is that we spend far more, on health care than anyone else; we're not getting our money's worth. This leads to the obvious: let's look at the implementation of government-run Health Care in Tennessee and Massachusetts... Have costs gone down? Hmmm...

Let me ask, one last (?) time, where did this obligation for pay ME to pay for someone else's health care come from? Exactly what objective principle justifies confiscation of one person's property to be used for direct benefit of another individual? (I don't care if we're already doing it for other reasons; it's still wrong!) 'Mandated charity' is NOT charity; it's redistribution (theft).

The argument that “doing this will save money if everyone is put under a health care plan, and the preventive medicine process alone will save huge amounts” is, quite simply, wishful thinking at best. We don't need health care reform to, for example, put a tax on soft drinks - so while we're at it: if 'sugar' is so bad, why not end the sugar protections and subsidies already on the books? (If you think that task is easy, look back upon decades of farm subsidies for tobacco farmers.) Is there any evidence that preventive medicine applied to an entire population lowers health care costs? Cleaning up toxic wells and providing clean water certainly works. But does 'encouraging' people to exercise more and lose weight actually work? It's not going to be one-size-fits-all, no matter how good the intentions are – it's going to be one-size-fits-NONE.

Out the political world, the 'experts' are not even able to tell me what these changes that “must” be included are even going to cost – and seem strangely obsessed with keeping ME from looking at the details of their plan before THEY vote on implementation. Paranoid? I don't think so. After all, all these machinations are because there is an unjustified belief that, somehow – this time, this time – government will prove itself capable of managing Health Care for the entire population within our borders, *better* than it has managed Amtrak, the Post Office, Social Security, Fannie Mae, Freddie Mac, FHA, FDA, the DC public education system, etc., etc., etc...

*THE* reason health care costs so much is the last two years of life. If we could eliminate those two years we would no longer be spending more than other countries. And THAT is where the Real 'Moral Dilemma' exists. We know how to save the money. Have the good grace to die – do it for the good of country! It's your duty to die!

The Real Problem is being able to identify - AHEAD OF TIME - that you're in that "last two years". Sometimes (i.e., with a terminal illness), that analysis is easy; but at other times (treatment just "didn't work") , figuring out you're at the end of the line isn't so simple.

Seriously, the moral dilemma comes when you try to plan out WHO makes these End Of Life health care decisions? And WHO pays pay for them? If the dying person has the resources to pay for all that expensive treatment, should the state step in and prevent that "waste", so the money can be inherited (and subject to inheritance tax)? And WHO speaks for the dying person? Themselves? Can they assign that responsibility to someone else (e.g., a family member)? Who decides if a person is mentally competent to make a life-death decision? Does the interest of 'the country' take precedence over the decisions of the individual?

I personally *start* from the position where the property owner has the right to use that property to preserve every last second of life (or use that property for *any* purpose) - IF THEY SO CHOOSE.

But that's just the beginning ... suppose someone doesn't have the resources – and now 'society' must pay for their end-of-life expenses... WHO is obligated to make that payment? Is it an entitlement for all and an obligation on the public purse - and WHICH public purse are we talking about here: Local? State? Federal? If it's an entitlement, then it could be argued those funds are actually the property of the patient, and therefore, the individual decides whether to spend great sums on staying alive... Circles within circles within circles.

No one wants to be accountable – they don't mind making the decision, they just don't want to be accountable – for deciding exactly when prolonging life at great expense isn't worth the cost. What about a 90+ grandparent needing quadruple by-pass heart surgery so they can have a few more good years (who knows how many)... Now what? If we are going to seriously focus of controlling costs, these are the EXACT questions that need to be discussed by these self-proclaimed decisions makers in Congress. And they WILL NOT DO IT because the political implications are *HUGE*.

If it is all about controlling cost – the 'solution' is obvious, since the massive portion of the cost is spent in the last two years of life. There is only one question: WHO DECIDES?

** CONCLUSION (Yay!) **

On this blog, we've tried to sincerely work on finding and discussing the PROBLEM and what we might be able to do (and live with) to address the Real Issues.

At least, *I* feel better for having tried. Enjoy.

- Steve

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