A Proposal For A New Health Care System For The United States of America
Dr. Louis Frayser Posted March 1, 2008
Introduction
It is almost common knowledge that our health care system is in a state of chaos. Dominated by governmental bureaucracies and the bureaucratic maze created by the various mega health maintenance organizations, insurance companies and a supporting cast of hospitals, pharmaceutical companies and laboratories. Costs spiral and our federal deficit swells. Worse yet, those needing and seeking health care are often put off, delayed or denied the needed care. The bean counters in the various bureaucracies decide who gets care and, if they get care, what care consumers (patients) get. Medicare and Medicaid costs, including pharmaceutical costs, are like a runaway train. These costs comprise the lions� share of the federal deficit. This has been well documented in many writings published in the New York Times and other major papers and by television money reports. Efforts to positively, definitively, and permanently correct the health care problem have failed. To date, changes in the system proposed by politicians and others have been little more than Band-Aids applied to a wound hemorrhaging money. As a result, the taxpayer is drowning in red ink. China, who floats a huge piece of our deficit, has a choke hold on our economy.
The purpose of this proposal is to offer a completely new approach to health care in our country. This system rests upon the following principles:
A. The principle of competition and right to choose, are central to American capitalism and central to this proposed health care system.
B. The concept of �free care/free medicines� is completely and permanently eliminated from this system.
C. Revision of present methods of reimbursements that will result in a major, major reduction in health care costs and hence a major, major reduction in the federal deficit.
D. We can provide universal health care for every American citizen. However, to date very little discussion has been offered regarding the role of universal health care in the reduction of health care costs. I propose to do so.
E. Relieve private industry of a significant portion of health care costs for employees.
F. We should support an existing mechanism, community clinics, for providing comprehensive health for everyone including those indigent persons who don�t qualify for universal health care.
It is my belief that this proposal, which rests on the principles cited, will remove the costly nightmare that is today�s health care system. The specifics of the system now follow.
Specifics
A. Choice and Competition
As presently structured, a huge number of working Americans receive their health care through arrangements between employers, insurance groups and provider groups. Patients, in turn, must seek care from provider groups that are parties to these arrangements. The insuring parties agree to pay some part, if not all, of the costs for the health care services rendered. For consumers (patients), the decision to allow care, delay care, deny care and the route(s) to be used to secure care (if allowed) and where and with whom the care is given are decisions not made by the patient. All too often these decisions are made by persons with little, if any, medical training and by persons who have never seen the patient and who follow protocols that have but one purpose, one objective - the dollar bottom line. "The consumer be damned." What if the patient had the freedom of choice of where and with whom to receive health care? What if the consumer was no longer held hostage to the business arrangements between employers, mega insurance groups and mega health care groups? The answer is quite simple - consumers would no longer be prisoners and the various health care provider groups would be forced to compete for patients based on the quality of care delivered. Thus, the fundamental principal of American capitalism comes into full play. The profound and fundamental principles of business and business management now applies:
What is the quality of your product? What is your capacity to deliver the product? Do you in fact deliver the product?
The consumer (the patient), through freedom of choice is and must remain the judge of both quality of the heath care product and the delivery of that product.
Choice and competition: fundamental principles of American capitalism at work!
B. Provide every American with Universal Health Care and a Universal Health Care card that cannot be assigned to any health care provider or group of whatever description, name or title. As will be shown, this will not only provide unfettered access to health care, but also become the mechanism and pathway for the reduction of health care costs including a major reduction in the federal health care bureaucracy and, most importantly, it compels competition among health care providers of all descriptions to compete and retain patients based on the quality of care available (the product) and the delivery of that product. The consumer (patient) would have a choice, which in turn, would make the product and product delivery system compelled to engage in competition. Businesses survive or fail on this principle. In matters of health and life and death, consumers must never lose.
C. Revision of the present methods of reimbursement to health care providers and the time required for these reimbursements to be made.
1. All fee schedules should be clear and capped. This is not un-American! Presently, reimbursement requests submitted to Medicare, Medicaid and private insurers have, at best, seriously convoluted responses. For example, a bill for services in the amount of $100 is submitted for payment. Regardless to whom the bill is submitted, the typical response is this: �We only allow $60 for the service rendered. We pay 80% of the amount allowable, $48.� How many people are employed around the country to manage the �disbursements� game? How many computers and how much computer time and memory are required to maintain this system? What if doctors and various provider groups did not have to hire billing personnel or out-source to billing companies? And, what about the time spent pouring through billing code books to find the billing codes that might provider a higher reimbursement? What if billing responses were simple and clearly stated; i.e., �reimbursement for services is forty-eight dollars? Check attached.� Were this to be established, the entire billing game could be dismantled with almost incalculable savings to government, private insurance and health providers of all descriptions.
2. Capped reimbursements schedules should apply to as complete a listing of health care services as can be anticipated and a binding legal requirement to pay claims for reimbursement within ten (10) working days should be placed on all payers of whatever description. I hazard to guess that every health care provider would welcome the new found certainty of the system, and every provider and every taxpayer would welcome the savings to be gained from dismantling the expensive chaos of current reimbursement policies presently in place. "Capped fees" as a concept, is already in place, hidden in a little game of "now you see it, now you don't" run by various players. It goes like this: submit any bill you like, but only a certain amount is "allowable". Now the big catch - only a percentage of the "allowable" is paid. Example: Billed $100; allowable $60.00. Paid - 80% of "allowable", or $48.00.
What is the point of the game? Hide the capped fee ploicy. Think about it - tons of money could be saved by eliminating the personnel, paper and technology costs associated with this game. Simply pay the capped $48 up front.
D. It is of critical importance to this proposed health care system, and to any health care system, that we abandon any and all notions of free health care. This is essential to the efficient use of health care resources. I firmly believe that every American citizen can afford twenty-five percent (25%) of fees charged on a first visit to a physician and twenty percent (20%) of the cost for each follow-up visit. These out-of-pocket payments would reduce billings for reimbursement by the amount paid by the patient. Patient participation in the cost of care enhances the potential for full participation of the patient in maintaining health.
E. This proposed health care system would relieve private industry of a significant portion of the health care costs of their employees, including retirees. The need for complex and difficult health care negotiations with labor unions, health care provider organizations and insurance groups would be over. All employers would be taxed seventy-five percent (75%) of their anticipated health care costs on an annual basis - this in exchange for substantial care savings and the new found freedom of revenue management not encumbered by health care costs.
F. Some of the most important health care resources in many American cities are the community clinics. Yet, they are the most unheralded. If properly financed to allow for expansion of services, they hold the potential for substantially reducing the use of emergency rooms for non-urgent clients. This is proving to be a disaster for hospitals with emergency rooms that are forced to provide uncompensated routine clinic care. I propose that community clinics be compensated for each patient based on an established fee schedule with patient participation in costs. Each state, without federal subsidy, would be required to fund the health care of its indigent that does not qualify for universal health care. The Medicaid system, except for the care of infants and children, would be ended. The ending of Medicaid and its enormous bureaucracy would result in cost savings - offices, phones, computers, personnel and layer and layer of regulations and paper - that would certainly adequately fund this new approach. Medicaid would have only two (2) functions: disbursement and program evaluation.
III. How do we pay for this system?
A. As suggested, end Medicare as we know it. This includes closing offices, marked reduction in staff, reducing office space needed for residual functions, selling off technology no longer needed, selling furnishings no longer needed. There should be only two (2) residual Medicare functions:
1. Disbursements compelled by fixed fee schedules.
2. Program evaluation. The evaluation process should be directed and conducted by Joint Commission for the Accreditation of Health Organizations (JCAHO). Evaluations of providers and provider facilities should be annual and the findings should represent the Gold Standard of Health Care Delivery. This would eliminate the need for audits by numerous agencies. JCAHO audits would include individual providers as well as provider groups and would focus on the following:
a. Patient access to care; b. The quality of health care delivery directed toward identified and desired patient outcomes; c. Actual patient outcomes; and d. Facility�s preparedness for the delivery of health care.
Audits would be unannounced. JCAHO findings would be used to determine whether providers would continue to be eligible for Universal Health Care reimbursements.
B. End the Medicaid Program As We Know It.
1. Each state would be fully and solely responsible for its �Medicaid� program. 2. Benefits would be limited to American citizens. 3. Benefits would be mandatory for and limited to infants and minors to age 18. 4. Disbursements would follow a standard fee schedule.
C. Capping of fees as described and applied to hospitals, laboratories and special procedures. Fee schedules and audits would also apply to nursing homes and convalescent homes.
D. Underwrite and enable the expansion of community clinics which are in the trenches of healthcare delivery, serving anyone that walks in the door, all too often drowning in huge numbers of uncompensated visits. Community clinics see thousand or more patients per year; the vast majority of these patients are uninsured and not eligible for various insurance coverage programs. Were it not for community clinics, these numbers would simply add to the throngs that utilize emergency rooms as clinics. These represent uncompensated visits. No discussion is required in order to appreciate the devastating fiscal impact of caring for the uninsured. Alternatively, funding for this concept could be easily accomplished if the Fortune 500 companies would voluntarily contribute 25% of their annual aggregate gross revenue to establish a Community Clinic Foundation. In turn, this foundation could provide unrestricted grants to community clinics nationwide which would enable them to markedly reduce the number of patients that use emergency rooms as outpatient clinics. The savings to local and state government is both obvious and enormous.
E. End �capitation� payments to all health care providers and health care organizations. Under capitation plans, health care providers (or groups) are given up-front X number of dollars for care of Y number of patients. These funds, or insurance premiums, are paid whether care is given or not. It is to the decided advantage of providers not to see the patients: profits derived from services withheld. The unseen patient is not a cost factor. It is of critical fiscal and ethical importance that this practice be ended.
IV. Benefits Beyond Dollars and Cents
A. No longer will bean counters and others with no medical training and no patient contact make decisions as to when, what and where medical care will be given. These people have no medical legal liability for their decisions.
B. Doctors will no longer have to fight their way through denials networks to refer patients for care or to get approvals for hospitalization or testing care. The health care system here proposed simply eliminates this bureaucracy of frustration. Patients and patient care would always come first. Medical decisions will and must be made by doctors and their patients alone.
C. The number of forms now in vogue and required in patient care today represents nothing more than wasteful redundancy. All that is required is a well-structured chart that chronicles the care given. Such a chart documents all of the included components of health care: date and time of visits, notes problems, laboratory results, referrals, etc. Nothing more is needed.
Electronic Medical Records are a recent craze -- a very, very expensive craze. Given the technology already at hand, (fax machines, email, etc.) patient information can be transmitted around the world in a heart beat. The Electronic Medical Record craze is just another vehicle for hustling the health care dollar. �In all progress there is change; all change is not progress.� Electronic Medical Records represent change without progress; they improve nothing. They do offer a new way to waste money.
V. Conclusion
I have complete faith in the health care system I am proposing. I believe it can and will, if implemented, accomplish the objectives of improved access to health care, a significant reduction in the costs of health care, and a major reduction in the federal health care bureaucracy (the slashing of �Big Government�), as well as a reduction in state health care bureaucracies. With freedom of patient choice, we have built-in mechanism for evaluating this proposed health care system. Providing patient care is significantly eased. While I am profoundly confident in the merits of this system, I am equally doubtful as to its broader acceptance and even pessimistic as to its potential for adoption. Our present heath care system is in chaos -- there is much money to be made in chaos. My prayer is that this proposal will at least say that things as they are do not have to stay that way. At the very least, I pray for some discussion of the matter. This plan requires the application of common sense and common sense is not a felony.
VI. Questions of Interest
A. At the end of one year of operation of this system, how many patients (consumers) will have switched from their present health care arrangements? (It is understood, by me at least, that should the proposal gain attraction in public response, existing health care systems will immediately modify their patient practices in order to block acceptance and implementation of this plan.)
B. Would, as asserted, this health care program be productive of significant health care savings when compared to our present health care system? I would welcome a comparative cost analysis done by Harvard School of Public Health & School of Business, the University of Michigan School of Public Health & Business, and the University of Pennsylvania School of Public Health & Business. The results of these three independent analyses would be most valuable in lighting the path of choice between systems.
Respectfully submitted,
Louis C. Frayser, M.D.
Abbreviated Medical Biography
1. M.D. degree, Case Western Reserve University, Cleveland OH
2. 27 years, private practice, Internal Medicine, Los Angeles, CA
3. Medical Director, Saint Johns Well Child and Family Centers, a Community Clinic, LA, CA
4. Director, Chronic Disease Management, Saint John's Well Child and Family Centers, Community Clinic, LA, CA
Detailed personal resume available upon request.
My contact information:
Email address: lcfraysermd@comcast.net
Telephone# - 770-731-0004
Fax# - 770-731-0005
Cell# - 770-820-8000
© Louis C. Frayser 2009