Congress Passes Socialized Medicine and Mandates Health Insurance -In 1798

Pres. John Adams  -  Photo: Wikipedia

PUBLISHED IN FORBES MAGAZINE 1/17/11 Author: Rick Ungar, Contributor - I cover the public health care policy beat.

The ink was barely dry on the PPACA when the first of many lawsuits to block the mandated health insurance provisions of the law was filed in a Florida District Court.

The pleadings, in part, read -

The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying health care coverage.

State of Florida, et al. vs. HHS

It turns out, the Founding Fathers would beg to disagree.

In July of 1798, Congress passed – and President John Adams signed - “An Act for the Relief of Sick and Disabled Seamen.” The law authorized the creation of a government operated marine hospital service and mandated that privately employed sailors be required to purchase health care insurance.

Keep in mind that the 5th Congress did not really need to struggle over the intentions of the drafters of the Constitutions in creating this Act as many of its members were the drafters of the Constitution.

And when the Bill came to the desk of President John Adams for signature, I think it’s safe to assume that the man in that chair had a pretty good grasp on what the framers had in mind.

Here’s how it happened.

During the early years of our union, the nation’s leaders realized that foreign trade would be essential to the young country’s ability to create a viable economy. To make it work, they relied on the nation’s private merchant ships – and the sailors that made them go – to be the instruments of this trade.

The problem was that a merchant mariner’s job was a difficult and dangerous undertaking in those days. Sailors were constantly hurting themselves, picking up weird tropical diseases, etc.

The troublesome reductions in manpower caused by back strains, twisted ankles and strange diseases often left a ship’s captain without enough sailors to get underway – a problem both bad for business and a strain on the nation’s economy.

But those were the days when members of Congress still used their collective heads to solve problems – not create them.

Realizing that a healthy maritime workforce was essential to the ability of our private merchant ships to engage in foreign trade, Congress and the President resolved to do something about it.

Enter “An Act for The Relief of Sick and Disabled Seamen”.

I encourage you to read the law as, in those days, legislation was short, to the point and fairly easy to understand.

The law did a number of fascinating things.

First, it created the Marine Hospital Service, a series of hospitals built and operated by the federal government to treat injured and ailing privately employed sailors. This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner. The payment of this tax for health care was not optional. If a sailor wanted to work, he had to pay up.

This is pretty much how it works today in the European nations that conduct socialized medical programs for its citizens – although 1% of wages doesn’t quite cut it any longer.

The law was not only the first time the United States created a socialized medical program (The Marine Hospital Service) but was also the first to mandate that privately employed citizens be legally required to make payments to pay for health care services. Upon passage of the law, ships were no longer permitted to sail in and out of our ports if the health care tax had not been collected by the ship owners and paid over to the government – thus the creation of the first payroll tax in our nation’s history.

When a sick or injured sailor needed medical assistance, the government would confirm that his payments had been collected and turned over by his employer and would then give the sailor a voucher entitling him to admission to the hospital where he would be treated for whatever ailed him.

While a few of the healthcare facilities accepting the government voucher were privately operated, the majority of the treatment was given out at the federal maritime hospitals that were built and operated by the government in the nation’s largest ports.

As the nation grew and expanded, the system was also expanded to cover sailors working the private vessels sailing the Mississippi and Ohio rivers.

The program eventually became the Public Health Service, a government operated health service that exists to this day under the supervision of the Surgeon General.

So much for the claim that “The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty….”

As for Congress’ understanding of the limits of the Constitution at the time the Act was passed, it is worth noting that Thomas Jefferson was the President of the Senate during the 5th Congress while Jonathan Dayton, the youngest man to sign the United States Constitution, was the Speaker of the House.

While I’m sure a number of readers are scratching their heads in the effort to find the distinction between the circumstances of 1798 and today, I think you’ll find it difficult.

Yes, the law at that time required only merchant sailors to purchase health care coverage. Thus, one could argue that nobody was forcing anyone to become a merchant sailor and, therefore, they were not required to purchase health care coverage unless they chose to pursue a career at sea.

However, this is no different than what we are looking at today.

Each of us has the option to turn down employment that would require us to purchase private health insurance under the health care reform law.

Would that be practical? Of course not – just as it would have been impractical for a man seeking employment as a merchant sailor in 1798 to turn down a job on a ship because he would be required by law to purchase health care coverage.

What’s more, a constitutional challenge to the legality of mandated health care cannot exist based on the number of people who are required to purchase the coverage – it must necessarily be based on whether any American can be so required.

Clearly,  the nation’s founders serving in the 5th Congress, and there were many of them, believed that mandated health insurance coverage was permitted within the limits established by our Constitution.

The moral to the story is that the political right-wing has to stop pretending they have the blessings of the Founding Fathers as their excuse to oppose whatever this president has to offer.

History makes it abundantly clear that they do not.

UPDATE: January 21- Given the conversation and controversy this piece has engendered, Greg Sargent over at The Washington Post put the piece to the test. You might be interested in what Greg discovered in his article, “Newsflash: Founders favored government run health care.”

Leaked video about what the Republican's and Rick Santorum's plan for Medicare, Medicaid and Universal Health Care.

The Republicans have released their new Medicare, Medicaid and universal health plan after the repeal Obamacare and defund Medicare, Medicaid and Universal Health. They said it will reduce the cost to the budget by nearly 95%, so taxes for the wealthy can be lowered to zero.

Please watch the video and all will be clear.

Total Health Care Costs Fall When Poor Are Provided Insurance: Study

Nancy Pelosi, a supporter of the Affordable Care Act, tours a health clinic.

First Posted: 02/10/2012 9:06 am Updated: 02/10/2012 9:06 am

The concept of support for universal health care is taboo among Republicans who scrutinize the Affordable Care Act -- dubbing it the "Job-Killing Health Care Law Act" -- and call for its repeal. But a new UC Irvine study challenges the GOP argument that the health care law is too costly, with data illustrating that health care costs on the whole fall when poorer, uninsured patients are provided with insurance.

"In a case study involving low-income people enrolled in a community-based health insurance program, we found that use of primary care increased but use of emergency services fell, and -- over time -- total health care costs declined," David Neumark, a co-author of the study, said in a release accompanying the findings.

The study -- which focused on uninsured people in Richmond, Virginia who fell 200 percent below the poverty line -- found that over three years, health care costs fell by almost 50 percent per participant, from $8,899 in the first year to $4,569 in the third after they received insurance. Participants who enrolled in health coverage made fewer trips to the emergency room, which are notorious for running up patient bills.

Instead, insured participants went for more primary care visits.

"A lot of the debate about health care reform surrounds the issue of whether we're setting up something that's going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services," Neumark said in the release. "[O]ver time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur."

Health care spending in the U.S. has been on the rise for years. Americans spent more than three times on health care in 2008 than they spent in the 18 years before, according to a Kaiser report.

Low-income, uninsured individuals tend to rack up exorbitant health-care bills because they often rely on emergency room visits instead of primary care. In the long run, these bills are paid by taxpayers. The Affordable Care Act "is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014," according to the study.

In an extreme example of the societal cost of leaving some uninsured, New Yorker writer Malcolm Gladwell once chronicled the medical costs of a homeless man in Nevada who "used more health-care dollars, after all, than almost anyone in the state."

"It would probably have been cheaper to give him a full-time nurse and his own apartment," Gladwell wrote.
Mandatory health care already saw some success in Massachusetts last decade, when current GOP presidential candidate and then-Massachusetts governor Mitt Romney signed a health care law that inspired the Affordable Care Act. Today, Massachusetts has the highest percentage of insured residents of any state.
Though he initially supported the plan, Romney's rival, GOP candidate Newt Gingrich, continues to slam Romney for enacting the health care law.

"Your plan essentially is one more big-government, bureaucratic high-cost system." Gingrich said. Gingrich's views are reflective of a majority of Americans who say they are in favor of repealing the health care law.
A repeal of the act could potentially add "at least a trillion dollars to the deficit," according to HealthCare.gov.

Also on HuffPost:

Healthcare costs decrease over time when low-income uninsured are provided coverage

10/02/2012 02:28:00

Study co-authored by UCI’s David Neumark indicates results of newly enacted reforms

Irvine, Calif.  — Enrollment of uninsured patients in a program with benefits comparable to those offered under the Affordable Care Act of 2010 resulted in significant healthcare cost savings, a new study finds. 

 

Published in the February issue of Health Affairs, the research sheds light on the potential outcomes of newly enacted healthcare reforms. 

 

“In a case study involving low-income people enrolled in a community-based health insurance program, we found that use of primary care increased but use of emergency services fell, and – over time – total healthcare costs declined,” said study co-author David Neumark, UC Irvine Chancellor’s Professor of economics and director of UCI’s Center for Economics & Public Policy study.

Working with researchers from the Virginia Commonwealth University Health System, Neumark tracked the emergency room, inpatient, outpatient and primary-care service utilization of about 26,000 previously uninsured Richmond residents between 2000 and 2007 whose household incomes fell 200 percent  below the federal poverty level. Qualified enrollees were granted health insurance and assigned a primary-care provider for one year. They were required to proactively re-enroll for subsequent annual coverage.

The demographics of these participants paralleled those of the population that will be affected by changes under the Affordable Care Act of 2010, Neumark said. The legislation is set to extend Medicaid benefits to about 16 million uninsured, low-income adults and children by the end of 2014.

The study found that primary-care visits for patients who enrolled continuously over three years rose from 1.06 in year one to 1.60 annually, while emergency-room visits fell from 1.02 in year one to 0.74 by year three. Costs per visit for both inpatients and outpatients also decreased, as did the length of inpatient stays.

On average, total healthcare costs per enrollee per year for this subset were cut nearly in half – from $8,899 in year one to $4,569 in year three. Overall costs per enrollee per year for all participants with at least one year of enrollment declined from $7,604 to $4,726.

“A lot of the debate about healthcare reform surrounds the issue of whether we’re setting up something that’s going to cost us more by increasing use of medical services or something that will cut costs through more appropriate and timely use of medical services,” Neumark said. “Our research shows that, over time, costs can be reduced through increased use of primary care and reductions in emergency-department visits and hospital admissions, but it may take several years of coverage for substantive savings to occur.”

Co-authors of the study include Cathy Bradley, professor and chair of healthcare policy & research at Virginia Commonwealth University; Sabina Gandhi, who earned a doctorate in economics at UCI and is now a VCU assistant research professor; Sheryl Garland, vice president of health policy and community relations at the VCU Health System; and Dr. Sheldon Retchin, VCU professor of internal medicine, gerontology and health administration and CEO of the VCU Health System.

About the University of California, Irvine: Founded in 1965, UCI is a top-ranked university dedicated to research, scholarship and community service. Led by Chancellor Michael Drake since 2005, UCI is among the most dynamic campuses in the University of California system, with nearly 28,000 undergraduate and graduate students, 1,100 faculty and 9,000 staff. Orange County’s second-largest employer, UCI contributes an annual economic impact of $4 billion. For more UCI news, visit www.today.uci.edu.

News Radio: UCI maintains on campus an ISDN line for conducting interviews with its faculty and experts. Use of this line is available for a fee to radio news programs/stations that wish to interview UCI faculty and experts. Use of the ISDN line is subject to availability and approval by the university.

The War Against Women's Reproductive Rights.

The Catholic bishops have raised a big stink about the mandate that all health insurance plans must include contraception benefits. Currently many policies do not and the out of pocket cost of controlling their family size is about $600.00 per year.

Now that may not sound like much, but when wages are decreasing and other costs are climbing, it is a lot. A couple using no birth control has an 85 percent chance of becoming pregnant in one year. The Agriculture Department estimates that on average, middle-income couples spend around $12,500 per year per child.

The solution is actually very simple: 
To eliminate religious organizations objection to pay for birth control, so middle-ages, is to eliminate employer based health insurance.

That means either each individual purchases their own insurance, as they do with life, home and auto insurance and the employer has nothing to do with it. OR you have an expanded Medicare program that eliminates private health insurance as the primary insurer of your health.

As William Kristal stated on the Daily Show, the government run military health system is the best and well run. He also said that the American citizens does not deserve the same high quality, well run health care system, but deserves the private insured less quality, poorly run health care system. Why, because the military personnel place their lives on the line. Well doesn't law enforcement, fire fighters, and so many other critical workers? And why don't we citizens deserve a high quality, well run health care system? (For those who don't know who William Kristal is, he's a ultra-conservative pundit, columnist, and Republican Party activist.)

I do find the very argument about the Catholics and religious freedom a bit archaic. Women have fought hard to raise their level of equality to that of their male counterparts. They have not achieved complete parity yet, but they are getting so much closer.

This religious argument fails on so many levels.

When a religious institution decides to operate an entity, other than their actual  churches, temples, etc., and hire individuals who are not members of that faith or adhere to the same religious prohibitions, then that religious institution must still comply with all mandated policies required of all other employers in the nation. To be carved out is not right to the employees to be discriminated against in such a working environment.

When a religious institution have such a moral objection to the policy, then hire only those who are obedient to that religious tenet, in this case only loyal practicing Catholics. Otherwise, they have voluntarily waived that prohibition withing the facility that they are employing non-members.

I understand that in many urban markets there are more than one employer in a given area that the Catholics are involved with, i.e. Universities, hospitals and schools. But there are small communities that the only hospital is a Catholic owned one. If you are a nurse, doctor or other employee, must you adhere to the religious tenet of your employer, even if they are not yours?

That in its self is forcing a religious theology on non-members of that faith, which is also a violation of the first amendment about free exercise of religion and also not being forced to practice a particular religion. So whose rights are superior to the others. In my mind, when you hire non-members, you waive that right so that you can hire non-members as employees.  An employer is much different than conducting religious services to members.

I do agree that they do provide some very nice services for the poor. But their universities, hospitals and schools are open for all secular individuals to enter as students, employees, and patients. By that act, they have moved into the secular arena to provide some type of service and thus competing with secular entities doing the same thing. If a religious institution gets a waiver of some mandated policy, then they have a competitive advantage in this supposed free market system. They already get an advantage with not having to pay any taxes on the property and income. To add more is not fair to the others.

If our government excludes the Catholics from this mandate in health care for women, you know that every "Christian" employer who objects to contraception coverage will demand the same treatment as the Catholic institutions. That is bad for women and for the country as a whole. There can't be any carve outs!

Obama meeting with Republican Leaders about Health Care Bill

GOP HYPOCRISY on Medicare Expansion

By CHARLES BABINGTON

WASHINGTON (AP) -- Democrats are troubled by the inconsistency of Republican lawmakers who approved a major Medicare expansion six years ago that has added tens of billions of dollars to federal deficits, but oppose current health overhaul plans.

All current GOP senators, including the 24 who voted for the 2003 Medicare expansion, oppose the health care bill that's backed by President Barack Obama and most congressional Democrats.

The Democrats claim that their plan moving through Congress now will pay for itself with higher taxes and spending cuts and they cite the nonpartisan Congressional Budget Office for support.

By contrast, when Republicans controlled the House, Senate and White House in 2003, they overcame Democratic opposition to add a deficit-financed prescription drug benefit to Medicare. The program will cost a half-trillion dollars over 10 years, or more by some estimates.

With no new taxes or spending offsets accompanying the Medicare drug program, the cost has been added to the federal debt.

Some Republicans say they don't believe the CBO's projections that the health care overhaul will pay for itself. As for their newfound worries about big government health expansions, they essentially say: That was then, this is now.

Six years ago, "it was standard practice not to pay for things," said Sen. Orrin Hatch, R-Utah. "We were concerned about it, because it certainly added to the deficit, no question." His 2003 vote has been vindicated, Hatch said, because the prescription drug benefit "has done a lot of good."

Sen. George Voinovich, R-Ohio, said those who see hypocrisy "can legitimately raise that issue." But he defended his positions in 2003 and now, saying the economy is in worse shape and Americans are more anxious.

Sen. Olympia Snowe, R-Maine, said simply: "Dredging up history is not the way to move forward." She noted that she fought unsuccessfully to offset some of President George W. Bush's deep tax cuts at the time.

But for now, she said, "it's a question of what's in this package," which the Senate passed Thursday in a party-line vote. The Senate bill still must be reconciled with a House version.

The political situation is different now, Snowe said, because "we're in a tough climate and people are angry and frustrated."

Some conservatives have no patience with such explanations.

"As far as I am concerned, any Republican who voted for the Medicare drug benefit has no right to criticize anything the Democrats have done in terms of adding to the national debt," said Bruce Bartlett, an official in the administrations of Ronald Reagan and George H.W. Bush. He made his comments in a Forbes article titled "Republican Deficit Hypocrisy."

Bartlett said the 2003 Medicare expansion was "a pure giveaway" that cost more than this year's Senate or House health bills will cost. More important, he said, "the drug benefit had no dedicated financing, no offsets and no revenue-raisers. One hundred percent of the cost simply added to the federal budget deficit."

The pending health care bills in Congress, he noted, are projected to add nothing to the deficit over 10 years.

Other lawmakers who voted for the 2003 Medicare expansion include the Senate's top three Republican leaders, all sharp critics of the Obama-backed health care plans: Mitch McConnell of Kentucky, Jon Kyl of Arizona and Lamar Alexander of Tennessee. Eleven Democratic senators voted with them back then.

The 2003 vote in the House was even more divisive. It resulted in a nearly three-hour roll call in which GOP leaders put extraordinary pressure on colleagues to back the prescription drug addition to Medicare. In the end, 204 Republicans and 16 Democrats voted for the bill.

Democrats certainly have indulged in deficit spending over the years. They say they have been more responsible over the last two decades, however. Bill Clinton's administration was largely constrained by a pay-as-you-go law, requiring most tax cuts or program expansions to be offset elsewhere with tax increases and spending cuts.

Clinton ended his presidency with a budget surplus. But it soon was wiped out by a sagging economy, the Iraq war, GOP tax cuts and the lapsing of the pay-as-you-go restrictions.

Obama and many Democrats in Congress have vowed to restore those restrictions. But they waived them this year for programs, including heavy stimulus spending meant to pull the economy from the severe recession of 2008-09.

The 2010 deficit is expected to reach $1.5 trillion, and the accumulated federal debt now exceeds $12 trillion. When the Republican-led Congress passed the Medicare expansion in 2003, the deficit was $374 billion and projected to hit $525 billion the following year, in part because of the new prescription drug benefit for seniors.

My Take on this story:
Where were the fiscal conservatives and tea baggers in 2003 when Bush and his party in Congress added such a large entitlement by expanding Medicare with no additional taxes or offset reduction in debt? Why are they against Obama's plan? Maybe because of the color of his skin and the Republican party is so ideologically polarized that having control of government is more important than effective governance? There is something very wrong here. The Republicans have lost all reasoning ability and their hatred of anything that is not theirs is preventing them from participating in effective governance.

Karl Rove's plan to eliminate government was to deplete the treasury to a point that only defense and the state department could be funded. All other social services would have to be eliminated. All other vital services would be privatized. So maybe since the Obama plan is budget neutral or even reduces the budget, the Republican adhering to Karl Rove's game plan oppose it. Now if the plan did add billions to the national debt, thus requiring eventually the elimination of the health care plan, as well as Medicare and Medicaid, social security, veterans benefits, education funding, etc., would that not meet the goal of the game plan?

America is in serious trouble in the current political craziness. We are about to implode from sheer ignorance.

Why the general populace can not see this is beyond my comprehension.

Photo: Senator Olympia Snowe by AP Photo/Harry Hamburg

Tis the day before Christmas and the Senate Health Care Bill is Up For a Vote

Tis the day before Christmas and the Senate must vote, does Health Care pass or die because of one vote?

Finally the Senate will vote on their version of the Health Care Reform bill. It has major flaws in it and is a major give away to the insurance industry. Even with the cap of 20% of premium dollars for non medical costs, the insurance industry is already figuring out how they can convert some operational costs into medical costs and fake their MLR (medial loss ratio) to meet this requirement. They must take pre-existing condition patients, but they can charge more for them. They can now charge more for senior citizens also. They are still shielded from anti-trust action and from medical injury liability because of their denial of coverage. Nothing in this bill to control tort costs for malpractice insurance and nothing to cap what insurances can charge for their policies.

With all that said, should it pass, it will be a step to hopefully better legislation in the near future to truly create universal health care at an affordable cost and greater access. Americans deserve no less than that.

As a foot note, the health care bill demonstrates the dysfunctional senate rules and procedures that must be changed in order to have effective governance. But reality is that it will not change, because neither party wants to loose the filibuster to stop the others legislative agenda, even if it is supported by the PEOPLE!

Finally the Republicans gave in and agreed to the vote, but not until the day before Christmas, so everyone must wait. It is so Christian of them to keep everyone in town to vote and not be with family for the most holy of days. No! Lets stay till midnight Christmas Eve and sing Christmas carols waiting for the clock to tick by and then pass the bill with 60 sure votes. I guess they needed today (Wednesday) to go after a conservative Democrat to convince them to vote against the bill when it is finally voted on tomorrow at 10 AM EST. Maybe, just maybe they can convince Joe Lieberman or Max Baucus to change their vote. The loyal opposition, right!  Some may ask why Harry Reid capitulated to the Republican time table to vote? That is because the senate rules require unanimous consent to change the scheduled floor vote. I know, the party in control should have the power to control the time table. But that's our dysfunctional senate.

So Merry Christmas.

HEALTH CARE REFORM, MY PLAN.

Here is my suggestion for a cost effective health care system for America.

First what is the crisis? There are some who question the need for reform because they are ignorant of the developing crisis. Let me explain what I know so far. Premiums are rising faster than income, stripping away disposable income that is critical for a growing economy. Insurance companies are shifting more of the cost to the patient in higher out-of-pocket costs in deductibles and co-pays at the same time increasing premiums. The reimbursement or compensation paid to health care providers is declining relative to operating expenses posing greater risk of them going bankrupt or closing their practices. The average age of America’s physician population is reaching 50, with fewer new physicians and nurses being trained. For the past two years, there are more foreign trained physicians than American trained practicing in America. Because of the demanding work hours of physicians 60+/wk, the bombardment from insurance companies of forms and other unnecessary paperwork that does not add to the quality of care of the patient, plus the constant threat of malpractice suits, and the decline in personal income, fewer of our smartest and brightest students are selecting health care as a profession. We are also experiencing a greater demand for health care as the country's population grows and the baby boomers are at an age that demands more care. The confluence of these issues has put our health care system in life support mode. Every one of these issues needs to be addressed in any reform Congress passes. Otherwise, there will be a greater crisis in access to health care, the quality of care able to be delivered and the cost will escalate relative to high demand and limited supply. Isn’t that the capitalistic way of the free market?

There are several components that have to be addressed in order to reduce the cost to consumers for health care: Tort reforms, elimination of profit, provider compensation model, de-politicize the process, IT efficiencies, pharmaceutical price control and outcome data research.

Tort Reform:

For those who do not know what tort is, it the civil law suits for medical malpractice that create a need for defensive medical practices and high premium fees charged to medical providers to cover claims of injury. The current system adds nothing to improving health care and is more a lottery win for those who obtain compensation from a sympathetic jury. Lawyers will receive as much as 40% of the award plus expenses for expert testimony, office fees, filing fees, court fees, etc. What is left for the patient is very small and in many cases the patient spends the money on luxuries, rather than their future health care needs. Some receive it through an annuity insurance policy in monthly or annual payments, if the award is large enough. Punitive damages are more punitive to you the consumer, because these large awards are passed on to you in higher medical fees. The majority of claims are a result of several factors or events, not all under the control of the medical professional, which collides together causing an injury to a patient. So how can this be changed and be fair to those who are actually harmed by a medical professional? Here are my thoughts: Eliminate the current tort structure and develop a no-fault insurance pool. Every medical professional would pay a premium; much like they do now, into a claims pool, the pool is invested in conservative instruments to raise additional revenues for claims. When a person incurs an injury, they submit a claim to the claims pool organization, a mutual type of nonprofit foundation. A rotating board made up of medical professionals, claims analysis experts, economic loss evaluators, investigators, a lawyer as the patient advocate, and an equivalent to a judge to oversee the claim process to insure fairness. There is no defendant because there is no suit against the medical professional or facility. This board would review the medical record, any supporting evidence the patient might submit, including professional testimony, and medical risk data that is obtained over time regarding the probability of this type of injury occurring for the condition being treated. Under my plan, the person would have their health care needs provided through the single payer model, so awards for medical expenses would not be necessary unless they are extreme, and then the funds are given to the single payer system to cover the extra cost. If there is economic loss, then the board would determine the amount to be paid over time to the patient; much the same as the VA system and most workmen’s compensation models. No punitive damages would be awarded. If the board determines that the medical professional is incompetent to provide the treatment that caused the injury, then they have the option to suspend the professional’s license to practice, revoke the license, or require the professional to attend training and pass an exam of competence before they can provide that treatment again, with review of competence in designated intervals post exam passage. In this way you are not eliminating good doctors that found themselves in a bad situation and not requiring their removal from the profession. However, if they are just a bad doctor, then they can have their license revoked and prohibited from medical practice again. Under this model you eliminate the profit from medical malpractice insurance that eats so much of the premiums paid by the medical professionals and allows more money for correcting the injury to the patient fairly. This would reduce direct and indirect cost to consumers for their health care, as these insurance costs are factored into the methodology used to compensate medical providers for their services. It would also eliminate the need for defensive medicine, thereby also reducing costs paid by you.

Elimination of profit:

Prior to Reagan in the 80’s insurance companies were a mutual, that being the policy holder was also the share holder of the company. Any profits would be passed onto the policy holders through reduced premiums or dividends. Deregulation allowed them to become for-profit and traded on the open market. This changed who these insurance companies answered to, from the policy holder to the market share holder, many being large corporate holding companies, that are not interested in you the policy holder in being made hole after a loss, but stock value, profit and dividends relative to their investment. This created a system were the insurance company had to start to deny and delay payment for loss to the policy holder in order to meet Wall Street analysis’s earnings targets and stock value. It also required them to use more of the premium dollar to market their products to the consumer, thereby reducing available funds to pay claims. Since 1945 insurance companies have been exempt from anti-trust regulations and allowed to collaborate to fix premium prices. Initially since the insurance companies were non-profit mutuals, this established premium stability in the insurance industry that kept the cost down for all consumers, regardless of the socioeconomic rating of the community you lived. However, deregulation did not remove this exemption and they have been able to collaborate regarding coverage, operating procedures and premiums without any oversight, thus raising premiums collectively at will regardless of the economic consequences to the consumer. The more they can shift the out of pocket cost to you the consumer and raise your premium, the higher their profits, dividend yield, thus an increase in stock value. The CEOs can make up to $57,000 PER HOUR under this model.

How do we eliminate profit? First establish a single payer expanded Medicare program for every citizen. A professional board of providers, hospitals, expert medical economists, and actuaries would establish the amount of money paid to providers, using the DRG style system used to pay most hospitals. DRG stands for Diagnosis Related Group that is a fixed fee paid for a specific diagnosis, regardless if it takes one trip to the doctor or many to treat the condition. There are modifications to this when more than one diagnosis is present and other circumstances require additional treatment methodologies to cure the condition. By use of best outcome data across large populations and demographics, providers can have guidelines that can help them provide the best treatment and the least cost, but knowing that every individual is different and variability is acceptable. This variability can be tracked to see if there are common trends that can be used to help providers with future patients or does the physician over utilize or treat without better outcome data. If so, then the appropriate medical board can address this issue through either education to bring the provider up to speed on appropriate treatment protocols or recommendation to Medicare for compensation reduction for unsubstantiated over utilization or treatment. If this is done through the health care professional’s currently established boards that conduct their board examination and certification, there would be negligible cost to manage these outliers. This would require all providers to be board certified to receive compensation from the Medicare plan. I know many say that any professional can not discipline their own, this is not true and I have seen that physicians are very critical of their own for poor care and are not shy about demanding a physician to become competent in their field. This is also a self interest of the physician who may have to be involved with a patient referred from the incompetent physician. No one wants a miss treated patient, and thus oversight is a normal process in today’s medical community. In fact most hospitals require a physician applying for admitting privileges must be proctored by another physician in their specialty to insure competence. If they fail, which happens, then they are denied privileges to admit patients to that hospital. Similar proctoring can occur in the office based practices as well through the management of the medical boards. This process will increase the quality of care being delivered.

Any direct patient care facility or entity must be a non-profit foundation, government owned, a mutual insurance company owned, community owned, or charitable organization. By this I mean it should not be publicly traded or closely held for the purpose of profit distribution. This will return the interest of the facility back to the patient in their charge instead of the share holder and Wall Street. I consider reasonable individual compensation of the physician or provider as payroll, not profit as defined. Equity in compensation between specialties can be accomplished by the board that establishes the DRG payments. There will be some conflicts between some specialties, such as primary care and surgeons, but that has always been the case, but mathematical matrix can reduce or eliminate this conflict.

Private health insurance companies would be required to return to a mutual model and no longer traded on the market. The policy holders would receive any economic benefit of profit and would vote on management compensation packages. This will drive the premium rate down and improve customer service, less denials and delays and the policy holders can vote to change management if the plan is under performing. It worked well in the first half of the 20^th century, there is no reason it can’t work well now.

De-politicize the process:

By establishing a professional board that determines what treatments are covered under the single payer model, it would reduce or eliminate any conflicts with political will and ideology. Politics can not be part of the process in determining what care a person receives, whether abortion, family planning, medication, procedures, or by race, religion, party affiliation, etc. Care will be determined by science and outcome data obtained from all providers through a comprehensive IT network system of aggregated data collection and analysis. The professional board will meet every six months to review any new data; covered services can be modified to meet the changing dynamics of medical science. No legislative body or political administration would be permitted to micro manage what is covered under the plan. They can only vote up or down on any premium subsidy funding. Medicare would become a semi-independent entity, but under the oversight of the Secretary of Health & Human Services, who is responsible to the president and thus the people for its proper management. The Secretary may not interfere with any of the boards that are determining covered benefits or the premium to be charged. The Secretary would be the senior manager of the plan and responsible to manage the professional, non-politically appointed federal workers of Medicare, as they do now. The Secretary would present to Congress and the President his/her budget for the indigent subscriber’s premium subsidies.

IT efficiency:

All health care providers would be required to have a certified electronic medical treatment management system that maintains the patient’s medical record, aggregates their treatment plans, collects outcome data, and allows other medical providers access to the appropriate medical information to effectively treat a patient that has presented to them or referred to them. This would reduce redundancy in laboratory tests when a patient is referred to another provider and should the patient present to an emergency facility, their history and current treatments would be available to reduce redundancy in tests and improve the speed of treatment. In many cases the physician would not be waiting on the lab to run test that might have been done a few days prior or can be used as a comparative to evaluate the change in the patient’s condition. This is invaluable information that is not available now that then requires additional time and test to evaluate a patient’s condition.

The IT system can also keep the provider current on recommended treatment protocols for a diagnosis as established by scientific data. This would be a great help to the provider in prescribing medications, treatment therapies, tests required, and other medical advice. The provider still has the option as to how he/she treats you, because everyone is an individual and some react differently to recommended protocols. Additionally the system should not discourage some clinic experimentation to further enhance treatment outcomes. The system would in fact assist in this experimentation and validate if the modified treatment plan worked and can it be replicated in other similar patients. All of this greatly improves the quality of patient care.

Pharmaceutical Price Negotiation:

Medicare and private mutual insurance companies would be allowed to negotiate price with pharmaceutical manufacturers and suppliers. The patient would be liable for a maximum of say $50.00 for a single drug for a 30 day supply or a maximum monthly out-of-pocket co-pay for all pharmaceuticals prescribed to a particular patient, or a maximum monthly out-of-pocket co-pay for an entire family. For some meds, the $50.00 or less would cover the entire cost, for others Medicare and the private mutual insurance companies pay the difference from their plan coverage. With this said, it is important that the companies receive adequate revenue to continue product research, development and testing. Without this revenue miracle drugs would cease being developed.

Provider Reimbursement:

I have covered much of this subject earlier. All providers would be paid on a DRG model, similar to how most hospitals are paid now. Exceptions for additional payment can be submitted for outliers that are not responding to the recommended treatment protocols as established in the DRG model. The patient would have a co-payment to reduce over utilization of the system for trivial medical needs. For indigent patients, a waiver can be obtained. Preventative health screens would be incentivized by increasing co-pays levels for those who fail to have preventative health screening test and counseling at appropriate times for age and gender. If we can encourage more patients to get screened at certain stages of their life, many diseases can be found early and treated at a lesser cost and better long term outcome than our current sever disease management model. Of course not everyone will live a health lifestyle, but with education and screenings, some behavior can be modified and early detection can be accomplished.

Patients should be encouraged to seek treatment from a primary care provider before self referring to certain specialists or presenting to an emergency department with non-emergent conditions. It has been well acknowledged that primary care providers can deliver most common health care needs at a much lower cost than most specialists with better continuity of care and including the family or other support system to improve the outcome of the patient’s treatment. In this regard, patients who self refer to certain specialists or an emergency department with a non-emergent condition would pay a higher co-pay to that specialist or ER; however if referred by a primary care provider, the patient would pay a lower or no co-pay. This still give patients the option to self refer or save money by seeking care from a primary care provider who then determines the appropriate specialists to refer to or can be treated by the primary care because it is within their level of skill. Referrals would not require pre-authorization as most providers know when to refer and when to treat themselves. I know some patients will demand a referral, and if they are willing to pay the extra co-pay and a referral processing fee to the primary care provider to cover the processing costs, then let them see the specialist they desire. Eventually this behavior for many will change and seeking care directly from their primary care provider would be acceptable. The problems with mandatory primary care visits in the 1990’s is that the whole idea of managed care was new and most behaviors were conditioned to self referral to every medical provider, especially those who never used a primary care provider, thinking primary care was inferior to their specialists. Some of that still exists today, but much less than then. Most have been conditioned to some form of managed care and seeing a primary care provider, if it saved them money, would not be objectionable.

Data collection and analysis:

I also covered part of this earlier. A network similar to the Internet is needed to connect all providers of health care so crucial data can be exchanged between providers and also for claims submission and payment. The less paper created and managed, the lower the administrative costs. Quality of care can be increased by exchanging information between providers, collaborative care can be performed among a group of providers, and outcome data can be collected to determine best practice protocols for treatment and management. As long as the data is secure and an effective oversight system is established to prevent, as best as possible, any abuse of the data. Patients should be in control of their personal data, but not to the limitation of effective medical treatment between providers. If you have health insurance or have Medicare, you already share your personal data with the payer of your claims; they need the data to determine what they will pay, so most of us have very little privacy in this regard already. Obviously employers, life insurance companies, non-authorized family members or anyone not a medical provider involved directly in your care would be prohibited to access the data. This is already covered under the HIPPA laws.

Private Insurance Model:

For those who want to purchase a private mutual health insurance plan can opt out of the Medicare plan. The person would pay the Medicare premium rate as though they were in the plan, but the sum they paid into the Medicare plan in premiums would be sent to the insurance company of their choice. Any additional premium would be paid by the patient directly to the insurance company. The reason for this is that should the private insurance plan be canceled for any reason, the person would automatically default into the Medicare system for care. No laps in coverage. Law would be established that private insurance patients will not receive preferential treatment in obtaining access to providers or services. There should be no additional incentive or benefit to private insurance, other than a broader range of covered treatments for illness or elective procedures outside that which is covered by the Medicare plan. The mutual would be restricted to pay the providers the same DRG rates as the Medicare plan, to reduce manipulation of providers with compensation incentives. Thus if a mutual can be competitive in premium or lower as Medicare, and pay the same for the provider network, then let them try. That would also keep Medicare on its toes to maintain quality, customer service and keep costs in check.

A person using the Medicare plan can also purchase additional insurance for treatments that are not covered under the Medicare plan or for experimental treatments. These would be supplemental plans, much like what is offered today to Medicare subscribers.

This new Medicare plan would be for those under 65 years of age and have a new PART designation, such as Part E. Current Medicare recipients would not have their coverage changed, they would continue to receive Part A & B coverage and a modified part D for medications, to eliminate the doughnut hole and eliminate the private model now used. By implementing some of the cost savings through IT systems and best practice protocols and negotiated prices for medications, covered benefits for this group could be enhanced without additional cost in premium to the subscriber or to any government funds.

The premium would be a payroll deduction for those who are W-2 employed and the self employed would pay the premium with their other income taxes liabilities. An employer may elect to participate in covering all or part of the premium of their employees, but could not mandate which plan the employee chooses; the Medicare Part E plan or a private insurance plan. The employee retains all rights of choice of plan they desire to be covered under. This takes the employer out of the decision process of how your health is covered. If the employer elects to participate, they can use a simple accounting credit to an employee’s premium deduction to reduce the employee’s premium deduction within their payroll records, but the employer would pay the total amount on behalf of the employee with the monthly premium payment to Medicare. The premium paid by the employee and/or the employer would be pre-tax deducted. Unions could act as the facilitator for this accounting process as well and manage the payment for the employer and employee or simply negotiate any employer participation level.

Indigent Citizens:

The premium charged by Medicare Part E would be based on a sliding scale relative to the families or individual’s income from all sources. Government subsidy would be required to cover the shortfall in premium paid by indigent citizens. Obviously this is a big issue regarding increase federal budget demands. There is several taxing option that would have minimal impact on the poor and middle classes and would cover this shortfall. As proposed, a tax on sweet sugary beverages with less than say 70% natural fruit or vegetable juice and any beverage with carbonation, 1 cent on one liter or less and another penny for each additional half liter. These beverages are not nutritionally helpful, so they do not have an impact on a family’s nutritional diet. These beverages are a luxury. A small tax on fast food such as pre-prepared – ready to eat - foods for immediate consumption, with a few exceptions such as a whole roasted chicken from a grocery store. A few cents added to these items would not be enough to stop people from purchasing them, but would generate significant tax revenue. An increase in the income tax of the top 1% of the wealthiest; who should give some back to the community from whom they gained their wealth. With a combination of small taxes on luxury items and the other taxes I proposed here, the total sum would easily cover this premium subsidy needed. In the long term treating this population up front would reduce total cost by treating their health care needs early and avoiding the high cost to government, now incurred by those who don’t seek care until they are in sever distress.

Here are some of the numbers:

Private insurance consumes 15% to 25% of the premium dollar for operating overhead, marketing/advertising, sales commissions, CEO compensation, share holder dividends, corporate taxes, and corporate equity accumulation to raise stock value. Medicare consumes 4% to 5% of the premium dollar. The recovery of this 15 or 25% on say a two hundred billion dollars in premiums would equal approximately 40 billion dollars, but with health care near one trillion dollars, the savings would be more like 300 billion dollars each year. The reduction in redundancy in tests and treatment through information technologies would save another 75 billion dollars or more a year. Negotiation with pharmaceutical manufacturers could produce 150 billion dollars in savings. The change in tort compensation to the model I proposed would produce another 75 to 100 billion dollars in savings. The total sum would easily cover the indigent of our society and reduce your premium to an affordable level relative to income. Most of these figures are guesstimates based on what little information I can gather as a lay person. It would require the CBO to flesh the numbers out.

Personal income for health care providers needs to be realistic to the level of professional services provided and comparable to other professions. This is the only way new providers can be recruited into the system. Congress also needs to provide funding to medical and nursing schools to increase the number being trained. Physicians who must barrow money for their education and during residency training and will end up with several hundreds of thousands of dollars in debt by the time they enter practice. Many have a hard time paying off this debt and still have a family and save money for their kids to go to college without borrowing like they did. When you compare most physicians’ incomes to other professions that require less education, it has horribly declined. Why would someone choose medicine over say law or engineering or business? It has to be economically attractive, as well as self rewarding to help others in need.

To me this is a no-brainer. Why would someone want to support an out of control private insurance industry whose motivation is profit and dividend at the expense of the subscribers? The current model is not sustainable and more and more providers will go bankrupt or leave medicine and fewer of the smartest and brightest entering health care as a profession will only lead to a greater shortage of medical providers, higher costs as demand exceed suppliers of health care and insurance companies controlling access to the dwindling supply of providers. Just like the current oil industry, there will be no end in how high premiums will rise.

NOW IS THE TIME, WE CAN NOT WAIT, REFORM NOW!