Bart's Healthcare Plan

My friend Bart is a Radiation Oncologist, as well as a character of the first order. He is a very sharp guy, and when he puts his mind to a problem, he generally solves it. Bart has now turned his attention to the insurance and healthcare debate. The original text from Bart's healthcare plan is presented below, and he discussed it (rather briefly) with Ed Schultz on MSNBC. Mr. Obama, you wanted alternatives to your plan for Governmental Medicine; here's a good one:

THE PLAN

1. This plan calls for every family in America to be covered with catastrophic health insurance paid for by the Federal Government. This policy would cover each family from $200,000 to $1.5 million. Statistics suggest it would only be accessed by less than 1.3% of the population. The purchase price of this plan is $60/month/family. Assuming there are 90 million households in America, the price of this would be approximately $5.5 billion.

2. The short-fall incurred by families and individuals from $0 through $200,000 would be covered by a separate policy. This policy would be furnished by businesses, individuals, or in the case of Medicare, the disabled and other retirees, the federal government. The deductible and the terms of the policy would be put out to bid with every insurance company having the ability to bid on the contracts. This bidding process would involve being able to go across state lines and could include large volume discounts. If a company is satisfied with their present agent, they could choose to continue with their own coverage. An example that I use is a $2000 deductible with a maximum exposure to the insurance company of $200,000. Assuming a company has 5,000 employees this policy could be purchased from my local BCBS for $250/month. The savings are realized to the insurance company because their maximum exposure is only $200,000/ policy.

COST

1. The total cost of the catastrophic plan covering every household in America would be approximately $5.5 - $6 billion. The insurance companies would be able to offer vastly discounted rates due to the size of the pool being insured. The insurance companies would profit from this because statistics show that no more than 1.5% of the population would ever use this amount of insurance in a given year.

2. Open competition between the various insurance companies would come into play with the individual policies. They would have to include pre-existing conditions, portability, and could be shopped across state lines. Individuals who could not afford the cost of this policy would be subsidized through the federal government or through tax credits for businesses. Obviously, the provisions and restrictions on these policies would have to be negotiated with the help of the government.

3. If the government was required to pay for 1/3 of the population or 100million people at $250/month ($3,000/year) this would be $300 billion.

NOTE: The cost of Medicare alone in 2007 was $440 billion.

ADVANTAGES

1. Every man, woman and child in America would be covered.

2. The cost of this program would be less than Medicare alone thus eliminating the need for higher taxes or surcharges on businesses and individuals.

3. Insurance coverage remains in private hands and is not controlled by the Federal Government. HR3200 called for the formation of 53 new federal agencies. This would no longer be necessary.

4. Additional savings could be obtained from dismantling some of the bureaucracy now associated with the administration of Medicare.

5. This entire bill could be written in a 10 page document that even the busiest member of Congress would have time to read.

NOTES:

1. The reimbursement of fees to both physicians and hospitals would have to be negotiated with the input from multiple parties. This would include, but not exclude, representatives from physicians, hospitals, insurance agencies, and state and federal governments.

2. It should be noted that the present bill (HR3200) calls for Medicare + 10%. This is totally unacceptable as no hospital or medical practice could remain open with this low level of reimbursement. This would only represent approximately 33% reimbursement of the total charges. Today Medicare's reimbursement rate of approximately 30% of the total charges would only climb to 33% if this was instituted. It takes approximately 45% of total charges for hospitals to remain profitable. An example of this is in a $100 charge for a drug, Medicare allowable is $80 when the actual cost of the drug to the practioner is $90. Without supplemental insurance the physician loses money while trying to help his patient.

3. The reimbursement rate must be sufficiently high to ensure previous obligations made by medical practices and hospitals for equipment, land, andemployees can still be met. It should also be high enough to allow for the purchase of new or replacement equipment.

4. Medicine must continue to attract the best and the brightest we have to offer. This has to be done by making the practice of medicine financially feasible. The government must subsidize the individual to help defray the cost of a medical education. It should be noted in European countries the cost of Medical School is free.

5. Finally, the issue of TORT REFORM must be addressed. I would propose that each case be reviewed by 3 independent physicians. These physicians would then recommend their opinions independently to a Board composed of physicians and lawyers. This Board would then decide (based on the three physicians recommendations):
(a) no case
(b) blatant malpractice
(c) or negotiation.

Caps on the total award would also have to be considered. This would save on insurance premiums for physicians and hospitals as well as help eliminate unnecessary tests performed due to the practice of defensive medicine.