Today, my daughter, my parents and I drove to the hospital in Boulder to see the latest member of our clan. My brother and his wife just had their first child and it was time to go a visiting. On the way back, my Mom talked about Presidential Candidate Carson’s idea for health care savings accounts. What was interesting was why the idea appealed to her. When she was growing up, most people didn’t have health insurance. You just paid out of pocket. If you can pay for health care out of pocket, then a savings account is a great way to be prepared.
My Dad remembers leaving school and walking to his grandfather’s house where he read to my Dad. His grandfather could do this because he was a Veterinarian. Veterinarians, and Doctors, often worked for themselves out of their homes. Doctors could even make housecalls because they knew everything they needed to know and could carry most of their equipment in a bag.
But, medicine no longer looks like that. One generalist with a handful of tools has exploded into miles of specialities and catalogs upon catalogs of medicines and equipment. That explosion has increased life spans but part of the price is equipment and medicine that costs more than most people could ever pay for out of pocket and sometimes more than the specialist’s price new sports car.
Doctors don’t make house calls any more because that entire model of medicine is dead. We replaced it with a model that provides the capital to purchase the equipment, hire the list of specialists and build the buildings to house it all. We replaced craftsman with businesses: we corporatized medicine.
Recently, cash-only medical practices have launched. If everyone in the U.S. switched to cash-only practices and paid for health care out of pocket, they would each pay an average of $10,000 per year. Ye average sized family would spend $40,000 every year on medical care. A lot of Americans would need raises; big big raises.
One way to answer “Why don’t doctors make house calls any more?” is to say “Because you probably can’t afford the three that do.”
The debate on Health Care has clearly been hated. My previous post on the topic develops an idea I had discussed with my Dad. Generally his views are on the Conservative end of the spectrum and (suprisingly to me), he thought it was a great idea at the time. Even more interestingly is that (at least as I read the tea leaves of Obama’s recent speech before Congress and the discussions afterwards), it looks like a variant of my idea will be part of the final bill. Tis interesting…
I’ve been meaning to flesh this post out some more… since October. Instead of holding it up any longer, I’m going to release the draft version (right down to references to Presidential Candidates)…
Both Candidates for President have health care proposals (Obama and McCain). But, the genesis for this blog was an idea for a way to provide health insurance for everyone. We have a fairly straight forward program called the Earned Income Tax Credit that helps workers at the bottom of the income scale. The same concept can be applied to health care. At it’s core, the Federal Government would provide assistance to pay for health insurance based on income. The less people make, the larger the assistance.
Beyond providing assistance, the Federal Government’s would carry out several functions. First, the Government would set minimum guidelines for coverage. Second, the Government would monitor the insurance provider to prevent abuses. Third, the Government would require participating companies to write policies on all comers regardless of pre-existing conditions. More on that last point in a moment.
Fourth, the Government would provide a website that would allow the public to locate insurers, compare prices, post comments about insurers and file complaints. In many ways (besides the fact the Government would not be making money off of it), it would resemble an Amazon.com for the health insurance market.
The Government would not dictate absolute prices on policies. If the program is structured properly, the market should manage prices quite nicely.
It would probably make sense for insurers to have a second category of policy for high-risk individuals. If that were allowed there would have to be standard rules on what qualified as a high-risk individual, the amount provided to the individual by the federal government would be adjusted upward and, most importantly, the price of high-risk policies would have to be within a certain multiplier of the price of a standard policy. In essence, insurers would be incentivized to take on high-risk individuals because they would both receive higher payments and have access to a large pool of customers that they would otherwise not be able to access.
Of course, the plan would have to be structured so that employers would be encouraged to continue to provide health insurance. Existing tax benefits to employers should be maintained. Employers that choose to not provide insurance could possibly be taxed in proportion to worker’s salaries. Thus, an employer with mostly low wage workers (and presumably a very low profit margin) wouldn’t be penalized for the business they’re in. Conversely, companies with primarily high salary employees for which health insurance is (relative to salaries) a small cost would have an incentive to continue to provide health insurance for their workers.