Medical service providers are just that, service providers; and in that regard are no different in the market than automobile mechanics whose average income depends on the average income in the workers (their clients) in their society. Every country, though, has figured out some way to pay medical service providers more than car mechanics. That way the poor get some access to the care that only the rich can afford. Calls in the USA for market-based reforms to the health care affordability problem conveniently overlook this basic fact which is not surprising considering the long oligarchic traditions of the USA.
Instead of floundering in our traditional economic cynicism we could undertake simple and effective governmental reforms in order to keep health care spending down to a reasonably low percentage of GDP like every other developed country in the world. No constitutional roadblocks would have to be overcome. Government established systems don’t need to unconstitutionally block medical service providers from contracting with patients in whatever way they wish. Well-structured public systems will just make it unnecessary and uneconomical for them to do so. As the reforms listed below are read, please reserve judgement as to their political viability until you get to the end.
1. Lower Medicare age to 55. This would most efficiently remove the most difficult to insure group from the reform process faced (as suggested at item #3 below) by the individual states.
2. Simplify the Medicare benefit structure so that there is one simple annual deductible for all parts of Medicare (A,B,and D) based upon a progressive income and asset test; and also re-set the Medicare Part B premium so that it is also based upon a progressive income and asset test based.
2.1 This would make the need for Medicare Advantage, Medicare Supplement, and Medicare Prescription Drug plans obsolete; saving the government and consumers hundreds of billions year in and year out.
2.2 Some percentage of current insurance workers could be leased by current insurance companies to the government during a transition phase, while those losing their jobs could get direct transition assistance.
3. For everyone through age 54 each state individually or in concert with other states could adopt some form of the proven models provided by other developed countries. Large states, who have larger populations and economies than many model countries, have the tax base and economies of scale which should make it easier to establish such model systems compared to smaller states. Therefore, if smaller states run into difficulty they should be allowed to join together with other small states, whether regionally proximate or not, to adopt models that work best for them as a group.
I believe these reforms could be politically viable because they feed into hot button issues of both the right and left. Right wingers in red states would like the individual state control aspect and burn themselves out on pushing for a return to a cash-based system for the poor and concierge plans for the highly paid employees and wealthy individuals which will ultimately prove economically and politically unsustainable compared to the socialistic systems established in the blue states. Left wingers in blue states will jump at the chance to bring forth successful plans and thus help the blue brand and motivate blue voters nationwide. Big health insurance companies would continue to have an advantage over smaller firms as they find a way to profitably downsize to basic employee leasing enterprises that provide administration services to Medicare and the state model plans. They, like all the companies in the healthcare market, would be faced with the need to either adapt or die. I believe the big companies seeing the writing on the wall would actually support the reform process since they would be in the best position to morph into profitable survivors of the process. Big Pharma…well big pharma would take a hit, but so be it…they will just have to deal with bulk discounted sales to Medicare and the state plans who in turn can just have the discounted drugs fulfilled through the existing pharmacy outlets.