Goodbye Barry - Welcome Home AMERICA!

Monday, December 28, 2009

Health Care Reform for Dummies - Part II

This is my very own improved plan for health care management in the United States of America...

Government regulation is probably needed in the following areas:
1. Medical Equipment Manufacturers - Regulation is needed to reduce the obscene profits on medical hardware. Profits in the $800,000+ range for one low-end Magnetic Resonance Imager (MRI) have surpassed reasonable profit, and entered the realm of profiteering. R&D and associated production and marketing costs should be amortized over the estimated life of the equipment - let's call it 10 years. This would eliminate the temptation to attempt to recoup all expenses in the first 10 units sold. All expenses in R&D, production and marketing would be tax deductible for the corporation during that 10 year period - but the corporation would not be tax exempt.

2. Medical Supplies Manufacturers - This would include expendable single-use supplies such as bandages, tongue depressors, disposable hypodermic syringes, catheters, cast materials, etc., and would be regulated essentially the same as above.

3. Pharmaceutical Manufacturers - No more gouging the American people. If product "X" is only worth $3 in Bangladesh, Indonesia, India or Somalia, then it's only worth $3 on this planet. Regulation would be essentially the same as #1, above.

4. Hospitals - This is basically the retail part of the business of medicine. The hospitals are not only saddled with the expenses forced upon them by equipment, supplies, and pharmaceutical manufacturers, they have the additional overhead expenses of personnel to cook, clean to hospital standards, and provide security within the boundaries of the hospital campus. Then there are the professional costs and wages. The average MD in the USA makes $171,000 per year. That's good money. The average nursing school graduate is paid an average of $22 per hour during the first year, and by the fourth year can be earning $25 per hour, average. To offset their overhead expenses hospitals charge about $5 for a band aid and $8 for an aspirin, and about $1,000 a day for a room! Hospitals should be regulated insofar as charges for consumables (supplies and pharmaceuticals) goes. Cost + 40% is the generally considered the retail standard markup, and that should work for hospitals too - as long as the rest of the medical system is working as it should.

5. Doctors - Doctors should be permitted to practice medicine using their best judgment, and nobody other than their immediate supervisor or the medical licensing board should be allowed to interfere. Doctors should be protected against outrageous lawsuits by capping suits against medical professionals at $500,000. Having a ceiling on malpractice lawsuits should reduce a doctors cost for malpractice insurance, and allow them to charge substantially less than $10 per minute for their time. Many doctors are paying $150,000-$200,000 annually, and a few pay even more for insurance. However, the majority find themselves in the $60,00 per year category. Now we have a chicken-egg-chicken situation... are doctors paying exorbitantly high premiums for insurance because they charge a lot for their services? Do they charge a lot for their services because their insurance is so high? Do they pay a lot for insurance because they may be sued for ridiculous amounts of money? A doctor's malpractice premiums are probably outrageously high because they do get sued for ridiculous amounts of money - by US! We are the primary driving force behind the exorbitant cost of health care. Lawsuits, non-payment for services, equipment costs, student loans to cover outrageous medical school costs, etc. all figure into the equation used to determine what 10 minutes of MD time is worth.

6. Health/Medical Insurance Companies - Most insurance companies are publicly traded, which means they are listed on one of the several stock exchanges, and are available to individuals, consortiums or other corporations to purchase stock. The insurance companies, as do all publicly traded corporations, have an obligation to their stock holders to show quarterly profits and pay dividends to the investors based upon the amount of money they have invested. Adding known "risk" to the group comprising policy holders increases the possibility of payouts and reduces the probability of producing those dividends. The uninsurable were classified that way for a reason - RISK! Insurance companies like to take money, and hate to part with it. If the insurers were forced to accept previously uninsurable clients, one of two things would have to happen:
a. The risk presented by the uninsurable would have to be paid for with higher than normal premiums... so high they would undoubtedly be unaffordable to 90% of those desiring insurance coverage, or
b. The premium rates of all insureds would have to be increased to offset the potential for increased losses by the insurance company.
Health/Medical insurance companies must be allowed - better yet, make that required - to sell policies in all 50 states, thereby increasing competition, and through that competition for the available health insurance $$, lower the costs of health insurance. In order for this plan to be cost-effective all the elements must come into play. And, sadly, the uninsurable must remain the uninsurable. Let the doctors and hospitals do a little pro bono work now and then, and make it completely tax deductible.

The "bottom line" is:
It is human GREED that keeps our health care costs in the stratosphere.

(Oh, yeah... and I did this with about 2,200 pages fewer than Congress!)

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