THE ENTERPRISE
Since I'll be taking a bit of R & R this weekend, THE ENTERPRISE will be a bit early this week. The topic is so important and timely, that it just can't wait another whole week. Here goes.
Many of you know that I don't support government intervention in a lot of areas since the government has not proven to be a very effective "operator" in many cases. That said, the current national health care problems are huge, and only through some level of government intervention, can these escalating health care costs and insurance premiums be reined in. One place where the government does a very cost effective job (spending less than half the amount as a % of costs) is in Medicare administration vs. the costs of private health plan/insurance administration.
I have a simple proposal (that means simple to state, not necessarily simple to do) that will dramatically improve the cost and quality of health care in the US. Note: Since I am not a "health care expert" some "tweaking" of these might be required, but the core ideas are valid and powerful.
If you read this and think these are a good idea, please feel free to forward it on to government officials or others who are in positions to push these initiatives.
There are only 3 steps to the first phase of the plan and they are these:
1. A Drug Advertising Ban: Prohibit drug companies from advertising prescription drugs, just as cigarette companies are prohibited from advertising cigarettes. Part of this mandate would require that major drug companies disclose their ad spending fot he past 4 years, and over the next four years that they be required to spend an equal amount of money on 3 things (call it a special "tax"): 1/3 for medical records storage devices, 1/3 for price reduction--across the board--for its drugs, and 1/3 to be distributed to shareholders in one-time dividends each year or reinvested at the discretion of company management, to compensate for earnings lost due to any revenue drop from the advertising ban. Non-prescription drugs could still be advertised as normally. Any drugs imported into the US from Canada (or elsewhere) would be charged a tariff in an amount equal to the percent of sales that US drug makers have historically spent on advertising, and the tariff collected would be diverted to the same uses. Illegal importation would be much more rigorously policed and penalties assessed to violators--both sellers and buyers. After 4 years, the ad ban would remain but private companies would regain total control of the uses of revenues, spending, etc.
This would curtail the practice of patients going to doctors and demanding a particular prescription drug in lieu of an equally effective but lower cost treatment including generic drugs and lifestyle changed. It would also remove the primary motivation for drug companies to falsify or obscure drug test information.
2. Universal Price Disclosure: Medical institutions must post in a prominent place the prices charged for their most frequently used services, in a menu format similar to restaurants, divided by category of care. If appointments are made in advance, the base cost of the visit must be disclosed at that time. They must also disclose to patients the estimated costs of other procedures, tests and treatments similar to a truth in lending disclosure. Patients who have health insurance must be advised by the medical institution AND the insurance carrier of the magnitude of negotiated discounts from listed prices, similar to "sale prices" in retail stores. Patients must be advised of which is the least costs of equivalent treatments, such that they can choose among several similar treatments of equal efficacy, but that differ in cost. (e.g., open vs. closed MRIs). Any patient, upon admission, would be provided with the average per-diem cost, with all charges included, of a stay in a hospital or similar medical institution, with options on the type of room and any other optional charges for non-medical necessities such as cable TV, phone, etc. The choice would be the consumer's.
This would make consumers aware of, and have some control of the costs they are incurring, regardless of who pays them, and provide them with information about lower cost options. Once in place, insurance companies and other 3rd party payers could provide motivation for users to economize such as they do with generic vs. proprietary drugs.
3. A Health Records System & Portability: Initiated by Medicare as a condition for medical institutions, and then after a period of time, extended to all medical providers would be a standardized medical records data format, devised by a blue-ribbon panel of private sector IT companies, this would require that all medical records be digitized and stored. Each patient would receive a key-chain size flash memory device, private records could be password protected with a universal-format password made up of bits of personal data--such as first two characters or birth month, last two characters of birth year and last 5 digits of Social Security number--changeable at the request of the user by anyone who has a computer with a USB port and a web browser. The information loaded by medical care institutions would be "read-only" so individuals couldn't meddle with the records. The first device would be "free," paid for by money diverted from pharmaceutical advertising. If it was lost or damaged, consumers would have to pay for the second one, but not over $25. The purchase volumes would drive down the cost of such devices, perhaps to under $10. All medical records going back one year would have to be digitized at the expense of the health care institution, for which it would receive a partial reimbursement each time the devices were used from the patient's insurance carrier, in the form of a surcharge. Individuals would be permitted to pay to have their personal records going back further digitized and stored at a specified cost per year. New businesses would emerge to perform such jobs for health care providers.
This would alleviate a huge amount of administrative inefficiency, reduce errors due to lack of personal history/information and make accessible medical records to establish the use of AI (artificial intelligence) systems to avoid drug interactions, limit medically high-risk treatments that were inadvertently prescribed, and permit portability of records as a patient chose to "shop" medical institution for the best value treatments. A huge additional potential range of uses of this data would emerge, accessible to individuals using their USB devices, potentially creating whole new businesses.
This won't solve every problem of the health care system in the US, but it will take a giant bite out of costs and inefficiency. US consumers have proven their ability to shop wisely for the best value, hence the rise of chains like Wal*Mart, Costco, Internet merchants and others. Lab tests which can be run at huge discounts in a drive through lab vs. a high markup coming from a clinic would be many consumers choices for simple blood testing. Other examples are too numerous to list here.
There is it--only a first step--but one which provides platforms for next steps. Controversial? Sure! Necessary? you bet! Right now, all anyone is doing is wringing their hands. It is time for action.
Best, John
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