ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, April 9, 1996 TAG: 9604090034
SECTION: EDITORIAL PAGE: A-5 EDITION: METRO
SOURCE: ROBERT BEAR SMITH, M.D.
IN 1994, PUBLIC outcry crashed the Clintons' health-care reform plan, "managed competition." Americans do not want government or third parties to dictate their health care. As part of the mandate, a majority of voters wanted the 104th Congress to change the laws and return the public to the driver's seat in the health-care system.
But Congress has disappointed Americans. It continues to accept the influence of special-interest groups and gives more control of health care to government and third parties, as reflected in the Kassebaum-Kennedy bill and others.
The health-care mess is so complex that it warrants more than insurance reform for its clean-up. "Autonomous care" is the reform model that Congress must support.
Autonomous care (patient-directed and shared risk) features the patient, who plays the buyer in the free market, as the driving force in the health-care system. It combines the programs of self-insurance pools and Health Savings Accounts (or Medical Savings Accounts). A business can set up a self-insured plan administered by itself or by insurance administrators under contract, with input from employees in designing the plan. Small companies can organize self-insurance pools through their business and trade associations.
A company sets aside a portion of its employee's health-care dollars in a Health Savings Account, and provides its employee with an insurance policy with a deductible in an amount equal to the employee's share in the Health Savings Account.
The account belongs to the individual employee and provides a financial incentive to the employee seeking health care. Individuals enrolled in the autonomous-care plan will become informed and smart buyers in the health-care market; as buyers of health care, patients will force hospitals and health-care professionals to compete among themselves to upgrade quality care and to contain costs. True market forces will control the process, instead of relying on costly middlemen and expensive administrative costs.
Autonomous care can also work well with Medicare and Medicaid programs. For its Medicaid programs, the state would place 20 percent of the Medicaid fund, after taking 3 percent to 5 percent of the fund for administrative costs, into escrow as co-payment accounts (as HSAs or MSAs) and inform each Medicaid recipient of his or her individual share in the accounts. The rest of the fund would be used as a general fund or pool.
Recipients would visit a family physician, gynecologist or pediatrician twice or three times annually at no cost to their co-payment account. However, using other health-care services, including hospitalization and transportation, would require a 20 percent charge of the total reimbursement to his co-payment account until the account is exhausted for that year.
The pool would be totally responsible for the charges for further services during the year. At the end of each year, a percentage of the balance of the individual's co-payment fund would be rewarded to that recipient for staying healthy during the year.
Under autonomous care, the state would save money on the Medicaid program without having to deny proper care to the recipient. Moreover, autonomous care encourages recipients to choose healthy lifestyles and to practice preventive care. With modifications, autonomous care would also save money for Medicare programs.
The goal of autonomous care is to expand its programs at workplaces into a combination of publicly controlled (not government-controlled), nonprofit (not a wolf in sheep's skin) regional insurance pools and HSAs (MSAs), and to underwrite portable and individualized health-insurance policies to every citizen within the regions, regardless of social, financial and employment status. The pools would accept beneficiaries of Medicare and Medicaid programs. The pools would function exactly as mutual insurance pools do, and would dictate neither to patients nor to health-care professionals or hospitals. The pools, as the consumer advocate, would educate patients about how to look for quality care at low cost, and publish fee or charge schedules for their subscribers in the region.
However, they would leave shopping to the patients, who would have a keen interest in seeking high quality and low cost in needed care. Under the public scrutiny, professional fees and hospital charges would be reasonably reduced by competition.
Now Congress must take action to sensibly reform the current insurance system. Before "guaranteeing" the American people affordable and accessible quality health care, Congress must do away with bureaucratic and unfair laws and regulations, return all health-care decision-making to patients and allow the free-market system to work between patients and health-care professionals.
Tax laws more than 50 years old favor employer-sponsored health plans. These laws are unfair to citizens who are self-employed, or self-sufficient but unemployed, and also are obstacles to reducing the uninsured population.
More important, the faulty tax laws have transferred the individual's financial incentive and decision-making power, which are needed in the free-market system, to third parties. They have insulated the American people from the direct effects of the escalation of health-care costs, have fueled the abuse of health-care resources and are responsible for today's culture of dependence.
To restore individual responsibility, the tax laws must give all Americans equitable tax treatment of health-care expenses, regardless of employment status. The tax laws could still allow employers to earmark a set amount of compensation to employees as tax-free health-care expenses, which either must be credited toward the individual's allowed tax-deductible health-care expense or become taxable income to the individual.
Congress must also repeal, amend and enact laws to facilitate creation of HSAs or MSAs and establishment of self-insurance pools at both the workplace and the regional level. It must redefine nonprofit status, and restrict the availability of the status to organizations established for charitable purposes or public advocacy. The laws must prohibit a nonprofit organization from converting to for-profit status or placing its assets for sale.
Robert Bear Smith, M.D of Portsmouth is honorary chair of the Coalition of the Public and Physicians for Sensible Health Care Reform, U.S.A.
LENGTH: Long : 111 lines ILLUSTRATION: GRAPHIC: D.B. JOHNSON/L.A. Times Syndicateby CNB