Plato said that the first step in logical inquiry is the Sophistic postulate: what is not-X, exists. We need to postulate that what we don’t know exists; else, we can’t ever learn or inquire. What we know is X; what we seek is not-X.
The orphan concept in politics is the public interest. Group interests are known: interest groups push their interests with favored policies through lobbyists with campaign cash. Yet, each policy issue does have some formulation best suited to the public as a whole. That formulation is the public interest.
False claims to the public interest by narrow interests as their favored policies leave the public interest an orphan, and make us doubt that it exists. But what is not-X does exist, and we need to look for it.
Politicians who default to tired but inflammatory catch-alls, like “socialized medicine” or lamely lament putative legislative vote counts, betray their constituents, particularly badly concerning health care: legislation on this issue means life or death for hundreds of thousands of people. This is playing cynically with our lives.
What is the public interest in health care reform? We have to put aside all of the narrow interests claims: by the health insurance industry, the physicians, and the hospitals.
We have to disregard all of the posturing by Democrats and Republicans, and all of the prospective vote-counting in Congress. Narrow interests, posturing and vote-counting obscure what we need to find, a public interest health care policy formulation. We need to inform policy formulation with technical knowledge of the complex health care system as it exists now.
I have not heard analysis by media or party voices informed with technical knowledge of the subject (they don’t know what they are talking about), while the partially technically knowledgeable voices (physicians, hospitals, insurance companies) are intentionally distorted to protect their huge financial stakes.
The public interest that emerges is simple, quick and easy. There is plenty of money in the system now. The public interest turns out to be not a quagmire, dilemma or impasse. The Healthy Americans Act below is a public interest health care reform policy. I would like to see it called the Kennedy Healthy Americans Act:
THE HEALTHY AMERICANS ACT
WHEREAS, 47 million Americans who lack health insurance suffer unnecessary morbidity and mortality; and
WHEREAS, the United States annual federal budget deficit is a projected 1.3 trillion dollars; and
WHEREAS, the health care system takes nearly a fifth of United States gross domestic product, while quality of care indicators, including 100,000 iatrogenic hospital deaths every year, place the United States system lower in outcome quality than other countries who spend less; and
WHEREAS, the commercial and government health encounter billing and payment segment of the health care system wastes one-third of health care dollars; and
WHEREAS, the wasted one-third of health care dollars is available to finance reforms of the health care system including care for the 47 million uninsured, while reducing total health care gross domestic product cost; and
WHEREAS, the change to eliminate wasted dollars can be done basically overnight, with the creation of a flat national trust in the place of commercial and government billing; and
WHEREAS, this is a national public safety emergency;
WHEREFORE, Congress enacts the following, to be called the HEALTHY AMERICANS ACT.
1. Free choice principle. Upon implementation (“day one”) any person can visit any health provider for any service without any financial transaction occurring, subject only to normal scheduling. No government regulation of any kind occurs to limit utilization, access to physicians, access to hospitals, or courses of treatment.
2. New revenue capture principle. The Healthy Americans Act creates a Trust. The Trust and health care will not be financed by limiting expenses through utilization control of either episodes or categories of health care. New revenue for actual care will be captured by entirely eliminating health care encounter financial transactions, including eliminating all health insurance organization activities, all fiscal intermediary activities, and all provider billing and carrier billing processing activities. This is estimated to save one-third of all health care system dollars.
3. Flat organization principle. The oversight and finance of health care delivery is the responsibility of the Trust, an authority the activity of which is limited to finance and assets, and not to control of utilization, which by prevailing international experience should take less than five percent of total dollars.
4. Standard of care principle. Health care in individual cases is by medical or surgical standard of care. Utilization decisions for courses of care in the top tenth percentile of resource use (now called “cost”) are determined when necessary by local standard of care decisions.
5. Overnight implementation. A minor bookkeeping change occurs on day one, health insurance premium payroll deductions continue as debits from employee salary payable and move from credits to employer health insurance expense to credits and actual bank deposits (like Medicare tax) to the Healthy Americans National Trust (the Trust).
6. Continuity principle. No change in revenue to providers or resources for payment of expenses occurs in year one; in year two, volume-based revenue and expense payments are to be phased in from year one levels.
7. Prevention principle. Prevention of disease will be increased in three ways, first, by removing the financial volume and intensity incentives which now inflate allotropic (medical) health care; second, by providing early care and eliminating more costly later care; and third, this Act authorizes and directs the Trust to take cost and outcome directed disease preventive and health maintenance steps.
8. The Trust. On day one, Medicare, Medicaid, veterans’ health programs and all other state and national health programs, along with current commercial health insurance programs, terminate and consolidate in the Healthy Americans National Trust, and minor bookkeeping changes transfer funding from all sources to the Trust.
9. Encounter reporting and volume principle. Existing Medicare reporting systems are modified for inpatient and outpatient care episode reporting to the Center for Medicaid and Medicare Services, which is renamed and modified to become the Healthy Americans National Trust administration, on the model of the United States Postal Service. In the year beginning day one, the Trust develops a utilization profile for each provider who receives payments from the Trust. In the year beginning one year after day one, the Trust phases in provider salary and expense payments proportionate to volume, subject minimum and maximum payment standards it develops.
10. Revenue continuity and equity principles. All health workers are paid starting day one from the Trust at their existing salary or wage level the day before day one. Existing Medicare physician payment equalization formula are to be used by the Trust to set equitable pay levels, for example, Diagnostic Related Groups for hospitals and the Resource Based Relative Value Systems for physicians. The base salary formula is: specialists and surgeons $200,000 per year before taxes and deductions; primary care physicians $150,000 per year; other health care worker salary levels are set in relation to these levels. This salary management will create cost savings.
11. Health care episode divorce from financial transactions and new revenue capture. All billing of any kind ceases on day one; in its place, providers report basic encounter data electronically on existing internet based systems. Non-salary provider expense is paid at the level of the day before day one by the Trust. The year beginning day one is a transition year from existing expense payment to a cost-based payment, to be established by the Trust. Expense payment formulae developed in the year beginning day one are to be implemented in the year beginning one year after day one. This will create substantial new revenue from billing activity in the range of one-third of current health care system dollar volume.
12. Elimination of the health insurance sector and transition assistance. All commercial health insurance providers and all Medicare and Medicaid intermediaries cease health insurance operation on day one. In the year beginning with day one, the Trust takes authorized means to provide transition assistance to these firms and employees, with targeted transition of employees from fiscal to health provider occupations.
13. Assets and equity. All hospitals and other institutional health care facilities become either assets of the Trust or local health authority assets, with local community boards, on the model of the Denver Health Authority. Privately owned hospitals also become assets of the Trust or local community health authorities, and investors or owners receive long-term tax credits in return for their assets.
14. Health care worker post-graduate training expense is borne by the Trust, and health care worker career income reflects the public contribution to training.
15. Other health institutions such as durable medical equipment suppliers, home health agencies, medical transportation services and pharmaceutical manufacturers are reconstituted, details to be developed.
Mike Kiley is president and CEO of Colorado Alpine Advanced Trauma Care Project, Inc., a health care reform project and retired health services administrator. EDITOR’S NOTE: This is an online-only column and has not been edited.
