Saturday, January 10, 2009

Single Payer Health Care for all Americans.

Health care delivery in the USA is challenged. One out of six Americans has no access to health care because they have no insurance or money , many more millions have some insurance, but do not get it because they cannot meet their deductibles, and even people with Medicare, due to additional high fees, cannot get the care they need. Yet, we spend 16% of our GDP on health care (in 2006, with the population at 300 million, this came to over $2,107 billion dollars or over $7,000 per person per year). By comparison, the Netherlands spend 9.4% of their GNP on health care or 2,900 Euros per person per year. The Euro, at the time, was about at par with the US dollar. And every one in that country was covered and the health care that is being delivered is often superior to what is available in the United States. What do we do wrong?

The answers are at once simple and complex, but the solution to my mind is that the USA should follow the example provided by the Netherlands. Even though the difference in the size of the population and the geographical dispersion is great, the rationale is the same, i.e. that health care is a human right and to provide it, an obligation of society. Also, it is far cheaper to have a Federal government handle it, because there are no high commissions that must be paid, lawyers will not be needed to make companies live up to their obligation, and when the government holds all the reigns, the cost of health care can be kept under control.
Now, in the Netherlands, all residents are obliged to take out the Federal health insurance, which includes all citizens and all legal aliens, except tourists. The system is operated by private health insurance companies; but insurers are obliged to accept every resident in their area of activity. A system of risk equalization enables the acceptance obligation and prevents direct or indirect risk selection.

There are three sources of revenue for the government:
• The insured pay a nominal premium to the health insurer.
• The Health Insurance Act that provides for an income-related contribution to be paid by the insured.
• Employers contribute by making a compulsory payment towards the income-related insurance contribution of their employees*.

Thus, implementing the plan involves collecting premiums from everyone, whether employed, self-employed, enjoying an income from investments or whatever, or having no income. The easiest way is through payroll or dividend/interest deductions. Not everyone will be expected to pay the same amount, but in the aggregate the total premiums should approximate about 10% of GDP.

Perhaps a premium arrangement can be considered as follows, with the amounts of earnings adjusted for today’s realities in the States, for the income levels I am using are strictly arbitrary.

(a) Families with an income of $10,000 per year per person pay no premium
(b) Families with an income between $10,000 and $25,000 per year per person must pay a percentage of their income for premium via payroll taxes or taxes levied on investment returns.
(c) Families with an income of between $25,000 and $50,000 per year per person have the option to pay into the program, their premium being the equivalent to the highest percentage paid in (b)
(d) Families with an income above $50,000 per year per person have no option and are ineligible to participate in this program.

• The program is obligatory to every one living legally within the US, whether citizen or not.
• The program can be carried out by private insurance companies who will be compensated for each policy issued (1% of premium or a fixed minimum).
• The overall administration should be administered by Medicare.
• The total cost of administration should be no more than 5% of total premium income.

The health insurance comprises a standard package of essential health care. The package provides essential curative care tested against the criteria of demonstrable efficacy, cost effectiveness and the need for collective financing. The health care that is provided under this plan is determined by a board of medical experts, but should include preventive care and all treatments including surgery, but excluding electives. Hospital stays should be kept to a reasonable length in semi private, efficient and cost-effective surroundings. Private rooms can be obtained through additional private insurances. Medical appliances and implants should be included, also things like wheelchairs etc. I also would extent this care for those who are staying in our country temporarily but legally (tourists etc.) to a point where they can be safely transported back to their own country for continued care. Reciprocal measures by other countries should be expected.

Health care providers (doctors) must be compelled, as a condition of their license, to contribute a certain number of hours each week to the plan. They should have enough time left to have a private practice.

All health care providers (doctors and nurses) should also be subjected to regular compulsory review procedures to test them for fitness. Those that pass should be immune to legal procedures, thereby eliminating the need for high insurances.

The shortage of health care providers can be addressed by the importation of practitioners from West Europe, India and Asia.

Pharmaceutical research can be carried out by universities and licensed to manufacturers so that the cost of production is well known and the price of product can be controlled by government.

Medical facilities (hospitals and clinics) should be required to obtain licenses for certain procedures (MRIs etc.) to reduce competition and enhance efficiency.

Implementing a plan like this will bring the USA at a par with other developed countries; will make our country a lot better place in which to live, and will enable business to be more competitive internationally. It also will provide a lot of jobs, for care givers and auxiliary industries involved with the delivery of health care as well as save an amount equal to 6% of GDP.

*Unlike the arrangement in the Netherlands, I would consider eliminating the involvement of employers with health care. This will make administration easier for both government and business.

I hope that you give will my musings some thought.

John de Waal.

No comments: