How to Reduce the Cost of Health Care by 45%
The solution is comprised of two very simple key actions:
1. Apply tort reform to eliminate malpractice premiums for all providers of out patient services using a commission to better police the medical industry.
Definition: Tort Process Reform or Tort Reform,
A tort is a non-criminal wrong, (such as falling down the stairs at work), where an injury exists. The current process is to sue for dollars to offset the cost of injury (loss of income, unreimburse medical bills, plus pain & suffering). There are currently no limits.
The reform of this tort process would be the implementation of a fixed schedule of benefits as opposed to our present “the sky is the limit approach”.
We believe that tort reform is much simpler than everyone thinks. We point to the fact that workmen’s compensation is actually a process of tort reform where the employee is protected by a schedule of fees and does not have the right to sue the employer. Therefore, since we have an excellent working model of tort reform, why recreate the wheel-just copy it and retrofit it to our health care system.
In addition, with the elimination of malpractice premiums on outpatient services, physicians will be able to return to private practice, making accessibility to medical care easier. With more physicians returning to private practice and with the elimination of insurance company involvement in out patient services, we will see physicians establishing office visit rates at a price consumers can afford.
Install a system of tort reform for the medical industry, and you will not only remove the incentive to exploit every medical mishap for every dollar possible, but you will also eliminate malpractice premiums which will result in an immediate 20% reduction in the cost of health care.
2. Narrow the range of covered medical services to eliminate the use of insurance on routine office visits, while expanding the use of health savings accounts (HSAs).
Insurance was originally established to guard against risk of financial devastation resulting from accidents and debilitating diseases such as cancer. Routine office visits are not a risk; they are a common event, a certainty. To fund office visits through insurance premiums is simply a more expensive way to pay for them. With so many Americans using high co-pays and HSAs to pay for routine care, it is not a big leap to simply exclude these services from insurance reimbursement. HSAs allow the individual to use tax exempt dollars to pay for medical services even if those services are not recognized as covered health insurance expenses. In fact, by excluding this level of service from being eligible for insurance reimbursement we eliminate a layer of administrative service and expense both for the insurance carrier and the physician’s office. A reduction in administration would have an immediate and dramatic impact on the cost of health care, as 25% of every dollar that currently flows through an insurance company is eaten up in administrative costs.
To use insurance to pay to see a doctor for a sore throat, sports physical, or annual routine exam does not shield the patient from the cost, but only the knowledge of the cost! It is absolutely necessary for individuals to have an awareness of the cost of medical services.
Eliminate the involvement of insurance carriers at the routine care level of service and you have not only removed the incentive to exploit the system, but you have also eliminated 25% of administrative costs on those services.
By implementing these two actions, Americans should see a reduction in the cost of health care of 35% to 45%.
Health insurance will only become less expensive when we place the individual in a position of bottom-line responsibility.