For the past two decades, China and India have become greater economic powerhouses. New technologies and forms of communication have changed the nature of the economy. And world events such as the Sept. 11, 2001, terrorist attacks and the coronavirus pandemic have upended our lives. All the while, Americans have been swept up in tides and waves that are much bigger than we are.
While trying to navigate these difficult waters, Americans have also had to contend with a government that has grown larger and more invasive and massive corporate entities run by oligarchs that collude with government to gain more power and wealth. Because of these trends, it can seem that we have less control over what happens in our own lives and communities than ever before.
Tragically, this is true of one of the most personal aspects of our lives: our health and that of our families.
For those of us who get health insurance in the individual marketplace, the Affordable Care Act has limited our choices of coverage to a small number of nearly identical plans that often have high out-of-pocket costs and narrow provider networks. This means that sick patients don’t get access to the best doctors and are still at high risk of medical bankruptcy despite having so-called insurance from Obamacare. Perhaps even worse, these plans can still cost more than $1,000 a month for family coverage if you make too much to get subsidies.
For those of us who are covered under an employer group plan, we have even fewer choices — just the plan that our employer chooses. Meanwhile, hospital consolidation and a broken marketplace for medical services and products, including drugs, has stolen our wage gains to pay for insurance premiums that grow two to three times the rate of inflation on average.
The combined effect of skyrocketing premiums and out-of-pocket costs in the individual and group marketplaces is that U.S. families must shell out roughly $25,000 of their own money before seeing any benefit from having insurance at all.
Furthermore, there is strong evidence to support that the more we spend on health care and coverage, the worse our collective health becomes. This is because only 20% of health outcomes are driven by what happens in the clinic. The rest are determined by what are called “social determinants of health.” Factors such as good education, access to transportation, good-paying jobs, involvement in civic life, and strong familial and social connections contribute more to a person’s overall health than the quality of care they receive.
This means that the more we spend on health care, the fewer public and private resources we have to fund the things that actually improve our health as a people.
Americans have been powerless to push back against these trends for a simple reason: We do not control our health dollars.
Three-quarters of the private health insurance marketplace is group insurance. This means that human resource managers and union representatives control most employee health care benefit dollars. So, employers have ultimate control of employee health care coverage, not individual patients. Similarly, it is health plans that remit most of the payments to health care providers, not patients. This puts health plans — not you — in control of your care. It is health plans that ultimately get to decide what doctors you can see and what care they can provide.
Since the day that Republicans announced their intention to repeal and replace Obamacare, they have been stuck in a box defined by the left. They have been seeking an alternative to Obamacare when what they should be developing is an alternative to our fundamentally broken health care system. And the fundamental problem with our system is that patients are not in control, because they do not control their health care dollars. Who does? Health insurance providers and government bureaucrats.
Until patients control their health care dollars, they will never be in control of the care and coverage they receive. Until patients control their health care dollars, health plans and providers will be more responsive to the needs of employers and insurance companies than those of employees and patients. Until patients control their health care dollars, they will continue to lose while the massive health care provider-insurance company-middlemen systems win.
Here is an agenda to finally give patients the power they need to wrest control of their health care away from the bureaucrats and plutocrats currently getting rich and powerful on the backs of U.S. patients.
1. Let employees have access to personal and portable health insurance. Employees should have the right to have the money an employer would otherwise spend on a group health premium put into their tax-free health savings accounts (HSA) and be given the right to purchase plans of their choice with those funds. Plans could follow patients from job to job, in and out of the labor market, because they would not be tied to employers. This will require lifting the annual cap on HSA donations, as well as tying the accounts to a high-deductible health plan and allowing that money to be used to pay premiums.
States should also develop pilot programs that allow patients to use the per-person average value of their Medicaid dollars to purchase private plans that they own. This would allow employers and state governments to contribute funds to a patient’s account, and the combined amount would allow for much better care and coverage than the patient would get on Medicaid alone.
2. Give more families access to doctors that work directly for them, not insurance companies or hospital conglomerates. Direct medical care cuts the middleman out of the health care system by allowing patients to pay a flat monthly fee directly to their doctor instead of going through an insurance company. This cuts administrative costs and gives doctors more time to spend with their patients instead of filling out insurance company paperwork. To give more families access to a doctor who works for them, HSA dollars should be allowed to be used for direct care memberships.
3. Let families have access to insurance that meets their medical and financial needs and grants them access to the best doctors instead of saddling them with unaffordable deductibles, sky-high premiums and narrow provider networks. Once we have given patients control over their health care dollars, we must allow for a greater variety of health plans in the individual marketplace — so they have real choices that work for them — including:
- Specialty plans operated by centers for excellence for people with chronic illnesses, so we are making Americans healthier, not just “covered.”
- Plans that “wrap around” direct primary care relationships, so patients don’t have to pay twice for coverage of most of their health care needs.
- Plans only designed to cover routine care and emergency room visits, so younger individuals and families can choose low, predictable monthly expenses without getting hit with unexpected medical bills for typical, but nonchronic, health care needs.
- Indemnity-style health insurance plans that have no provider networks or prior approvals, instead using a price-transparent, cash-based system requiring far less bureaucracy.
4. Let families know the price of care ahead of time so that they can benefit financially from smart choices. We should strengthen price transparency rules and incorporate publicly available and understandable quality ratings. Insurers should also be allowed more ways to share savings with their customers, such as by lowering the next month’s premium if a patient chooses a provider that costs less than what the insurer normally pays.
5. Give patients access to the drug discounts their health plan is receiving. Patients are often made to pay full price for their drugs during the deductible phase of their coverage even though the health plan is receiving significant discounts — or “rebates” — from drug manufacturers. This must be fixed so that patients are paying the negotiated rate for drugs, just like they would for health care services. The Trump administration issued a rule that would have applied this reform to Medicare. It should be codified into law by Congress to strengthen the provision and make it harder for a future administration to undo.
6. Allow patient demand to establish provider supply. Currently, the number of doctors available in a market is dictated by the government through certificate of need laws. Unelected bureaucrats and boards decide whether certain health care facilities can be built in a marketplace. Amazingly, established health providers often sit on these boards, so they can effectively shut out potential competition. This is a guild protection system that prevents competition in health care. It drives up prices and creates long waiting lists to see doctors. States should reform these laws to allow doctors greater freedom to open up practices.
7. Give patients access to 24/7 care in their home. We need a package of reforms to usher in the age of virtual health care. This is of particular importance to Americans living in rural areas where many people live hours away from health care facilities. Many of the waivers issued during the pandemic should be made permanent, and further reforms should be made to allow people to take advantage of what virtual health care can accomplish. For instance, patients using virtual health care should not be limited to doctors who are in the state in which they live. This is an anachronism of non-virtual health care.
In addition to giving patients more control over their health care dollars, we should also encourage employers to take a much more active role in bringing health care costs under control. As health entrepreneur Dave Chase and others have pointed out, Starbucks spends more on health care than coffee beans. General Motors Co. spends more on health care than steel. But you better believe that the CEOs of these U.S. companies would refuse to accept the year-over-year cost increases in those parts of their supply chains that they routinely accept in health care.
Most large and midsize employers in America self-fund. That means they pay the health care bills of their employees directly rather than paying premiums to an insurance company. About half of U.S. workers are on a self-funded plan; they’re just not aware of it because their insurance cards say United, Blue Cross or some other insurance company’s name. This is because their employer is renting the insurer’s provider network. But the insurer is not paying the bills, the company is.
There are many examples of U.S. companies and municipalities that self-fund that have taken advantage of the flexibility self-funding provides. Self-funding has kept their health care expenses flat for years while offering extremely generous benefits for their employees, with low deductibles and out-of-pocket expenses.
One example is Rosen Hotels in Orlando, Florida. It pays about 55% less per employee than the national average and does so with a plan that covers 90% of medications for free, has a low deductible, and offers on-site medical care for employees. Rosen Hotels estimates that over the past 30 years, it has saved more than $300 million on health care expenses. The employees love their health care plan as well. Turnover at Rosen Hotels is about one-third the industry average.
There are many other examples, including the Pittsburg area school system, which designed a health plan that covers its teachers at about half the cost of those in Philadelphia. This is despite Pittsburg having an expensive medical marketplace. The county has taken these savings and invested them in smaller class sizes and higher teacher salaries.
Finally, we must reorient the U.S. health care system to focus much more on preventing disease. Less than three percent of U.S. health care spending goes toward preventative care. This underinvestment in prevention leads doctors and hospitals to “follow the money” to acute care. While this does have some advantages — the United States has by far the best specialists and access to new treatments in the world — it comes at a huge expense in terms of dollars and years lost to poor health. More than 25% of all U.S. health care spending — over $730 billion per year — is spent treating preventable illness. This is a conservative estimate. Studies also suggest that between 25 and 50% of all deaths are due to preventable illness.
This is a very complicated problem with many contributing factors, many of which are lifestyle-related. As conservatives, we should be wary of government solutions that seek to micromanage people’s lives or limit their choices. Still, we should be encouraging payment models in health care that financially reward doctors and hospitals for keeping patients healthy instead of just treating them when they are sick. In this way, lifestyle advice and interventions will be coming from patients’ doctors rather than from the government.
We should also take steps to increase the number of independent primary care physicians available to patients. Over the past several decades, many primary care practices have been absorbed into large hospital systems. Primary care doctors are extremely valuable to hospitals because they are the ones that refer patients to specialists, which is where the money is. This creates a conflict of interest because primary care doctors are the ones best situated to help their patients prevent chronic diseases that require the services of specialists. (There are some exceptions to this general principle, such as in fully integrated health systems that also provide their patients with health insurance.)
There is also promising new science emerging that could help focus our health care system on prevention. As a person ages, their risk for chronic diseases greatly increases. While this risk is exacerbated by lifestyle choices, it is aging that is the number one risk factor for disease. Geroscience is a promising new field of study that seeks to understand the aging process and its connection to the development of many chronic diseases. Research has shown the potential for a new generation of therapies that would help prevent disease before it occurs instead of just treating it afterward.
The potential returns on such a development are enormous. A recent study showed that adding an additional year of healthy life to the American population at large would produce $367 trillion in economic returns for the United States over 10 years. This doesn’t even incorporate intangible returns, like increased happiness and quality time spent with loved ones. Given this potential, the United States should dramatically increase research funding in this field. We also need regulatory changes at the Food and Drug Administration. Right now, the clinical trials process for new drugs is focused on treating disease rather than preventing it, reflecting the overall acute care-focused model of health care in the United States.
Health care is life and death. It is also one-fifth of the U.S. economy and extraordinarily complicated. A lot more needs to be done. We can start now by implementing the steps outlined above to create the foundation for a much different, better health system that puts patients in control instead of bureaucracies. It should be the framework for a Republican health care agenda in 2022 and 2024.