Health Care Reform

I believe our health care system and its challenges need to be addressed in a new way that empowers our strongest asset in controlling the spiraling cost of health care: the U.S. consumer.

As you know, health care costs in the U.S. are increasing over 30% faster than the rest of the economy and will consume 17% of our Gross Domestic Product by 2011. [The U.S. spends less than 4% of our GDP to provide for the national security of our great nation.] This level of spending and inflation makes our current system unsustainable and real reforms are going to be necessary as our population ages.

Since World War II, when employer sponsored health care became a more widely offered employee benefit, spending has increased from 5% of GNP to 16% today. Systematically, the eye of the health care consumer has been removed from the market place. Whether it is employers offering a single insurance option or the government making health care choices on behalf of the elderly and the poor, consumers have been increasingly removed from the market place. The result has been a system with costs increasing at rates that are neither sustainable nor practical.

The solution is freedom for the consumer to pursue their own health care choices. Therefore, I propose three major reforms that will bring the consumer back into the health care equation: 1. freedom to buy health insurance across state lines; 2. freedom to make informed health care choices; and 3. freedom to innovate to save money and improve medical outcomes.

Buy Health Insurance Across State Lines

Under current law, individuals and small businesses are required to purchase health care plans that are offered in their state of residency. Therefore, the health insurance customer is held hostage to state legislators and regulators which impose an increasing number of mandates on the marketplace. For example, the average individual policy in the state of New Jersey costs $6,046 per year for a family of four, while a similar policy in Iowa costs only $1,965. This disparity in health insurance premium costs can largely be attributed to the level of mandates imposed by the respective states. New Jersey insurers are required to cover 41 mandates (including chiropodist and occupational therapists) versus the 23 mandates imposed by the State of Iowa. Families and small businesses in New Jersey should be allowed to shop across state lines for the health care policy that best meets their needs; avoiding systems that encourage mandates.

Make Informed Health Care Choices Through Public Disclosure

Today, when a consumer decides to make a purchase, for example a new car, they are empowered through easy access to information to find the best deal. With just a couple of clicks of the mouse, they can find clear and concise information on the vehicle including: price, reliability, upgrades, customer reviews and maintenance costs. Sadly, this same level of information is denied those seeking to purchase health care.

This lack of available information keeps the consumer/patient hostage to the false market that has been negotiated between the hospital and the insurance company. Consumers should be permitted to find the highest quality of care for the lowest price. Therefore, hospitals and other health care providers should be required to place their fee schedules on line or otherwise make them readily accessible for potential consumers. This return of market forces, open competition and empowered consumer will result in falling health care costs and rising care quality.

Innovate In Order to Save Money and Improve Medical Outcomes

Over the past 30 years, eight of the ten most important medical breakthroughs originated in America. The United States is home to some of the best medical minds in the world, yet government driven health care fails to reward innovative thinking and new methods in hospitals.

The Government bureaucracy that is Medicare determines the means by which a patient will receive care by mandating a payment scheme based on a particular treatment protocol. Should a doctor find an equally effective and less expensive manner by which to treat a patient that further involves less time in the hospital, the reimbursement rate for the process is significantly less and, in some cases, does not cover the total cost of care. Therefore, government management actually encourages expensive and more ineffective care over better, less expensive alternatives.

Unfortunately, Medicare is slow to implement these innovations in protocols. Therefore, I propose the creation of four test hospitals (1 university hospital, 1 public hospital and 2 community hospitals) that will, under the direction of an established commission, be deregulated institutions that will safely implement new procedures and cost saving measures within a test hospital in order to determine and implement system-wide protocol improvements. By agreeing to participate, Medicare will cover all patient expenses not covered by insurance, including all revenue loss. In return, the institution will agree to strict oversight by the established commission and follow all protocols. This pilot project will bring innovation back to health care delivery and identify in a rapid, safe and appropriate manner, changes in the system that will increase health care quality and reduce costs.