August 27, 2012

This proposal just crossed my desktop:

There are currently 60 million participants in the Food Stamp program (SNAP), all low-income shoppers who can enter any supermarket in America and buy almost anything the facility has to offer. They do so by either trading their government vouchers for a limited amount of low-cost, essential goods or by supplementing their own cash with the vouchers to buy higher-cost goods. Every good is bought at market price, ensuring that supermarkets cover the costs necessary to stay in business.

Unfortunately, we don't allow Medicaid enrollees the same privilege. Basic health services provided by MinuteClinics cost more than twice as much as Medicaid pays. Because Medicaid alone would not cover health costs, most MinuteClinics refuse to accept Medicaid. Low-income families who want to receive basic health services must pay full price instead - a price most of them can't afford (they are on Medicaid after all). If low-income families were allowed to supplement Medicaid with $30-$50 of their own money, MinuteClinics would happily accept both Medicaid and cash to cover the costs of providing health services. In one fell swoop we could make high-quality care available to millions of people.

No doubt, there are many people who think this is a good idea. I admit that it is intriguing. BUT... do we really want to make an entitlement program EASIER to use? And likely to cost MORE money? And do we want to subsidize medical costs even more? And do we want to play this sort of one-up game?

Besides, "ordinary" health care insurance already plays this game, and people hate it - as do the providers: patient pays their co-pay, say $25 for a defilibrating and lube visit. Doctor charges $125 dollars: submits bill to HealthInsuranceCompany (HIC), who says "we only pay $100 total for defilibrating and lube jobs, you paid $25 so we only pay $75, and Doctor has to bill patient for the remaining $25. Patient gets mad, screams at Doctor, Doctor screams at HIC, HIC screams back. Doctor recodes it as "Defilibrating: $75 (including co-pay of $25), and $50 for lube job: Submits to HIC. HIC pays doctor $100 and bills patient for "failure to pay copay" of $25. Patient pays Doctor $25 (and screams and screams), Doctor bills HIC for $75 for "lube job enhancement and evaluation" and HIC pays Doctor $50 and bills patient for "failure to pay copay" of $25 but "forgives" patient as "customer satisfaction." SO Doctor gets $125, HIC only has to pay out $75, patient gets to pay $50, but feels good that HIC is nice to customers because they didn't have to pay out $75! This is JUST what we want.

The solution? Eliminate regulations that dictate all this bureaucratic billing nonsense, let doctors set and advertise their fees, let the patient pay directly (and NOT have to pay for the six clerks who deal with all this, plus the insurance company costs), let everyone put money into Health Saving Accounts (HSA) that they can use to pay the routine visits, and have insurance like we do for cars and houses: major catastrophes only: not routine care, no matter how important it is. For that defil and lube job, the doctor (with greatly reduced costs) charges the patient $75. Patient pays, period. Patient can then draw money out of their HSA to cover that, or if they are really poor, go down to the local Big Denomination Charities, Inc. and see about a loan or a grant - or even see a banker about a loan (the bankers keeping the HSA would be glad to talk). And instead of paying 6% for Medicare/Medicaid out of their paycheck each month, they are able to pay 1 or 2% for catastrophic medical insurance and 4 or 5% into their HSA account: money that THEY control.

[Editor's Note: The problem is theft, of course, not how efficiently the stolen goods are used.]