Third party payer

There is a solution to the health care cost problem but vested interest are opposed to the idea. It is based on the concept of getting away from third party payers. Suppose you could purchase food insurance. You would pay a monthly premium and then you could go the market, buy your groceries and present your card and go home. After a while you would be concerned about the quality of the food and the location of the store but you would not care about the price. I have often heard people who were in the hospital talk about two dollars for cotton balls and three dollars for aspirin but they do it in a light hearted way because they didn’t have to pay out of pocket. It is estimated that 25% of the cost of health care is in administration and ask any physician and they will confirm that the paper work is expensive. If we could reduce this cost, the savings could be used to take care of the uninsured. Assume that have your health insurance through your employer. On average the employer pays $9,000 per year for a family plan. Typical plans are $100 deductible, 10 to 20% co-pay and some maximum annual out of pocket, on average $2,000. I propose that the company set up a $10,000 annual deductible plan, and this would cost them about $3,000 per family. You would be responsible for the cost of all your health care until it reached $10,000 for your family year at which time the insurance would cover the rest. Whenever you needed health care you would shop for it just as you do other items you purchase. After you have selected your provider you would pay your bill directly to them. They would not be required to contact the insurance company or to fill out any forms other than your receipt. Your treatment would be decided between you and the provider. You would keep track of your annual family health care expenses and if it should ever exceed $10,000, only then would you file a claim, otherwise you would just turn in your total receipts for the year. If you had a year with no claims the insurance company would deposit $7,000 into an account with your name on it. If your claims came to some amount less than $10,000, say $3,000 the insurance company would subtract $3,000 from the $7,000 and put $4,000 into your account. At the end of some predetermined time the insurance company would send you a check for the entire amount in your account. If the above $3,000 annual cost continued for a ten-year period the company would send you a check for $40,000. This procedure would eliminate the paper work on 98% of all claims (those less than $10,000) and thus the reduction in administrative cost. The savings is enough to provide the uninsured with a $10,000 annual deductible policy and they would have the same plan that those with company sponsored plans. There are additional savings involved if the government would allow your savings to accumulate on a tax free basis. Such plans have been around for some years now but large companies have not gotten involved with them. One company Golden Rule has such plans. This of course could also be a national health care plan sponsored by the government where everyone has the same plan. The point is that as long as you have a third party payer system cost will continue to increase more rapidly than other cost that are controlled by the purchaser. You only have to understand human nature to figure this out, but vested interest have too much to lose and that is why we don’t have such a system in place right now.