Years ago, Charles de Gaulle of France famously said “How can you govern a country which has 246 varieties of cheese?” In a similar fashion, one might ask how can we improve our current healthcare system when it is so heterogeneous, i.e. has so many different moving parts and choices? To answer this, it might be sensible to review some fundamentals.
In our current healthcare system, money is paid to an insurance entity which may be either a government program (via taxes) or private program. This entity then to an extent organizes and pays for our care. Let’s review some of these insurance programs.
Medicare is a government program which is largely a medical insurer for the population>= 65. Interestingly, if one develops end-stage renal disease, i.e. one has no renal function and is days away from dying, then one is immediately eligible for Medicare regardless of age. As mentioned in previous articles, at this point it costs $100,000/patient-year to keep these patients alive. Approximately 67,000,000 people are on Medicare (2024 figure).
Medicaid and CHIP are government programs targeted for people who are financially disadvantaged, the former largely for adults and the latter largely for children. Both of these programs are very useful for coverage that emphasizes prevention (especially CHIP) as well as treatment for acute and chronic diseases. Medicaid and CHIP have approximately 79,000,000 patients enrolled (again, a 2024 figure).
A few other smaller government programs exist such as TRICARE (which takes care of active military, veterans, and families).
On the commercial market are a number of commercial insurance entities which are paid either directly by the patient or by a combination of the patient plus the patient’s employer. As of 2023 (not 2024), this numbers 217,000,000 Americans.
8% of Americans (approximately 26,000,000) have no insurance and although a small percent can “pay as they go”, the vast majority cannot.
As noted in the many articles above, to improve our system and quality while maintaining cost efficiency, a single-payer model+global capitation+universal coverage are the central features of new system. The working name for this new medical system is the Responsible Care Entity. What would be the central features of these Responsible Care Entities (RCE), the entity replacing insurance as we know it. What would such a system look like?
One key feature would be that it would be a stock issuing entity. Half of the stock of the RCE would belong to the enrolling patients. The other half would be owned by the administrating entity (AE). So, there would be 2 types of owners. Both parties would have strong incentive for financial efficiency. The AE would receive the preponderance of fees although the patients could receive additional money as incentives for positive habits.
The AE would be the operational arm of the responsible care entity and offered a large contingent of patients at a time for a fixed duration, possibly numbering in the millions (1,000,000, 5,000,000, 10,000,000, or so on). For each patient, the AE would be paid $7500/year to care for all their medical needs. Thus, if the AE was allocated 1,000,000 patients, it would be paid $75 billion/year to take care of all them for 1 year. Only financially robust AE’s would be allowed to participate. With such vast sums of money as incentive, I suspect that today’s commercial insurance companies would adapt and reconfigure themselves to be among the new AE’s. Remember that AT&T “only” made as gross income $122 billion in 2024. Caring for 5% of the country (1/20 of the USA) would entitle the AE to a gross income of $128 billion.
As has been noted in OMRUM repeatedly, the best medicine is also cost-effective medicine. The vascular surgeon noted in the “Global Capitation” article who filled his wallet by unnecessary ultrasounds would have no incentive to do unnecessary procedures anymore as he would himself be capitated under the AE (assuming he would be allowed to participate at all!) E.R. physicians who had previously had latent if not overt pressure to admit even marginally ill patient to the hospital would suddenly find hospitals only wanted truly sick patients to be admitted. That would compel my E.R. colleagues to discover and engage other parts of the outpatient medical system for efficient transition of care. Recidivism (readmission for the same problem) would not be an issue just within 30 days anymore since the hospital would not receive any additional funds at 31 days or more if the problem were not fixed the first time.
All of the incentives for the system would be to preserve health as possible, intervene early for any new problem as an outpatient as necessary, and help the sickest patients to navigate recovery with the least difficulty. Lazy and myopic care systems will not survive, much less prosper.
The next question might be how does one know that this system will provide the best possible care?
The answer has many elements.
First, every patient will have a primary care physician (PCP). These relationships will last (hopefully) long periods of time so that the patient will have a good sense of trust and continuity. The PCP is in charge of all elements of care and will be a resource for the patient in all situations, simple and complex.
Second, halfway measures for the patient will come back to haunt the AE and in the long term cost it more money. If the problem is not fixed “upstream”, the patient will seek remedy “downstream” possibly in the emergency room which is very cost ineffective.
Third, since the patient’s will also be owners in their RCE, they will have great power to give feedback on their own company. Hopefully this will be both positive and negative feedback and allow the patients exposure to the inner workings of a health system. Hopefully, this will lead to a sense of “ownership” among the patients and foster a sense of mutual responsibility.
Fourth, the United States should have by this time all medical records centralized so that gentle reminders could be issued to patients who are overdue for routine screening, follow-up, blood tests, vaccinations, and many other things so that the patient has an advocate reminding one of what is due. Also, with all the records centralized, the AE could be alerted to components of the system that are not satisfactory (e.g., excess waiting time for mammograms, slow turnaround for blood test results, physicians who draw too many complaints, etc.)
Fifth, with all the improvements in the practice environment, clinicians such as physicians, nurses, therapists, and so on will have more time to offer the patient and less time fighting “the system” (examples of this are pre-authorizations, outright denials, retroactive denials,…)
Please note that the new healthcare system will be national and not piecemeal, state-by-state. This will allow a great deal of homogeneity in the program across the entirety of the United States. The states should not mind this since each state will no longer need to pay >$5 billion/year (on average) for their contribution to Medicaid programs (nor for that matter need they worry about paying healthcare for any of their own employees or their families). This money can be returned to the general budget of each state for other use.
Medical licensure would be controlled under this system as a federal program rather than multiple state programs. This would allow physicians and other licensed medical providers to move smoothly from one state to another subject to one national program instead of multiple state programs. This author believes that this should have been done many decades ago.
Each RCE would contact its members by one means or another to get feedback and make improvements.
Year by year, the RCE could improve its margins even with a fixed payment per member per month for a long while as the patient population was given financial incentives to stay healthy, “upstream” PCP’s would receive more dollars to reduce the need for downstream specialists and procedures (and related attendant losses), and all physicians would receive report cards for feedback regarding suboptimal behavior (e.g., insufficient cancer screening, insufficient vaccination, failure to counsel patients regarding BMI, excessive testing, and many, many other things).
Thus, with the system shifting proportionately to prevention and early intervention, a patient population unburdened by the fear of insurance loss, a PCP (primary care physician) responsible for each and every American, and feedback for patients and providers alike, we could forge a new system of a Brave New Medical World.
That is truly something to which we should aspire.