Thursday, September 17, 2009

Health Care Solution

Change the Way you Think

In spite of what one thinks, there may be a solution to the health-care "problem." Unfortunately, the solution means thinking about and doing things differently than the way we currently are. The thinking part of the two is the bigger hurdle. 

Tort Reform

Every aspect of life in America is affected by Tort Law. Every time you turn around, there's mean ol'  Mr.Tort looking at you. In your own home, to the car and street that gets you to work and to the store, even the kids Saturday ball game is ruled by Mr. Tort. From the grocer's shiny floor, to every product we use, including the cart you push, to even the structure of the building, to even the discourse between customers, all aspects of life in America are ruled by Mr.Tort. And he is a nasty and expensive guy. 

In 1978 Piper Aircraft employed  in excess of 8,000 men and women and sold over 5000 airplanes. By 1987 half of all their revenues went to cover Liability Insurance; by 1991 the company went bankrupt. This same scenario was playing itself out at all US based General Aviation (GA) plants. While some of our citizens had Sued Their Way to Wealth others had been sued to death. In 1994 the General Aviation Revitalization Act of 1994 put a lid on Tort Law as it related to GA; that piece of legislation had a singular effect on GA manufacturing in America: in 1997 GA manufacturers logged a record $4.7 billion in sales soaring over the previous years sales by a whopping 66%! More details regarding the Act are here

I mention GARA simply to highlight the difference a day can make. GA was going broke, down the tubes of litigation hell, but was saved by tort reform. Today the entire Health Industry, something like 20% of the economy, is going down those same tubes, bankrupting not a handful of airplane makers but the whole country. Our political parties and elected officials are in the firm grip of the trial lawyers who are literally suing their way to wealth while breaking the backs of American middle class earners. Big pharma, hospitals, virtually all health-care providers, pay huge liability insurance premiums just to stay alive. Of course all costs are borne by the final user and in this case that's John Q. Public; in the form of expensive service, high insurance premiums and a dwindling supply of providers. The Health Care System, if it is to survive to provide service to the entire citizenry, must have Tort Reform.... NOW.


Insurance is something we can all relate to. Most of us have car and home insurance, we pay for it ourselves and we are covered by it from coast to coast. We purchase and "own" our insurance. Most States require drivers to have insurance, yet we aren't screaming for government provided home and auto insurance. We shop around for it and try to get the best deal we can. Some buy more extensive coverage than others but a basic policy is required to own and drive car. But when it comes to health insurance, most of us do not "own" our policies but enjoy the coverage that is mostly provided by insurance that is "owned" by our employers. We don't even think about it, other than we want it and employers provide it. Employers purchase insurance and it covers their employees. The insurance company can not pick and choose which employees are covered... it's a package deal. Unfortunately when a worker quits or is fired or simply takes a work "break," the insurance coverage (eventually) is lost. Once one is on ones own the rules change. When an individual applies for coverage, pesky items like preexisting conditions, age and other health related issues come into play determining the cost and quality or even the availability of coverage. This should change.


People buy cell phones and cell phone plans, they purchase flat screen TVs and Xboxes; they buy beer and cigarettes and chips and gadgets of every ilk... but they won't buy health insurance, if not covered by work many just chance it. What this really means is that someone else will pick-up the expense through ER service or failure to pay the providing doctor or hospital. We all pay through more costly services. Because, again, the final user pays all the expenses. This has to change, personal responsibility has to play a role, even if it is mandated.


Everyone must be required to carry health insurance. The whole idea of insurance dissolves if only those that incur losses are covered. If that were the case premiums would be all but unaffordable. The insurance pool must include everyone, the young, the old, the healthy the sick... everyone must pay into the pool. That's the way insurance works. All health insurance should be available nationally, not restricted by State borders,  and all policies should be "owned" and paid for by the individual. Employers, relieved of insurance premiums would be required to pass on the insurance savings to employees. Employers would gladly relinquish this onerous responsibility and other savings, beyond the cost of premiums, would accrue to the employer. A basic health insurance policy, perhaps along the lines of "major-med" should be required of all citizens/residents. A "proof of coverage" can be easily devised, but everyone must be insured. Some individuals will fall through the cracks, as do some drivers. They would have to be insured by the state, and provided with the minimum coverage, service delivered by State supported public clinics. This service would be available to all those that fall below the poverty line, which would be adjusted to include the cost of medical insurance.

That leaves the illegals. As long as we allow them to enter the country, to stay, to work, and to raise families, we have no choice but to include them in State provided policies. This is just the practicality of the situation. We will not deny medical service to anyone. That's not who we are.

Private Sector

All the above should be provided by the private sector. We know from experience that the government cannot provide cost effecient and competitive service. With-out the profit motive and the efficiencies of the competitive market there are no savings, there is no efficiency... these things are the opposite of all that is embodied in the phrase, "government bureaucracy."

So there it is, by the numbers, five parts to a better system: 
  • 1) TORT Reform
  • 2) Ownership
  • 3) Mandated
  • 4) Clinics
  • 5) Private Sector

Cheers, Mel