A NATIONAL HEALTH CARE PROGRAM
The purpose of a national health policy for the United States
should be to serve the health needs of the country at a fair
and
reasonable cost.
Apparently our current composite, polyglot system of (1) phy-
sician fee for service, or (2) salaried staff physicians, or (3)
annual fee for physician services under HMO's. (4) non-profit
hospitals, (5) profit hospitals,(6) hospitals forced to act as
charitable institutions and pass on their forced charity to fee-
paying patients, (7) long-term nursing homes, is not meeting
the medical needs of our citizens.
At the August, 1991 meeting of the nation's governors they
declared that the Medicaid system that provides health care
to the poor is broken, and called for a new, broader and more
flex-ible public program for low-income and uninsured
Americans.
In a study for the National Association of Manufacturers as
reported January 7, 1992 by the New York Times , hospitals
over-charged employers by $10.8 billion in 1991 to make up
for losses on unpaid bills.
Realistically, our slowly aging population (12% 65+ in the
'90 census compared to 9% in '55) and wider use of the new
exotic transplant and organ repair procedures, and
increasing use of treatment for people with little or no hope
of recovery, is going to cause health costs to increase.
The Alternatives
A national health care program for the U.S. could be:
* Totally free market, free enterprise profit-making
* A national regulated public utility (the Princeton Plan)
* Totally government run and paid for
* Semi-public independent like (a) the post office,
(b) the F.D.I.C., (c) the Federal Reserve System.
* The mixture of government programs, commercial insur-
ance, HMO's and fee-for-service we have at present.
Failures
Failures of our current system are:
(1) the doctors' plan, Blue Cross/Blue Shield, is flawed
as being too restrictive in the fine print of its coverages,
sometimes worthless to the subscriber, too many
deductibles and
co-insurance by the subscriber, weak long-term nursing
home coverage, too profit-oriented to the benefit of the
doctors as opposed to having the best interests of the
subscribers at heart.
(2) public organizations that tend to become bloated, ex-
pensive, i.e. an open hand in the taxpayers pocketbook,
inefficient in delivering expected services, bureaucratic,
difficult to deal with, too soft on fraud, suppliers, employees.
(3) 37 million Americans without insurance coverage, 15% of
the population.
(4) commercial insurance plans with the same or worse
faults as Blue Cross/Blue Shield.
(5) low public acceptance of HMO's
(6) not totally comprehensive
(7) worthless health policies. See the article from January
4, 1992 in the New York Times.
Medicare, medicaid, public education and welfare programs
have become prime examples of the failure of wholly
government- run programs to deliver efficient, cost effective
services.
It seems that every time we add a federal cabinet post to
deal with a specific area, the quality of that area goes down.
The law of large numbers
The insurance "law of large numbers" fails in insuring single
subscribers or small groups of employees (under 50), who
must pay exorbitant premiums to cover the impossibly
unknown acturial risks. It improves as the insured group gets
larger.
The optimum group size for America is the entire population,
insured under one plan. And optimally, this plan should be
inclusive of all the health needs of the people, and inclusive
of all the needs of the providers of this health care.
Regional Differences
Regional and local needs and costs must be taken into
consideration in developing a fair and equitable system.
Obviously, the needs and costs of physicians and hospitals
on the upper East Side of Manhattan are different from the
needs and costs of physicians and hospitals in, say, Greeley,
Colorado.
National private businesses provide differentials for employ-
ees in different parts of the country. So does the post office.
This was strikingly brought out in the January 17, 1992 arti-
cle in the New York Times on Empire Blue Cross, where
rates for downstate subscribers would increase 40%, as
opposed to a state-wide rate increase of 26%.
A Cure
All of us recognize that people and their organizations are
imperfect; we will never be able to devise a perfectly-run
health care program for the entire country.
However, a public utility with clear goals and a mandate to
serve the people, and itself being served by a board of
governors selected for competence and dedication to
service, would be a good combination of private/public
cooperation for the common good.
Up, up, up
In 1960, the earliest year for which we have statistics, na-
tional health costs were 5.3% of the gross national product.
30 years later it is 12.2%, a 230% increase.
Nursing home care is up 500%, program administration 350%,
hospital care 260%, physician's services 230%, drugs 125%,
"other" professional services 600%. (See Table I)
The Commerce Department, as quoted by the New York
Times December 30, 1991, reported that total health care had
increased 11% in 1991 over 1990, or to $738 billion, the fifth
consecutive year of double-digit increase. The 1991 inflation
rate was 3.2%.
Further, they forecast that spending would be $817 billion in
1992---a 14% increase---and that these expenditures will
continue to rise at an average annual 12-13% rate over the
next 5 years.
Accepting the 1990 total health cost of $666.2 billion as a
norm, the per capita cost of a national program for a
population of 248,709,873 would be $2,678.
This is 10.7% of the New Jersey 1990 per capita income of
$24,968, slightly less than the 12% health cost rate of the GNP.
According to Judith Feder, co-director of the Center for
Health Policy Studies at Georgetown School of Medicine, in
1991 the average family paid $2,100 for its share of premiums
and cost of health care that insurance did not cover. (NYT
1/25/92)
Long-term nursing care
Long-term nursing care is a hodge-podge; from free-to-the-
patient county homes and other government institutions; to
free-to-the-patient, or ability-to-pay, or a pre-payment "plan"
of charitable homes run by churches, fraternal organizations,
etc.; to purely "for profit" homes.
Now-a-days, avoiding the enormous risk of incurring crippling
long-term nursing home costs by individuals or their families
depends primarily on local politics, church politics, luck in
availability of a bed, membership in a particular organization.
Because of its relatively low incidence vis-a-vis the popula-
tion as a whole, and because of its potentially high costs, it is
an ideal candidate for a national insurance program.
Hospitals
Hospitals in most parts of the country were created by their
community as a non-profit, charitable institution, paid for and
built by public subscription.
Besides serving and benefiting the community, hospitals
benefit physicians by providing a necessary workplace and
facilities free-of-cost to the doctors for performance of their
practice, as well as a vital place of training.
Doctors
Salaried doctors, rather than fee-for-service, is a reasonable
Way to limit excessive physician incomes.
The Veterans Health Administration and Kaiser Permanente
are already doing this, and these two are recognized as
providing the highest quality care in the United States.
The Benefits of a public utility national health care program
* No duplication of actuarial staffs
* No duplication of claims forms
* No duplication of claims staffs
* No duplication of work-ups
(A patient's medical history could be encoded on a mag-
netic card for use anywhere in the country)
* No sales force, advertising, or sales commissions
* No duplication of auditing staffs
* Paperwork reduction
* Automated data processing auditing checks to catch fraud
* Elimination of claims clerks in physicians' office &
hospitals
* Elimination of bad debts for hospitals
* Provide health care to 37 million uninsured Americans
(Nobody turned away from doctor's offices or hospitals)
* No exclusions. Prenatal to grave care for all Americans.
* Healthier America
* Elimination of multiple insurance policies to cover exclu-
sion clauses.
* Elimination of double coverage premium expense for
employed husband and wives in attempting to cover
exclusion clauses.
* Elimination of coordination of benefits and attendant work
generated.
* Elimination of deductibles and co-insurance concept, and
attendant work generated.
* Elimination of 80%/20% co-insurance, with annual out-of-
pocket maximums per policy or person.
* Elimination of maximum allowance coverages
* Elimination of cancellation of policies, or need to prove
good health for reinstatement of same.
* Elimination of participating/non-participating physicians/
hospitals. (now you're covered, now you're not)
* Elimination of exclusions.
* Elimination of quarrels over coverage
* Elimination of medical coverage premiums on auto policies
* Elimination of litigation and expense of medical costs from
accidents.
* No more ad hoc fund-raising for families bankrupted by
catastrophic illnesses or accidents
* Elimination of federal, state and other government depart-
ments administrating medicare and medicaid programs.
* Efficiencies of size and good management.
(1000 different health plans in America)
The purpose of a national health policy for the United States
should be to serve the health needs of the country at a fair
and
reasonable cost.
Apparently our current composite, polyglot system of (1) phy-
sician fee for service, or (2) salaried staff physicians, or (3)
annual fee for physician services under HMO's. (4) non-profit
hospitals, (5) profit hospitals,(6) hospitals forced to act as
charitable institutions and pass on their forced charity to fee-
paying patients, (7) long-term nursing homes, is not meeting
the medical needs of our citizens.
At the August, 1991 meeting of the nation's governors they
declared that the Medicaid system that provides health care
to the poor is broken, and called for a new, broader and more
flex-ible public program for low-income and uninsured
Americans.
In a study for the National Association of Manufacturers as
reported January 7, 1992 by the New York Times , hospitals
over-charged employers by $10.8 billion in 1991 to make up
for losses on unpaid bills.
Realistically, our slowly aging population (12% 65+ in the
'90 census compared to 9% in '55) and wider use of the new
exotic transplant and organ repair procedures, and
increasing use of treatment for people with little or no hope
of recovery, is going to cause health costs to increase.
The Alternatives
A national health care program for the U.S. could be:
* Totally free market, free enterprise profit-making
* A national regulated public utility (the Princeton Plan)
* Totally government run and paid for
* Semi-public independent like (a) the post office,
(b) the F.D.I.C., (c) the Federal Reserve System.
* The mixture of government programs, commercial insur-
ance, HMO's and fee-for-service we have at present.
Failures
Failures of our current system are:
(1) the doctors' plan, Blue Cross/Blue Shield, is flawed
as being too restrictive in the fine print of its coverages,
sometimes worthless to the subscriber, too many
deductibles and
co-insurance by the subscriber, weak long-term nursing
home coverage, too profit-oriented to the benefit of the
doctors as opposed to having the best interests of the
subscribers at heart.
(2) public organizations that tend to become bloated, ex-
pensive, i.e. an open hand in the taxpayers pocketbook,
inefficient in delivering expected services, bureaucratic,
difficult to deal with, too soft on fraud, suppliers, employees.
(3) 37 million Americans without insurance coverage, 15% of
the population.
(4) commercial insurance plans with the same or worse
faults as Blue Cross/Blue Shield.
(5) low public acceptance of HMO's
(6) not totally comprehensive
(7) worthless health policies. See the article from January
4, 1992 in the New York Times.
Medicare, medicaid, public education and welfare programs
have become prime examples of the failure of wholly
government- run programs to deliver efficient, cost effective
services.
It seems that every time we add a federal cabinet post to
deal with a specific area, the quality of that area goes down.
The law of large numbers
The insurance "law of large numbers" fails in insuring single
subscribers or small groups of employees (under 50), who
must pay exorbitant premiums to cover the impossibly
unknown acturial risks. It improves as the insured group gets
larger.
The optimum group size for America is the entire population,
insured under one plan. And optimally, this plan should be
inclusive of all the health needs of the people, and inclusive
of all the needs of the providers of this health care.
Regional Differences
Regional and local needs and costs must be taken into
consideration in developing a fair and equitable system.
Obviously, the needs and costs of physicians and hospitals
on the upper East Side of Manhattan are different from the
needs and costs of physicians and hospitals in, say, Greeley,
Colorado.
National private businesses provide differentials for employ-
ees in different parts of the country. So does the post office.
This was strikingly brought out in the January 17, 1992 arti-
cle in the New York Times on Empire Blue Cross, where
rates for downstate subscribers would increase 40%, as
opposed to a state-wide rate increase of 26%.
A Cure
All of us recognize that people and their organizations are
imperfect; we will never be able to devise a perfectly-run
health care program for the entire country.
However, a public utility with clear goals and a mandate to
serve the people, and itself being served by a board of
governors selected for competence and dedication to
service, would be a good combination of private/public
cooperation for the common good.
Up, up, up
In 1960, the earliest year for which we have statistics, na-
tional health costs were 5.3% of the gross national product.
30 years later it is 12.2%, a 230% increase.
Nursing home care is up 500%, program administration 350%,
hospital care 260%, physician's services 230%, drugs 125%,
"other" professional services 600%. (See Table I)
The Commerce Department, as quoted by the New York
Times December 30, 1991, reported that total health care had
increased 11% in 1991 over 1990, or to $738 billion, the fifth
consecutive year of double-digit increase. The 1991 inflation
rate was 3.2%.
Further, they forecast that spending would be $817 billion in
1992---a 14% increase---and that these expenditures will
continue to rise at an average annual 12-13% rate over the
next 5 years.
Accepting the 1990 total health cost of $666.2 billion as a
norm, the per capita cost of a national program for a
population of 248,709,873 would be $2,678.
This is 10.7% of the New Jersey 1990 per capita income of
$24,968, slightly less than the 12% health cost rate of the GNP.
According to Judith Feder, co-director of the Center for
Health Policy Studies at Georgetown School of Medicine, in
1991 the average family paid $2,100 for its share of premiums
and cost of health care that insurance did not cover. (NYT
1/25/92)
Long-term nursing care
Long-term nursing care is a hodge-podge; from free-to-the-
patient county homes and other government institutions; to
free-to-the-patient, or ability-to-pay, or a pre-payment "plan"
of charitable homes run by churches, fraternal organizations,
etc.; to purely "for profit" homes.
Now-a-days, avoiding the enormous risk of incurring crippling
long-term nursing home costs by individuals or their families
depends primarily on local politics, church politics, luck in
availability of a bed, membership in a particular organization.
Because of its relatively low incidence vis-a-vis the popula-
tion as a whole, and because of its potentially high costs, it is
an ideal candidate for a national insurance program.
Hospitals
Hospitals in most parts of the country were created by their
community as a non-profit, charitable institution, paid for and
built by public subscription.
Besides serving and benefiting the community, hospitals
benefit physicians by providing a necessary workplace and
facilities free-of-cost to the doctors for performance of their
practice, as well as a vital place of training.
Doctors
Salaried doctors, rather than fee-for-service, is a reasonable
Way to limit excessive physician incomes.
The Veterans Health Administration and Kaiser Permanente
are already doing this, and these two are recognized as
providing the highest quality care in the United States.
The Benefits of a public utility national health care program
* No duplication of actuarial staffs
* No duplication of claims forms
* No duplication of claims staffs
* No duplication of work-ups
(A patient's medical history could be encoded on a mag-
netic card for use anywhere in the country)
* No sales force, advertising, or sales commissions
* No duplication of auditing staffs
* Paperwork reduction
* Automated data processing auditing checks to catch fraud
* Elimination of claims clerks in physicians' office &
hospitals
* Elimination of bad debts for hospitals
* Provide health care to 37 million uninsured Americans
(Nobody turned away from doctor's offices or hospitals)
* No exclusions. Prenatal to grave care for all Americans.
* Healthier America
* Elimination of multiple insurance policies to cover exclu-
sion clauses.
* Elimination of double coverage premium expense for
employed husband and wives in attempting to cover
exclusion clauses.
* Elimination of coordination of benefits and attendant work
generated.
* Elimination of deductibles and co-insurance concept, and
attendant work generated.
* Elimination of 80%/20% co-insurance, with annual out-of-
pocket maximums per policy or person.
* Elimination of maximum allowance coverages
* Elimination of cancellation of policies, or need to prove
good health for reinstatement of same.
* Elimination of participating/non-participating physicians/
hospitals. (now you're covered, now you're not)
* Elimination of exclusions.
* Elimination of quarrels over coverage
* Elimination of medical coverage premiums on auto policies
* Elimination of litigation and expense of medical costs from
accidents.
* No more ad hoc fund-raising for families bankrupted by
catastrophic illnesses or accidents
* Elimination of federal, state and other government depart-
ments administrating medicare and medicaid programs.
* Efficiencies of size and good management.
(1000 different health plans in America)
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