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An Entrepreneur’s Solutions To The Health-Care Problem
Like most Americans, I am not enamored with the current recommendations for how to improve our health care system, especially the recommendations that would allow all or most of the citizens to be insured by the government.
I am totally against a federally-run program for the simple reason that any government run program becomes permanent. Forget overcharges and fraud. That happens in the public sector as well.
Once there is federal money involved no one will ever be able to dismantle or shrink it. If anything it will only grow because there will be so many stakeholders. Just think of the defense industry and multiply that number.
What I haven’t heard is any entrepreneurial, or for that matter, smart large company thinking on how to solve this problem. People wonder why there isn’t more competition to lower costs among health insurers if there are over 1,200 companies selling health insurance or if there is more than one hospital in an area why aren’t prices lower through competition. Let me start with the top level problems followed by my recommendations.
Problems
• Yes, there are hundreds of health insurance companies, but not all of them want or can afford to be national. The big issue is that you need billions of dollars in reserves to qualify with a various state insurance agencies. Not to mention the politics involved with the various Blues defending their territories.
• You go on the Internet and you can compare prices for just about anything you want to buy, except health care. You have no idea if hospital “A” charges $100 for a broken leg and hospital “B” charges $75 or if there is a special on handling knee replacements.
• There is no layman’s explanation and pricing of how many doctors, nurses, days in a hospital, costs for meds for a particular problem. Removing your CD player in your car is a type of surgery, so how come we can find an absolute price on changing CD players between a car dealer and Pep Boys, but not on a gallbladder removal? I am sure the hospital knows from a budget standpoint so they can price it.
• No one wants to hear that grandma can’t get a free hip replacement or that 80-year-old Uncle Myer shouldn’t be kept alive on a respirator until the respirator gives out. I am guessing if a family had to pay for grandma’s hip replacement out of pocket they would tell her to get used to a wheel chair and Uncle Myer would be left to meet up with everyone in the next life.
• Doctors order lots of tests because they need to protect themselves from potential law suits, which Americans are known for throughout the galaxy. I am betting there are aliens with medical solutions that are afraid of being sued if their technology doesn’t work.
Solutions
I am not a Wharton MBA, but I do work with them. I am not a Harvard medical graduate, but I have friends who went there. Here are my five solutions.
1. Cut out the middleman — Why don’t we all select and join a hospital like we do a bank, a YMCA or a place of worship. Let’s pay membership fee directly. Why do we have to pay one group that provides nothing more than administrative support for another group that already has an administrative group with all of the same information?
Obviously, the fee in Wyoming will be different than New York City because the cost of living, etc. is different. Insurance and government studies have consistently shown that 90 percent plus of the accidents requiring medical attention happen within drive time of our homes. If an accident happens away from home then either a hospital can treat you gratis depending on the severity or they can charge your hospital, which will have a reserve for such problems. Another option is the government just covers accidents that happen 50 miles or more from home.
2. VA Hospitals — The government already has a chain of hospitals known as the Veterans Administration hospitals through out the U.S. We can have the uninsured sign up with those facilities and use them. Many VA’s’ are under utilized and some have been shut down because of under utilization.
3. Get Rid of Emergency Rooms — Let’s convert emergency rooms to clinics. From calling various emergency rooms in the region, I found out that the vast majority of walk-ins really don’t have a medical emergency. My impression is that the hospitals have emergency rooms to up sale services that would cost less if you walked in through the front door instead of the side door where most emergency units are located. We are paying a premium when we shouldn’t.
4. Leverage WalMart — WalMart have developed on site nurse and nurse practitioners clinics to handle an assortment of non-surgical issues. Who knows how to keep costs down better than retailers, especially WalMart. Maybe we should just let WalMart handle the health care system because no one is better at buying in bulk and negotiating vendor deals than WalMart.
5. Pay General Practitioners More — The smartest doctors are also the ones who are paid the least and those are the general practictioners (GP’s). Let’s pay the GP’s more and let them decide what they can and can’t handle. They can make three specialist recommendations and the specialists can provide a quote. The client/patient can make a choice based on experience and price.
The bottom line is my family is now paying as much for health insurance as we are for our mortgage and property taxes. Isn’t applying the word efficiency to the word government an oxymoron? Let’s customize the available infrastructure as opposed to creating another bureaucracy. Maybe this is the president’s real stimulus plan, which is to create a couple million protected jobs in the health care market.
Marc Kramer, who is the author of five books and faculty member at the Wharton School of Business at the University of Pennsylvania, is a serial entrepreneur.
I am totally against a federally-run program for the simple reason that any government run program becomes permanent. Forget overcharges and fraud. That happens in the public sector as well.
Once there is federal money involved no one will ever be able to dismantle or shrink it. If anything it will only grow because there will be so many stakeholders. Just think of the defense industry and multiply that number.
What I haven’t heard is any entrepreneurial, or for that matter, smart large company thinking on how to solve this problem. People wonder why there isn’t more competition to lower costs among health insurers if there are over 1,200 companies selling health insurance or if there is more than one hospital in an area why aren’t prices lower through competition. Let me start with the top level problems followed by my recommendations.
Problems
• Yes, there are hundreds of health insurance companies, but not all of them want or can afford to be national. The big issue is that you need billions of dollars in reserves to qualify with a various state insurance agencies. Not to mention the politics involved with the various Blues defending their territories.
• You go on the Internet and you can compare prices for just about anything you want to buy, except health care. You have no idea if hospital “A” charges $100 for a broken leg and hospital “B” charges $75 or if there is a special on handling knee replacements.
• There is no layman’s explanation and pricing of how many doctors, nurses, days in a hospital, costs for meds for a particular problem. Removing your CD player in your car is a type of surgery, so how come we can find an absolute price on changing CD players between a car dealer and Pep Boys, but not on a gallbladder removal? I am sure the hospital knows from a budget standpoint so they can price it.
• No one wants to hear that grandma can’t get a free hip replacement or that 80-year-old Uncle Myer shouldn’t be kept alive on a respirator until the respirator gives out. I am guessing if a family had to pay for grandma’s hip replacement out of pocket they would tell her to get used to a wheel chair and Uncle Myer would be left to meet up with everyone in the next life.
• Doctors order lots of tests because they need to protect themselves from potential law suits, which Americans are known for throughout the galaxy. I am betting there are aliens with medical solutions that are afraid of being sued if their technology doesn’t work.
Solutions
I am not a Wharton MBA, but I do work with them. I am not a Harvard medical graduate, but I have friends who went there. Here are my five solutions.
1. Cut out the middleman — Why don’t we all select and join a hospital like we do a bank, a YMCA or a place of worship. Let’s pay membership fee directly. Why do we have to pay one group that provides nothing more than administrative support for another group that already has an administrative group with all of the same information?
Obviously, the fee in Wyoming will be different than New York City because the cost of living, etc. is different. Insurance and government studies have consistently shown that 90 percent plus of the accidents requiring medical attention happen within drive time of our homes. If an accident happens away from home then either a hospital can treat you gratis depending on the severity or they can charge your hospital, which will have a reserve for such problems. Another option is the government just covers accidents that happen 50 miles or more from home.
2. VA Hospitals — The government already has a chain of hospitals known as the Veterans Administration hospitals through out the U.S. We can have the uninsured sign up with those facilities and use them. Many VA’s’ are under utilized and some have been shut down because of under utilization.
3. Get Rid of Emergency Rooms — Let’s convert emergency rooms to clinics. From calling various emergency rooms in the region, I found out that the vast majority of walk-ins really don’t have a medical emergency. My impression is that the hospitals have emergency rooms to up sale services that would cost less if you walked in through the front door instead of the side door where most emergency units are located. We are paying a premium when we shouldn’t.
4. Leverage WalMart — WalMart have developed on site nurse and nurse practitioners clinics to handle an assortment of non-surgical issues. Who knows how to keep costs down better than retailers, especially WalMart. Maybe we should just let WalMart handle the health care system because no one is better at buying in bulk and negotiating vendor deals than WalMart.
5. Pay General Practitioners More — The smartest doctors are also the ones who are paid the least and those are the general practictioners (GP’s). Let’s pay the GP’s more and let them decide what they can and can’t handle. They can make three specialist recommendations and the specialists can provide a quote. The client/patient can make a choice based on experience and price.
The bottom line is my family is now paying as much for health insurance as we are for our mortgage and property taxes. Isn’t applying the word efficiency to the word government an oxymoron? Let’s customize the available infrastructure as opposed to creating another bureaucracy. Maybe this is the president’s real stimulus plan, which is to create a couple million protected jobs in the health care market.
Marc Kramer, who is the author of five books and faculty member at the Wharton School of Business at the University of Pennsylvania, is a serial entrepreneur.
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