Summary Sheets

These are summary sheets highlighting basic overviews of issues or solutions

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The ACA – ObamaCare is failing, and will surely fail, but not for the populist reasons being discussed so readily today!

Overview – Why We Still Need More Reform

We now expect significantly more from our country’s healthcare system – and by extension its governmental structures: federal, states and commonwealths – than we did at its founding. We no longer value the role of Benjamin Franklin’s style of “compromise though tolerance as we once did. Everything we now attempt to do becomes locked in an all-or-nothing outcome based approach. The latest healthcare legislation, and more recent proposals, can be seen as the culmination of this dysfunctional approach.

For a variety of historical reasons, all seemingly reasonable and appropriate at the time, we have adopted a series of modifications, often in the form of rules and laws, to try to affect corrections to one part, or another, of this non-system. All of these approaches, in the parlance of medicine, have affected the symptoms of the disease but they have not cured the underlying fundamental problems and have been doomed to fail.

In order to correctly define an effective, cost efficient, and appropriate healthcare system for all Americans, we must first address the fundamental issues, disconnects, and problems of our historical non-system. In order to begin to actually address the needed fundamental fixes – therefore deal with the disease not the symptoms – we need to first identify and agree on what the fundamental problems are. (For more detail see Article 1: Introduction to the Real Healthcare System, and other linked articles)

Overview – Marketplace Solutions

We believe we can find compromise that will yield a much simpler, stronger, efficient and appropriate system for Americans to get the care they need in crisis and the care they want by choice. It is in the assured concept of an effective safety net for all, integrated with American’s need for choice that holds the key. Both simply cannot exist without integration as they become predatory and consuming of each other. (See Myth 1 Healthcare Costs Too Much) They must exist in a manner that systemically provides certain controls, checks and balances. We must reset our own false expectations to better reflect the reality of the care that can be provided in order to minimize extraneous cost. (See Myth 2: Healthcare, It’s Good for What Ails You! & Myth 3: We Can, and We Should, Live Forever!) Price certainty, transparency, portability and effectiveness need to be codified as requirements of any solution. At the same time, effective allocation of appropriate regulation, oversight and responsibility at the federal, state and individual level also need to be integrated into any system. Any solution must provide an effective safety net for all the helpless while filtering out the clueless – who inadvertently and significantly increase costs and utilization of scarce resources – and the fraudsters – who purposely game the system in order to inappropriately receive disproportionate and unnecessary gain while also consuming available resources from those who desperately need them. Finally, the solution shall at its safety net, basic care level, provide the same access, scope and treatment options for all regardless of income or means with no additional hidden costs, taxes, fees or shifting of costs from one system to the other.

The core of the proposed system are two disparate market based systems that are tightly integrated with effective free market pressures, appropriate governmental monitoring, and combined checks and balances. The main core of the system is a basic LifeCare marketplace, focused on equal access, treatment, and affordable cost to all Americans. This is the prime source for all care needed to provide viability, and production. A second system provides for individual care wants, beyond basic care needs. This Quality of Life marketplace will be a distinctly separate mechanism of reimbursement, pricing and access to care, but both systems will be tightly integrated through a central point of access and administration that provides for full coordination of care and benefits across all available sources — as well as other benefits.

LifeCare Plan Marketplace

LifeCare Plans form the core of a marketplace and system to deliver our basic healthcare needs targeted at survival, viability and deliverable value to self and society. There will only be one type of LifeCare policy offered by every insurance company that chooses to be in the health insurance business. All policies, regardless of the insurer, will be identical in scope, extent of treatment and coverage. Each covered need will have a recommended best practice treatment guideline and published payment amount. With only rare exceptions, treatments will be standardized. Providers will not be bound to the recommended treatment and may alter the treatment at their discretion but the payment to the provider under the plan will remain the same.

The LifeCare Treatment, Practice and Payments Congress

Plan scope, extent of coverage, recommended best practice and payment pricing that constitute LifeCare needs policy limits will be set by a bi-partisan national governing body appointed by the various states – The LifeCare Treatment, Practice and Payments Congress – composed of representatives from the four key healthcare constituent groups; Participants, Facilitators, Providers and Sponsors. Guidelines for the definition of plan coverage will be established to ensure that the included treatments will represent effective care to assure viability and productivity. Treatment guidelines in LifeCare will be established to assure adequate coverage for all Americans and will be structured in a way to stimulate a practice modality and business model that is predicated on a high efficiency, high volume, and low cost, effective care delivery model. Since we are also integrating a choice based system, the LifeCare system can be appropriately restricted in terms of treatments and therapies more appropriate to selection and payment via physician and patient choice. Optional treatments and therapies can be accessed via the Quality of Life plan system.

Basic LifeCare Plans

Basic LifeCare plans can be purchased in any state or territory from any qualified insurance provider in the U.S. regardless of their state of origin. It is anticipated that once purchased, the basic LifeCare plan will follow the individual throughout their life and be the basis for all basic services received until their death. The current law that allows parents to maintain coverage of their children till age 26 will be continued. Individuals will be strongly encouraged – but not mandated – to purchase their LifeCare policy at the age of 27, or upon initially entering the workforce, whichever is earlier, through an integrated set of incentives.

Premium payments for LifeCare policies will be primarily established based on the age of the Participant at the time of purchase and the premium will remain the same as long as the policy remains in force and is not allowed to lapse. Should the policy lapse, due to non-payment, fraud or abuse, then the policy may be reinstated at a rate representative of the price based on the Participants age at re-enrollment. Material early purchase incentives will be in the form of the time based pricing model with significant increases in premium costs weighted in the first few years of policy purchase. All costs for LifeCare plan treatments will be published and standardized so there will be full price certainty and transparency. There will be no allowed rebates, fees or self-targeted taxes that backflow into the overall cost of care and obscure the true cost of care. All programs from all sponsors will be integrated into the LifeCare plan system through the national Single Point of Administration Full Coordination of Care and Benefits system discussed below. This will help make sure that all options for payment are coordinated and applied fairly and completely, based on eligibility criteria and constraints while reducing duplication of services, cost shifting and fraud.

LifeCare Safety Net Provision

The LifeCare solution is designed in a manner to provide affordable coverage, and the means to pay for this coverage, for most Americans though their earnings and/or an employer incentivized life health and wellness stipend system. Yet, it is clear that regardless of the incentives and encouragement, not all will be either able to comply, or in some cases act responsibly to obtain, and pay for coverage. The current healthcare system has significant cost drivers due to three prime cohorts, the helpless, the clueless and the fraudsters. An effective safety net must be established to cost effectively help the helpless, reduce the cost effect of the clueless and eliminate, to the largest extent possible, the exorbitant cost of the fraudsters.

People that are helpless, due to loss of job, income, or means to pay, are protected in this system. Should a person have a LifeCare plan or suffer a loss, or catastrophic event, that renders them unable to pay for their LifeCare plan they will become eligible for full or partial LifeCare plan premium support. Upon eligibility, they can immediately and automatically register their needs and apply for assistance through the single point of administration system described below to have their existing LifeCare plan premiums covered, in whole or in part, through one or more available Sponsors. Under the payer of last resort system, the federal government will act as the final backstop for all American citizens for LifeCare. There should be no reason for any LifeCare plan holder to ever have an interruption of coverage under this system. If responsibly managed, either by the Participant or their authorized Facilitator, LifeCare premium payments should continue with no interruption of plan benefits and no resetting of premium costs due to lapse of coverage for reasons of non-payment.

Except for the permanently disabled, or others the government designates as eligible, all individuals that receive federal premium support will receive the aid during their eligibility period as a loan until such time as they are no longer qualified as eligible. Upon regaining the means or ability to pay for their plans, or other loss of eligibility, individuals will be expected to begin repayment of the outstanding loan balance. Payments will be calculated and amortized across the remainder of the individual’s effective productive life.

Quality of Life Market

Quality of Life Care begins where the LifeCare plan ends. While the LifeCare system is predicated on high volume, highly efficient, pre-fixed low cost routine treatment modalities with some free market effects to lower cost, Quality of Life providers will evolve to be more market driven in nature. Quality of Life care will be where individuals get the additional care and treatment they desire based on their own individual priorities, desires and choice.

Quality of Life Providers will build their practices around the provision of value-based services to individuals above and beyond LifeCare basic needs services. The Quality of Life market system is designed to incentivize those that wish to practice in this value-based market to design their business model around the provision of a higher priced, potentially lower volume, high perceive value-based, more retail market-driven model.

Participants can choose to pay for Quality of Life Care services at the time of service through any means acceptable to the provider(s). They can pay for Quality of Life services through their tax free Life Health & Wellness Savings Accounts (see corresponding section in the hyperlinked whitepaper, also see Employee Health & Wellness Stipend section) or they can purchase Quality of Life Advantage plans from any qualified health care insurer. All insurance payments will be provided to Participants directly or through electronic funds transfer to their Life Health & Wellness Savings Accounts. In this solution, the Participant is always the center of any health related transaction whether financial, or informational.

Unlike, LifeCare plans where the premium cost is tied to the age of the policy holder at the time of purchase and remains relatively constant throughout the plan holder’s life, Quality Of Life plan pricing and terms will largely be driven by the free market. The exception may be in some constraints that may be established by the various states who choose to regulate additional services provided to their citizens above that which is provided by the basic LifeCare plans.

Single Point of Administration – Full Coordination of Care & Benefits System

We have spent in excess of $750 million in creating Healthcare exchanges at the federal level alone.   Recent proposals have advocated abandoning the exchange system altogether. This solution does not take that approach. It plans to preserve this investment and repurpose the infrastructure, much of it currently technically consistent with the future roles as described.

A potential key to integration of the LifeCare and Quality of Life Care market systems are the re-purposing of the current HealthCare Exchange infrastructure to provide for a single point of administration incorporating full coordination of care and benefits across all available sources. Doing so will not only effectively support better integration of the various cohorts in the care continuum, it will also provide the innate checks and balances to reduce the waste inherent in the current and historical system. It is anticipated that as much as 40 percent of the healthcare spend and service utilization can be saved just by effective coordination of care and benefits. This will not only save money it will also free resources to cover more patient needs. It is also well documented in various studies that better coordination of care significantly improves outcomes and lowers costs.

The system, as proposed, would tightly coordinate and integrate the needs, resources and functions of four cohorts; Participants, Facilitators, Providers and Sponsors as described following:

  1. Participant – Historically we have called the end customer of care the ‘Patient’ because they needed to be patient. These patients, more often than not, are passive objects where providers routinely dispense procedural services in order to maximize revenue regardless of actual need, benefit or outcome. We recommend that we change the name of the healthcare consumers in this new solution to ‘Participants.’ In this solution, Participants are actively engaged in the entire process of treatment, they are the core determinant – or they can engage a Facilitator, described next – for the services they receive, they must make active decisions in the care process for the basic life care services they need. Participants may purchase expanded choice based care if they have taken active steps to manage their life choices in a manner that makes available funds for optional quality of life purchases they may want.
  2. Facilitators – these are people that help Participants find, qualify, and access services they need or want but they do not provide services directly in the scope of care being sought.     Some Facilitators, are trained and paid for their services, and others are untrained and often simply volunteer. Regardless, they all share the burden of privacy and discretion as well as some other characteristics, both legal and ethical. Facilitator subgroups have very specific sets of roles, responsibilities and requirements – like maintaining the privacy of Participant information that they share across the spectrum of providers. Facilitators interact with all other players in the supply chain and provide certain value to the other constituent groups as well.
  3. Providers – these are the people that provide care to Participants.   It is in this area where significant efficiencies and gains can be made by a re-examination of the rolls and responsibilities, and authorities to practice in a variety of areas. A realignment of rolls will significantly free currently constrained resources and drastically lower the cost for low level routine and frequent care. Realignment will also significantly free current access limits.
  4. Sponsors – these are the people that pay the bill when it is due for the services delivered by the providers.   Sponsors have access to funds and create programs by establishing eligibility requirements – program constraints.

There are many areas where this system will provide benefits. Let’s highlight three main benefits;

  1. Saving money through reduction in duplicated services, unnecessary services, fraud and adverse reactions due to lack of coordination of care and benefits
  2. A more appropriate spread of available resources freeing access to services and funds to pay for them across the widest possible need
  3. An improvement in patient outcomes through a better coordination of care and the incorporation of true participant centered virtual care groups.

Summary

We have only scratched the surface as to the features and benefits of these solutions.  We have have not touched on the specific bipartisan agreed upon goals, nor have we spoken of the integrated objectives that need to be crafted into any solution. These are available on the website under Principals, Goals & Objectives.  We have nod discussed the impact of our own myths and misunderstandings about what is really deliverable in terms of the scope and extent of care from medicine today. We also have not had time to discus how the solution provides for a true “Participant Centered” approach which is also key to lowering costs, lowering excess utilization and improving outcomes. These and many other topics are discussed in the draft Whitepaper, Summary Sheets and Articles on the Health Reform 2.0 website.

We believe that the solutions proposed within this site will fit neatly into a comprehensive approach that Americans will be able to embrace. We do not expect everyone to like every solution proposed in the system but, we do believe in the end these solutions as they are designed fit closely together to solve for a marketplace that will provide Americans with an affordable, cost effective, efficient, fair and appropriate market, and safety net, to get the healthcare they need while preserving the options for a choice based system to get the care they want. This is not to be seen as “The Solution,” but as a series of solutions that are interconnected. These ideas are not inviolate and will surely change. To achieve the goal that we seek, will require a Franklin style compromise, either from a renewed interest in bipartisan, bicameral solutions in Washington DC or from the real power-base of America – the American People.

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The ACA – ObamaCare is failing, and will surely fail, but not for the populist reasons being discussed so readily today!

We don’t have a healthcare system!

When it comes to America’s, so called, Healthcare System, one of the biggest reasons that most of the attempts to “fix” our healthcare system have consistently yielded more unintended consequences than benefits is that we are treating the symptoms of our disease not the disease itself. We have a number of misconceptions about our healthcare system and the first is that we believe that it is a system.  It’s not!  It never has been.  What we think of as our healthcare system is nothing more than a disjointed, tangled collection of practices, methods, procedures, policies, laws and guidelines that have developed over the past 200 years.  Most of this mess was promulgated to preserve the business of individual practitioners – doctors, physicians, pharmacists, hospitals, pharmaceutical manufacturers, insurers, nurses, therapists, program sponsors, etc. With rare exception, many of this collection of things were not focused on the needs of the patient.

We believe that healthcare has been part of the free market, and some believe that the free market system has failed healthcare. Yet, healthcare has never been in the free market. Almost since the inception of America, healthcare has been carved out and in many ways protected from any negative effects felt on the businesses and practices in healthcare.  No, healthcare is not a system; it is just a non-integrated set of protections granted to the various providers throughout our history.

A plague of myths!

We have many beliefs about healthcare, and its underlying core of modern medicine, that have caused us to establish a set of unrealistic and unobtainable expectations when it comes to the care we receive.

We speak in myths, of single payer systems, and specific cures for diseases. We routinely confuse popular beliefs or historical methods with actual scientifically backed best practice. We misunderstand the true extent of medicines capabilities. We conflate our needs with our wants and ascribe equal weight and priority to both. We have so disconnected ourselves as consumers of care that we do not truly understand the real effect of the care we receive.

We believe we have cost effective, efficient and appropriate roles and responsibilities for the various providers in the healthcare continuum – we don’t!

We believe that technology has played a key role in the cost efficient delivery of care we need – for the most part it hasn’t.

We have a flawed understanding of the actual cost of the healthcare we receive due to a false healthcare economic structure. We have constructed a measurement, funding and

delivery system that is now self-propagating, self-predatory and inaccurate in the extreme.  This has led us to believe that our healthcare system is much worse than everyone on the planet; and because we are the greatest, most prosperous nation on the planet, we can somehow afford to receive all of what we want free – It’s not, we aren’t and we can’t.

We believe Employer Sponsored Insurance (ESI) has lowered costs and been a good thing – it hasn’t!

We believe co-pays and deductibles are both the necessary effect of rising costs and somehow have helped lower our cost of care, as seen in the premiums we pay; and also have been a vehicle for us to become more responsible in our utilization of services – they aren’t and they haven’t!

We believe that the current system can lower care costs and reduce our incidence of financial collapse by transference of these costs to the government, or someone else – they won’t!

We believe that most of the money we spend on care goes to effective treatment – it doesn’t!

We believe that the affordability of government’s payments for services through Medicare and Medicaid is somehow fixable and can be sustainable – it’s not!

We believe that the programs we have demanded our government put in place to help the poor and middle class have actually helped the poor and middle class – they haven’t!

We believe that we cannot fix the effect of litigation on the rising cost of healthcare without penalizing the patients that are truly harmed – we can!

We have such fundamental flaws in our care system that the simple process of seeking care is now statistically one of the most dangerous activities we can do in our lives. Some of the biggest reasons our prior attempts to “fix” healthcare have failed, actually lie in these myths and misunderstandings.

In order for us to finally create an accessible, accountable, efficient and effective healthcare system, including a safety net for all, we have to first identify, and get agreement on, these Myths and Misunderstandings and other fundamental problems.

We have a solution! We believe we can fix the healthcare, and we believe once we identify the fundamental problems the process of repair gets much simpler. Over the next four papers we will outline our fundamental problems and their solutions.

Click this link if you wish to read the whitepaper now – HealthCare Reform 2.0: Beyond the Partisan Divide White Paper

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The ACA – ObamaCare is failing, and will surely fail, but not for the populist reasons being discussed so readily today!

False Costs!

Dan Munro states, in his article “Annual U.S. Healthcare Spending Hits $3.8 Trillion,” published in Forbes Magazine, February 2, 2014, that the nation’s true healthcare spend needs to be calculated to include both the National Healthcare Expenditure ($3.093 trillion) and the Sustainable Growth Rate ($0.116 trillion) deficit that is accumulating on our books.  He further is adds two numbers, recently calculated by Deloitte Center for Health Solutions, “The Hidden Costs of U.S. Health Care: Consumer Discretionary Health Care Spending,” Additional Direct Costs ($0.129 trillion) and Imputed Indirect Costs ($0.492 trillion).  This is how he gets to the staggering projection for 2014 of $3.8 trillion in total healthcare costs. He is correct and wrong!

Do we really know how much America’s healthcare costs?

The short answer is, NO – we don’t. We just think we know what it costs because people produce a number that is nationally reported.

The real number is likely far less than what is reported; but getting to the real number is very difficult.  Here’s a few of the reasons:

  1. We do not collect consistent comparable data – it includes both prices invoiced in some cases and actual reimbursements in other cases.
  2. Much of the reimbursement data that is collected, is tainted by the false economic structures in place that both influences its price and affects the reporting.
  3. Some of the data reflects what is charged at invoice; but what is typically paid to providers is a significantly smaller number – averaging 22 cents on the dollar invoiced.
  4. The numbers that are calculated based on what is reimbursed to providers for the service – actually paid, not invoiced – are tainted by a number of hidden and, in some cases, arbitrary calculations and mechanisms that drive up the reported reimbursement price.

Circular Math Drives Inflated Costs

Let’s look at one program, in one state, California’s AIDS Drug Assistance Program (ADAP), they report that they paid $500 million for drugs delivered in 2009. Since CA “reimbursed” pharmacies for these drugs you would think the cost was accurate. Again, you would be wrong!

California, did report that is spent $500 million but that is not what the net cost really was. In this case, about one-half of the funding came from the federal government and about one-third of those funds came from a mandatory rebate program paid by pharmaceutical companies, who supplied the drugs, to the federal government who passed the funds back to California.  The other half of the funding came from two different sources in the California budget; about one-half is from the General Fund (taxes) and the other half is from a “Special” Fund (CA’s mandatory rebate from the same Pharmaceutical companies for the same drugs). So, even with government provided reimbursement cost data, the actual number spent is not correct – often, not even close.

Pharma created the funds to pay all these rebates by increasing prices. This is only one example of dozens throughout healthcare. The ACA has added many

similar taxes and fees creating the funding to pay subsidies. No one seems to see it continually drives prices up!

Employer Sponsored Insurance, Co-Pays and Deductibles = Price Obscurity

At first grouping numbers of employees together in an employer pool provided for group purchase discounts and, larger employers were able to offer better benefits. Soon, this advantage was consumed with rapidly expanding benefit offerings.  Employer A offered vision. Employer B responded with vision and dental. Next, benefits increased to include expanded dental coverage and more. Each year, employees demanded better coverage – more things covered – and each year employers responded by demanding more from their insurance plan to satisfy employees. Insurers responded by adding more covered items into the policies and raising premiums.

As policy costs grew, at first employers assimilated them and reduced salary increases.  The continual demand for more benefits moved beyond just good basic healthcare to items that were more weighted toward quality of life and desired additional care.

Along the way, employers needed a mechanism to offset the rising costs. Insurers responded with the idea of deductibles and co-pays.  As employees asked for more, or as the providers invented new more expensive ways to treat illness, accident and disease, costs were shifted to the employee and the provider payment was reduced by the insurance company. This was then predictably picked up by the patient in the form of co-pays.

The system now places an undue burden on the insured as routine deductibles, without subsidies – costing as much as $12,000 for a family of four – can alone bankrupt many families.  The concept of affordable care practically goes out the window. But it need not be this way.

We believe we can develop a system that will eliminate the need for copays and deductibles and replaces ESI with a tax incentivized stipend system coupled with lifetime health savings accounts. We believe we can do this while lowering premiums for everyone and creating an accessible, accountable, efficient and effective healthcare system, including a safety net for all, while preserving individual choice.

We have developed a dual market approach. A needs based LifeCare market on one side provides efficient, effective and affordable care to all with no networks. The choice based Quality of Life Care market provides easy access to all the additional care people want and provides portability, price transparency and certainty. We integrate both markets in a unique single point of access and administration that will lower cost of care in America by at least one-third.

If you would like to read additional information or the current draft of the whitepaper go to http://tloker.wordpress.com.