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America’s Healthcare System – Part 14
A New Vision for Rebuilding the American Healthcare System
This is the 14th and final essay in Civic Way’s series on the US healthcare sector. In this essay, we set forth some long-term ideas for fixing American healthcare, including ideas concerning related programs. The author, Bob Melville, is the founder of Civic Way, a nonprofit dedicated to good government, and a management consultant with over 45 years of experience improving public agencies.
If we get the chance, we should create an entirely new healthcare system from scratch, one that puts prevention, people and outcomes first.
We should create a fully integrated public health and healthcare system that treats prevention and treatment as part of a single continuum.
We should put patients before providers and insurers, by making the industry more competitive, empowering individuals to do more, requiring the government to represent the public interest and expanding services provided by primary care clinics.
We should establish a national network of primary care clinics that serves all Americans, mount a healthcare infrastructure initiative to bring facilities to people and realign healthcare resources with consumer needs.
We should replace Social Security, Medicare and Medicaid with a unified national healthcare and retirement system, including Life Savings Accounts (LSAs) for all citizens and a two-tier universal health insurance model (one for catastrophic care and the other for managed care).
Every year, Americans pay twice as much for healthcare as citizens of other developed nations. Given how much we spend, we should have far better health outcomes than other nations. Sadly, our outcomes are actually worse, and the health gap between the US and our peers is worsening by the year.
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There are many reasons for this. Too little prevention (and public health capacity). Uneven healthcare access and quality. Fragmented and unevenly deployed healthcare resources. An unsustainable healthcare financing (insurance) system. Profit-driven (instead of people-driven) innovation. Antiquated administrative practices.
In this essay, we introduce some bold ideas for building a new people-centric healthcare system. These ideas are embryonic and can be easily dismissed as impractical given our current politics. However, they should be strongly considered and fully vetted if fortune affords us a clean slate for reforming healthcare.
The US healthcare system is so flawed that incremental improvements will not likely save it. And our politics are so dysfunctional that even small changes exhaust us. We recommended several short-term improvements in our last healthcare essay but offer some more transformative ideas here.
What if we could design an entirely new system from scratch? What if some future events are so disruptive that impractical but transformative ideas become feasible? What if the current system becomes so costly and inadequate that returning to the drawing board becomes our best option?
On that day, we will have the chance to design an entirely new system de novo. One that emphasizes preventing illness, serving patients, aligning resources with needs, paying for outcomes, and rewarding efficiency. One that builds on our current system’s strengths and, at the same time, jettisons its defects.
Any strategies for building a new healthcare system should include the following:
Prevent people from becoming patients
Put patients before providers and insurers
Realign healthcare resources with consumer needs
Restructure healthcare financing (insurance)
Our nation has long favored reactive care over prevention. Deferred to physicians. Turned to third parties and quick fixes for cures. Deployed resources around provider needs more than patient needs. Expected employers to provide health insurance and individuals to bear most other healthcare costs. And these traditions seem immutable. But are they?
What would our healthcare system look like if we could start anew? Here is one possible scenario.
Prevent People from Becoming Patients
For starters, the US would have a fully integrated public health and healthcare system. A true system, one that treats prevention and treatment as part of a single continuum. One with a cohesive, overarching goal–to secure the world’s best health outcomes[i].
How can we best shift our focus from treatment to prevention? Here are some possible initiatives.
Organizational – Design a regional (multi-state) network that will fully integrate public health and healthcare entities. Designate community-based primary care clinics as the focal points for coordinating public health and healthcare resources and services on behalf of patients.
Resources – Eliminate the traditional barriers between public health and healthcare. Co-locate public health resources with healthcare resources. Deliver public health services through primary care clinics and other facilities where people live, work or learn (e.g., schools, community centers and private hospitals).
Programs – Coordinate public health programs through the national healthcare plan. Design and fund prevention programs to address all vital health factors, including social determinates[ii].
Legal – Change laws and regulations to promote prevention. Enact enabling legislation for implementing the new public health model. Toughen regulatory standards (e.g., processed foods). Impose gun safety laws. Decriminalize drugs (e.g., marijuana). Enable disincentives (e.g., taxes on unhealthy foods).
Funding – Equalize public funding for prevention and treatment. Increase other public health investments. Expand taxes and fees on high-cost or high-risk products (e.g., taxes on cigarettes, alcohol, soda and processed foods).
We need a wide range of smart strategies to build a new healthcare model at the intersection of community health and individual health. Those listed above are just the start.
Put People Before Providers (and Insurers)
Despite the oft-misleading political rhetoric about patient choice, healthcare control in America is essentially a function of one’s wealth. Many insurance plans give individuals the illusion of control, but, unless one is wealthy or prominent, insurers and providers are in the driver’s seat.
How can we change this dynamic? The first step is to subject insurers and providers to serious market competition. This will require the government, acting in the public interest, to enforce anti-trust laws, prevent monopolies and oligopolies and root out anti-competitive practices. By increasing competition, the government can make it easier for consumers to exercise more control over their healthcare.
Secondly, individuals must have a far greater role in shaping healthcare quality, access, service and costs. They can take many actions themselves—become more informed about health risks, make healthy choices about diet, exercise and weight, and stave off the conditions that bring chronic disease. As patients, they can track their symptoms and research diagnoses. They can challenge the paternalistic physician culture, address doctors by their names (not their titles) and prepare for provider visits. They can ask good questions and take thorough notes. After being treated, they can track their tests, medications and progress.
Third, the government must put people first. It can urge (and even incentivize) insurers and providers to standardize and improve consumer health information. It can design and establish Life Savings Accounts (LSAs) to help consumers pay their healthcare costs (e.g., borrow against future LSA contributions to pay non-catastrophic costs exceeding the LSA balance). It can make robust governmental contributions to the LSAs and offer bonuses for healthy lifestyle choices and outcomes.
Government, working with insurers, providers and nonprofits, should mount a national initiative to ensure citizen access to providers, services and medications—through primary care clinics. A national health hotline. An Uber-like system for scheduling primary care visits. A free app for tracking appointments and medications. Mobile treatment units. Convenient public transportation. More accessible prescription drugs (e.g., preferred drug lists and early drug refills).
Finally, primary care clinics should offer a full range of care options and deliver those services in accord with universal service standards. Basic options like self-care, home care, remote care, physical therapy, maternity care, mental health, addiction treatment and dental health at no cost. Premium options for private payers.
Realign Healthcare Resources Around Patient Needs
Healthcare resources, like public utilities, must be located where the people are. With government support, providers must reorganize and redeploy their resources around people. And the federal government should help public and private providers build a national network with regional and local structures.
Government cannot lead healthcare reform without first refocusing its role. The federal government, for instance, must transition from rowing (direct service) to steering (coordination). Sell or privatize federal healthcare facilities like VA centers (in a way that meets the needs of our veterans and their families). Strengthen regulatory practices for insurers and providers. Exploit antitrust laws to promote competition. Influence key quality and cost levers like patents, medical school slots, immigration and price caps.
State governments also need to steer insurers and providers within their borders. Enter interstate compacts to spur multi-state cooperation, marketplaces, inspections and information centers. Enact laws to spur competition. Adopt regulations to improve healthcare quality, access and equity across counties. Standardize licensing rules across states. Accelerate the production of generic drugs. Publish available data (e.g., outcomes and costs). Counties should take the lead in promoting healthy lifestyles, keeping people informed of vital public health issues and building local partnerships.
Primary care must be the backbone of our integrated public health and healthcare system. It should serve as the gatekeeper for connecting people with healthcare resources, and as the lynchpin for realigning healthcare resources around people. Governments should enact enabling laws and regulations model. Insurers should modify their offerings to reflect the centrality of primary care (e.g., standardize services and funding options). Government, insurers and providers should coalesce around a universal primary care model like a privatized version of the Federally Qualified Health Centers (FQHC)[i].
Government, insurers and providers should work together to establish and fund a national network of primary care clinics that serves all Americans. This will entail negotiating siting contracts with private providers (e.g., hospitals and clinics). To resolve gaps, it may involve co-locating clinics with community facilities (e.g., public schools, public housing authorities and nonprofit senior centers). It will most certainly require co-locating public health units at primary care centers and allocating significant public health funds to primary care centers.
The primary care clinics should be reorganized and expanded to fulfill their new mission. They should administer local public health programs, help their clients maintain healthy lives, support related public programs, offer preventive services like check-ups, screening, and lab tests, and serve as the gatekeeper to the full array of specialized healthcare resources. Each clinic should tailor its staffing to local needs[ii] and engage community partnerships as needed.
Our country must mount a healthcare infrastructure initiative. Build an efficient national-regional system for determining and meeting infrastructure needs. Use a standardized formula for prioritizing facility needs (e.g., facility/population ratios) and ensuring good healthcare access (e.g., no more than a 60-minute drive for at least 90 percent of all citizens). Establish regional healthcare infrastructure banks and government-backed loans for financing priority projects (e.g., facilities in underserved areas).
The national infrastructure initiative should emphasize more agile design criteria and floor plans. Flexibility for quickly adjusting to changing needs (e.g., pandemics). Flexibility for converting rural hospitals into smaller urgent care clinics or transfer centers as consumer demands change. Better aesthetics for people (e.g., space, light and air quality). Greater resilience for climate change. More renewable energy use.
Restructure Healthcare Financing
The US should replace Social Security, Medicare and Medicaid with a unified national healthcare and retirement system. And this will require sweeping changes: A new funding model. A progressive contribution schedule for individuals. A tiered contribution system for businesses including a minimum head tax and a supplementary contribution for attracting employees. A self-balancing financing system to reserve excess returns during good times and trim benefits during downturns. Tax code changes.
The Life Savings Account (LSA), which could mirror the 401K, will be the cornerstone of the new universal system. The federal government will establish an LSA for every citizen. Citizens will be able to increase their LSA balances in four ways—working, investing, voting and living healthy.
Working – paying a mandatory percent of income every year through payroll deductions or taxes
Investing – making voluntary supplemental contributions (tax-free)
Voting – earning bonuses from federal and state governments for voting
Healthy Living – earning bonuses for attaining selected health metrics every year
The federal government should make three annual contributions to the LSAs—a basic defined contribution tied to income, the bonuses and a matching contribution tied to the supplementary investments. The basic defined contribution should be structured on a sliding scale (e.g., full funding for those below 200 percent of the poverty line and declining partial funding as income increases).
People should have more control over the LSAs than they do their social security accounts. For example, they should be allowed to invest a small portion of their LSAs based on a standard menu of investment plans and change investment vehicles at any time. They should be allowed to withdraw or borrow against LSA funds for any valid purpose (e.g., healthcare, childcare, education, housing or business start-up). They should be encouraged to use the LSAs to accumulate assets and, upon death, bequeath them to their beneficiaries.
With the LSAs in place, the US should move from the current group insurance model to a more flexible individual insurance model[i]. It should phase out the public insurance programs like Medicare and Medicaid over time to minimize disruptions to current recipients. It should adopt a managed competition model, enforcing anti-trust laws and regulating private insurance programs in accord with established standards[ii].
The new universal health insurance model should have two tiers, a Tier 1 Managed Care Plan designed to help people stay healthy and a Tier 2 Umbrella Plan designed to protect all citizens against the catastrophic costs of unanticipated injuries and illnesses. The Tier 1 Plan, by encouraging a greater focus on prevention, should ultimately (and significantly) reduce the costs associated with the Tier 2 Plan.
The Tier 1 Managed Care Plan would cover most preventive services, many routine procedures and basic end-of-life care. By reimbursing providers based on outcomes (instead of procedures), it will incentivize providers to keep patients healthy. It won’t cover everything, but individuals could use their LSAs to pay uncovered costs. It should persuade providers to expand preventive services and reduce cost-sharing. It may even enable providers to add services (e.g., vision, dental, mental health and long-term care).
The Tier 2 Umbrella Plan should be financed through individual premiums based on age, income and wealth. Premiums could be subsidized on a sliding scale to reduce cost sharing and maximize enrollment. The plan, by capping costs, should encourage providers to treat Tier 2 plans as loss leaders. Covered Tier 2 treatments and medications should be clearly defined and regulated. The Tier 2 Plan also should include a reserve fund for helping mitigate any patient debt and eliminate the insecurity that plagues the current system.
Finally, we must market the plans to maximize enrollment. This will require several steps. Rebuild the regional healthcare marketplaces. Require insurers to sell—and consumers to buy—plans through the marketplaces. Make the LSA accounts contingent on securing health insurance. Provide automatic enrollment mechanisms (e.g., public licensing and tax systems). Increase marketing and outreach budgets. Expand public information.
A new healthcare/retirement system offers astounding benefits. Better outcomes. More accessible, equitable care. More responsive service. More stable, sustainable financing. More affordable care. Less debt. Fewer work absences. Higher business profits. And more people able to start new businesses or invest in the future.
The new system, smartly designed and implemented, will cost us no more than the current one—and with far better results. Reducing healthcare costs from 20 percent of GDP ($5 trillion) to 15 percent of GDP ($3.5 trillion) would save about $1.5 trillion. These savings would offset the combined annual deficits for Social Security and Medicare (about $950 billion) and cover the costs of significantly increased investments in public health and primary care. Spending more on prevention will significantly reduce treatment costs.
There are two other reasons for transformational reform. First, reforming healthcare is a prerequisite to improving our nation’s outlook—making us a more equitable, productive and competitive nation. Second, it will be a unifying force for a badly divided nation, making healthy living a responsibility and quality healthcare a birthright for all Americans. If we can fix healthcare, we can fix anything.
[i] The group insurance model often binds insurance—and the employee—to an employer thereby discouraging people from changing jobs or starting a new business. A mobile individual insurance model would free individuals to make economic decisions without the threat of losing health insurance.
[ii] The insurance plan standards should ensure that coverage, especially for the umbrella plan, is unaffected by pre-existing conditions, lifetime limits or other factors beyond the beneficiary’s control.
[i] The federally funded FQHCs, nearly half of which serve rural Americans, offer primary care and other outpatient services to 30 million people.
[ii] While the numbers will vary, most teams should include physicians, physician assistant, nurses, nurse practitioners, physical therapists, social workers, mental health workers, public health workers and dental therapists.
[i] The US should—but does not—have a top global ranking in key outcome metrics like life expectancy, preventable death, maternal/child mortality, obesity, chronic disease and cancer rates.
[ii] Such programs should include socio-economic programs (e.g., education, employment and community safety), behavioral programs (e.g., exercise, food, tobacco-alcohol use and sex education) and environmental programs (e.g., air-water quality, housing, transportation and parks).
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