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POLICY: First Healthcare Reform Competition

As those of you who’ve been deep in this post know, Eric Novack has been looking for answers to the healthcare reform debate and he suggested that we have a competition among THCB readers to come up with a decent proposal. So here it is, and you’ll see that it focuses on the sectors of the health care system that Eric and I think are problematic.  Answers in the comments section to this post please, and look for the lcuky winner to be on the radio with Eric soon.

Background: How would you change the healthcare system? What would you be trying to achieve? Here is YOUR chance to have others see YOUR ideas!

Rules:

1. 250 words or less (i.e. 10-15 lines)

2. MUST address the following groups and areas

a. Group 1: 70% of the population that accounts for only 30% of all healthcare costs

 i. 210 million people spend $600 billion

b. Group 2: 30% of the population that accounts for 70% of all healthcare costs

 i. 90 million people spend $1.4 trillion

c. Group 3: 15% of all medicare dollars are spent in the final 3 months of life

 i. $50 billion

d. How would you change, if at all, the current tax laws that exclude the cost of healthcare for businesses but do not allow for the deduction of health insurance premiums for individuals?

 i. The value of the tax exclusion is $200 billion

3. Must be very specific

a. For example, just saying that the government should buy prescription drugs to lower costs is not good enough

Winner:

1. Winner will be chosen by a combination of votes from readers of the blog and judging from Matthew Holt and Eric Novack

Prize: 

1. The adulation of your peers

2. The opportunity to explain your plan to the public on The Eric Novack Show, a weekly radio program dedicated to healthcare policy and politics

CODA: I will delete comments that exceed 250 words or are not exactly on topic.  I’ll put up an open thread for those above.

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24 replies »

  1. There are several non-invasive changes that can be made to address all groups.
    1) Standardize a simple-to-learn categories of insurance. The premium category would mean all expenses covered. Perhaps a letter-based system. Policies could be rated AABD or similar. Categories could include long-term care, emergency care, prescription coverage.
    2) Standardize risk assessment categorizations. By law, there should be a stamdard way to query about risk, updated every 3 years or so. Combining this with #1 allows consumers to make intelligent choices, and forces insurance companies to compete in the same risk pool with the same information.
    3) Require licensed insurance companies to accept all applicants at some level of coverage.
    4) Require one open-source software system for all medical support systems.
    5) Permanently index the age of Medicare and SS benefits to the longevity tables.
    6) Phase-in the HSA concept mentioned by the poster above.
    7) Require 20% of all medical services and products to be for the uninsured. Index this to the rate of uninsured in the population.
    8) In return for #7, standardize award amounts for loss of life and limb. Eliminate predatory legal practices.

  2. From the available pool of money, reserve a certain amount for catastrophic/long-term/elderly care. Approval for this kind of coverage would be conducted by a local panel set up for this purpose.
    Reserve the rest for everyday healthcare such as annual checkups, purchase of medicine, minor surgery, and eye/dental care. Each citizen would have a certain dollar amount available, perhaps with proportionate availability based on age, with less available to younger people with fewer healthcare needs. Eliminate a huge portion of administrative costs by setting up an ATM system for distribution of benefits, and make spending one’s allotment entirely at the discretion of the citizen/consumer.
    Each individual would have an account based on his or her Social Security number, with statements printed out from local ATMs on request so that the account holder could check his or her balance. Possibly there could be an option for those with extra dollars left at the end of each year to donate some of their extra portion to others who are running low, or to choose to donate to the catastrophic/long-term program.
    Tax credits would be available for anyone whose needs were greater than those covered by his or her allotment but who covered those costs out of his or her own pocket.
    This plan obviously would not be welcomed by the insurance industry, but might go over well with healthcare providers, and it would certainly give a large measure of choice back to the consumer.

  3. Our first order of business is to separate the public from the private. Our inability to face up to the inevitability of a single-payer health care system has resulted in a weak and and inefficient crazy quilt of care. We bribe employers with tax breaks to provide healthcare for their employee, because doing so directly would be considered “socialized medicine”. Even when we are openly subsidizing the purchase of prescription drugs, we manage rope in private companies to “provide” the plan, adding an unnecessary layer of overhead, rent-seeking, and confusion simply to provide a little free-market lipstick on the pig.
    What’s public should be public. If we pull together all the taxpayer’s dollars subsidizing healthcare in different ways, we have enough to eke out a bare-bones single-payer plan the covers everyone. Only non-elective procedures will be covered. Copays should be applied strategically to discourage overuse. End of life care should focus on comfort and dignity rather than life-prolongment. What’s private should be private. Not a red cent of subsidy for medical care outside of the public system. Let providers freely compete to lower their costs and improve their standard of care.

  4. 1) Individuals should be responsible for purchasing their health insurance with HSA’s leading the way.
    2) Insurers should provide policies that allow individuals to budget their healthcare. An individual would know what his monthly premium would be over a fixed period of time say 2-5 years.
    3) A basic level of health coverage needs to be established by the government. This basic level would be the minimal coverage any company could offer. This would allow the consumer to know exactly what is and is not covered because this would be a universally known level of coverage. All insurance companies must offer a basic policy. If desired, they could offer more premium policies to differentiate themselves from the competition.
    4) Payment for services needs to be simplified. $30 co-payment for a patient initiated visit to a health care provider, $10 co-payment for a physician recommended follow-up or referral.
    5) Prescription medications need to be reformed. The U.S. Government should negotiate longer patents to pharmaceutical companies willing to lower their cost of medications.
    6) An individual’s insurance company could maintain a list of physicians and their costs to provide care.
    7) Physicians should be free to set their own fees and all payments are fee-for-service. Their fees would be separate from the insurance fee schedule with patients paying the difference.
    8) All malpractice cases must be brought before a panel of physicians before going to trial. Reasonable caps must be established on non-economic damages.
    9) All individuals should be issued smart cards.

  5. I believe our nation has overlooked a better approach.
    I have a plan that includes current reform efforts like Health Savings Accounts, World Health Organization strategies for implementation, the baby boomer and uninsured issues and HR 660, Small Business Health Fairness Act of 2003. This restructure vision is designed for implementation at no additional cost.
    This plan promotes hybridization of the socialized medicine concept and reinforcing consumers’ ability to pay, while retaining the advantages of a free market industry where demand and supply determine what is fair. By restructuring funds within our current system a free market will again reign, causing health care inflation to trend more toward traditional levels. Savings to the overall system, in terms of GDP, could be reduced by an estimated $2.8 trillion by the year 2010. This is quite a different outlook than what most legislation proposes, namely, to throw more scarce dollars at an already doomed system In summary, this paper gives thoughts to the restructuring of health care through:
    A health credit to all American citizens to use for health care options they desire that is funded solely by American businesses. Business costs would decrease for those currently funding employee health coverage and increase for businesses not currently funding employee health coverage. All Americans would have these funds placed in a personal Health Care Savings Account and would shop for health coverage based on their own personal needs. This new ‘focused expendable income’ when combined with allowing interstate commerce to market insurance products would promote more competition by insurers and providers. Since all Americans would have the ability to pay, providers can end cost shifting. Efficiency and service would become the tools most valued by those focused on profit. Unethical and incompetent providers and insurers will be sanctioned from over 80 percent of the industry, a huge improvement over the third of the market currently monitored through HHS. Providers would find it very difficult to hide their unethical behaviors from private pay organizations. ICD-10 and the move to the World Health Organization guidelines would also offer other opportunities for competition through the availability of alternative and complementary medicine.

  6. The problem
    1. People have been encouraged to believe that they have a right to as much as they want of whatever medical science can provide (driving up demand).
    2. Providers—physicians, hospitals, drug companies–operate as collective monopolies (greatly restricting supply).
    3. The incentives for most providers are to profit by providing (or denying!) services; only a few profit by actually maintaining health.
    4. Payment arrangements largely disconnect cost from benefit, depriving almost everyone involved of crucial feedback information.
    5. A pervasive and oppressive orthodoxy, enforced by the collective monopolies, prevents many promising innovations from becoming established, or even studied.
    The solution
    1. Remove all barriers to entry of new providers, products, and services. Require full public disclosure of relevant training, experience, and record (for providers) and validation and quality-level (for products/services, including, for example, hospital infection rates).
    2. Require every provider to maintain a public list of fees that are the same for all clients.
    3. Abolish all health insurance, except genuine health maintenance (where the provider and the insurer are the same entity) purchased directly by the consumer.
    4. Provide income support to people as judged necessary, but not specifically tied to healthcare. Eliminate all tax provisions related to healthcare.
    5. Institute a vigorous public education campaign to enhance the ability of healthcare consumers to make sound decisions.
    These steps, enabling all healthcare stakeholders to better determine where their actual interests lie, will strongly conduce to effective pursuit of those interests.

  7. Legalize euthanasia.
    Mandated national health insurance modeled after Medicare with a nationwide VAT source of revenue along with modest co-pays (>$20).
    A single point, web based billing system for all providers which would facilitate tracking and data collection.
    An annual $10 million dollar competitive award for the program demonstrating the most improved health for the least cost.
    Group medication purchasing with entity sizes of at least 10 million lives, but no maximum ceiling.

  8. Eliminate reimbursement for specialty hospitals and in office testing to include xray, lab, nuclear medicine, ultrasound, imaging such as MRI, and coronary arteriograms. The cost of overutilization associated with self referral is staggering and in the broad picture is destroying the ability of communities to sustain full service hospitals. Return hospitals to community control with local boards, certificates of need to avoid duplication of equipment. Reform the insanity of malpractice insurance by limiting noneconomic damages. Finally, short of national healthcare, address the no pay, uninsured, and Medicaid shortfalls by letting physicians “deduct” the equivalent cost of care using a pitiful but standardized fee schedule such as medicare with an additional release of liabilty for this gratuitous care.

  9. The fundamental problem with healthcare in America is quality control. Get the quality under control and the cost and accessibility problems will disappear. What is the fundamental obstacle to quality healthcare? – Practitioner variance. Physician practice patterns, particularly in medicine (as opposed to surgery) are more art than science. Physicians’ palate of choices for evaluation and treatment are constantly influenced by reimbursement, pharmaceutical companies, fear of liability, patients and family expectations and all those little individual maladies that make us human.
    We need to create a system that can (and does) define, enforce and incentivse quality care. I therefore propose the creation of a universal single payer system funded by taxes. All legal residents would be covered. Essential elements of this system would have to include mandatory use of electronic medical records, mandatory standards of care, clearly defined utilization restrictions and malpractice tort reform.
    In addition, I propose a significant and radical change in the administration and delivery of acute medical care: remove the independent practitioner from the hospital. In no other place are the inefficiencies, waste, over utilization and blatant abuse of the current system more evident than the hospitals of this country. This is where the money goes to treat group 2 and 3. It has been estimated that 60% of that care was unnecessary. Hospitals could then focus on creating an efficient and continuous delivery of care through the employment of specialists (hospitalists).

  10. I would question whether the grand topic of Healthcare Reform can be reduced purely to numbers and proposed tax laws changes, within 3 groups.
    Do not get me wrong, modifying the financing system is critical. However, this should not be the place to start a meaningful reform. What must come first is a hard look at the incentives of the players and the root causes of wasteful behavior. The waste is real, it is duplication of effort due to IT disconnect and excessive utilization driven by our pay-by-volume compensation model.
    What distinguishes healthcare from most other industries is a stunning lack of transparency over the practices, quality and pricing. If you are a consumer, how do you know what do you get for your dollar? Can you comparison shop? Can you take control and become a subject, rather than an object of the system? Finally, do providers really feel their pay tied to results and is the feedback real-time and very public?
    A successful healthcare transformation must start with opening up the system to real public scrutiny, striking down information barriers and giving consumers and payers effective tools to exercise their control. In government, sunshine laws have been critical to reducing corruption and have done wonders to change behavior. The Internet and blogs can enable similar changes to healthcare.
    We need to start the movement towards Open Medicine, and the changes to financing system will follow. Our site is dedicated to spreading these ideas:
    Open Medicine vs. Single-Payor Healthcare
    http://www.healthvoices.com/blog/hippocrates/2005/11/19/open_medicine_vs_single_payor_healthcare

  11. The focus of health care in the U.S. must shift to prevention (that 70% of the population) rather than intervention (the 30% of the population overspending their “individual allotment”) of disease processes.
    Another key facet is health care cannot provide all things to all people of the U.S. population. The Oregon Health Plan provides a substantial look at limits to consider in providing health care. Limits must be placed on, for example, premature births, end stage renal disease, life support in an ICU setting, and surgery for geriatric populations. It sounds harsh, and it is; however, as we’re proving to ourselves, our resources are not infinite.
    The current U.S. health care system will be unsustainable fairly soon in our futures. I can’t speak specifically on tax law, but one law that needs to change is the spend-down and transfer of assets allowing individuals to attain eligibility for Medicaid for nursing home care. This is an unwarranted burden to tax payors.
    Finally, the concept of employers being responsible for health care originated in the 1930’s; it’s time to update the process and make individuals accountable for themselves.

  12. Congressional action is unnecessary. The healthcare crisis was created by national tax policy that favored employer-provided insurance. That policy was upended when recent bureaucratic rulings established Health Savings Accounts.
    Now the focus shifts. States should legislate that employer-paid insurance premiums be redirected to employees thus: First, toward paying the premium on an employee’s personal high-deductible policy; second, toward maximizing an employee’s permitted HSA balance; third, toward taxable income. Employers neither gain nor lose.
    Simultaneously, all health insurance companies should be required to price high-deductible policies offered exclusively to huge groups, say all females aged 18 to 25 or all males aged 55-65. During a grace period of 90 days, all state residents should be guaranteed access to their respective group regardless of pre-existing conditions.
    To facilitate the transition, younger employees’ premiums should be priced higher than actuarially indicated, enabling reduced premiums for older employees. This “subsidy” should be phased out gradually as HSA balances build.
    Anyone purchasing a policy before age 19 should receive clean policies. Those who wait become subject to pre-existing condition riders, as do all who fail to enroll during the grace period. An insurance company bidding for additional business could not introduce new riders but could waive existing riders.
    Finally, massive state healthcare expenditures should be redirected toward maintaining premium payments for those unable to maintain their own coverage.
    All sane citizens would seek these policies, since they could maintain coverage regardless of employment. Healthcare economics would improve drastically as well.

  13. The only permanent cure to the health care crisis that also opens virtually unlimited opportunities for improving the quality of health care is to address the issue of labor utilization inefficiencies. This can only be done, to the degree necessary, by large-scale computerization of the entire health care system’s information flow-, analysis- and storage systems. This work would need to be done by a single software source, using sub-contractors, that produces open-source software as the final product. This strategy is essential in order to avoid software incompatibility problems, monopoly problems, and endless haggling and blame-games among software vendors. The work would need to be done under a contract administered, probably, by an office within Medicare. The few tens of billions of dollars worth of one-time software development, plus a few tens of millions of dollars in annual management, maintenance-, development- and update costs thereafter, could produce direct benefits of roughly $500 billion dollars annually plus significant peripheral benefits. The only cost to the health care system itself would be perhaps $100 per health-care professional for small hand-held computers that would permit data entry right at the point of service. The overall software would have to insure that all data, once entered into electronic form, would never again need to be treated manually until the end-use. The health care system’s present computer inventory is probably already sufficient for the task. Thus any taxpayers’ investment would be recovered within a few months.
    (See http://home.alltel.net/bsundquist1/hcc.html for details.)

  14. Solutions For Fixing The Health Care System
    First course of action is to turn our entire health care delivery sytem over to Kaiser Permanente. They have the greatest expertise in health care delivery on a mass scale. Their physicains are salaried. They would have to change from a non-profit organization to a public company with access to the equity markets.
    Second solution is to gather the executives at Wal-Mart, McDonald’s, Lowe’s and Home Depot. There are other companies available. Pick their brains as how to put together a uniform and wide distribution system for cost effective health care.
    The days of the private office or complex and individual free standing hospitals need to come to an end because they are not cost effective in that they do not have sufficient capital to make their services affordable. The government at all levels need to exit the health care business and leave it to private and or free enterprise. Medicare/Medicaid are not capitalistic programs and that is why they are failing. Just witness the chaos the new drug benefit plan is causing.

  15. Recommended Changes
    1. Eliminate current Medicare reimbursement schedules and methodology
    2. Create “Medicare – Catastrophic”. Medicare becomes single payer and covers costs of catastrophic care.
    3. Change age to receive Medicare benefits to 70.
    4. Change FICA taxable income limit to $150,000.
    5. Create “Extended Hospice Care” that allows individuals to opt out of lifesaving care for terminal illness and pays for Hospice and money to the individual or benefactors.
    6. “Authorized Medicare Providers” submit fee schedules to be charged to ALL patients. Medicare pays the average fee of all providers. Providers that charge more must collect the difference from patients. Fee schedules are made public.
    7. Outlaw Insurance Provider Networks and HMO’s.
    8. Insurers must pay at least the average fee charged by Medicare to “Authorized Medicare Providers”.
    Effects of Changes
    1. Increased price competition (translates to lower costs) due to open bidding system and elimination of exclusive contracts. Reduces costs for all groups.
    2. Reduce costs for final three months of life through Hospice program. Reduces costs for all groups, directly for groups two and three, indirectly for Group one.
    3. Insurance companies will likely require patients to pay the difference for providers who charge above Medicare average rates, thereby reducing Group two’s expenditures.
    4. Catastrophic program allows insurance companies the ability to provide similar premiums to all people at a lower cost, making insurance coverage more attainable for a larger population.
    5. Increased Medicare costs funded by changes in age and income limit.

  16. All groups mandated to participate in health savings accounts, which are passed onto heirs income tax and estate tax free. Excess amounts based on actuarial projections can be withdrawn tax-free above a threshold for any purpose.
    All medical expenses and health insurance premium paid from health savings accounts.Patients determine how much health insurance and what type of health insurance to buy (catastrophic, traditional, government provided insurance-Medicare, Medicaid)
    Employers and employees may contribute pre-income tax to health savings accounts. No employer provided direct health insurance. No ‘family accounts’, only individual accounts. Contribution limits (if any) determined by a non-partisan government panel with a thumbs up or down by Congress (like base closings.) Cash portion investable similar to Federal Employees Thrift Savings Plan.
    Individual providers have only one fee schedule, but may charge whatever the market will bear (Not multiple fee schedules for Medicare, private insurance, etc)and must provide fee information before the service upon request
    Individuals decide phase in time within limits, may make accelerated contributions during this time.

  17. 1. Provide basic catastrophic health insurance through a single payer plan (100% Government, 100% Private or 100% Govt. with 5-10 large TPA’s running the thing).
    2. Provide incentives to ration use of services in the case of terminal disease or end of life. Have a dollar amount that can be used to comfort the individual with extra monies going to the afflicted individuals estate to be passed on without estate tax upon death or use the amount for extending the life of the afflicted as long as possible.
    3. Incentivize employers (tax credits or other)to provide more prevention and disease mgmnt through web based and other community programs. Unemployed can be seen by tax credit incentivized providers. Many of us spend more time at work than elsewhere).
    4. Through open source style web based programs create provider accountability with a 2 part provider grading system (part A for JCAHO style grades, part B for consumer/user grades on perceived value).
    5. Deploy large scale HIT for EMR’s as well as for development and use of care and prevention guidelines. Same technology could be used by the employers in #3 above.
    6. Create an incentive for the insured that if they stay healthy they will get to keep a portion of their allocated health dollars or apply them to another family member.
    7. Allow for as true as possible market based alternatives for those desiring to spend their dollars on “perks” (acupuncture, massage, chiropractic, unproven drug therapies).

  18. 1) Restructure existing tax system incentives (and disincentives), effectively ending business credits for health insurance provision in return for predictable cost (tax bills). At 10% to 13% annual premium growth, a critical mass of businesses can be enticed into supporting what are in effect higher taxes but lower total costs. Individual premiums would come out of pre-tax dollars.
    2) Limit jury awards for malpractice (similar to California), thereby reducing pressure on physicians by slowing growth in malpractice insurance costs, but more importantly, do so in return for a Kaiser-esque system in which physician risk exposure is reduced in return for better adherence to guidelines and clinical evidence and centralized outcomes reporting.
    3) Pool risk nationally to spread costs more efficiently and broadly and establish a minimum basket of covered services, including access to compendia-supported cancer treatments. Establish independent coverage body similar to Fed, with “governors” drawn from several regions characterized by different demographic, socioeconomic, and epidemiologic profiles, thus ensuring an appropriate basket of services. Eliminate state coverage mandates and insulate governors from congressional and political pressure.
    4) Institute cost-effectiveness analysis at the national level, integrating QALY and similar analyses into national coverage decisions. Nothing shown to be cost-effective ($100k/QALY or less) could be excluded from national coverage.
    5) Encourage private insurers to manage large populations in return for a per-member fee. Similar to the new Part D benefit, allow insurers to offer richer benefits. In addition, allow individuals to buy more coverage if desired.
    6) Require every American to obtain basic coverage. Everyone at or above 150% of the FPL would be required to pay premiums. Those below 150% would obtain subsidized coverage. Premium levels would be slightly adjusted for age and risk profile, but such adjustments would be limited, given costs likely outweigh benefits in context of national risk pool. Individuals opting out of health management programs for chronic illnesses incur higher monthly premiums.
    7) Introduce modified reference pricing for drugs and medical technology. First to market sets price. Second to market must be superior in head-to-head trials or accept a price 10% below that of market leader. Subsequent entrats must either demonstrate head-to-head superiority against the first (reference) agent or accept a price 40% (or lower) below that of the referent. Incentives to innovate remain; me-too agents no longer so lucrative. Cost-sharing for baseline coverage will be modest, reflecting positive moral hazard theory. Cost-sharing for supplementally covered therapies or interventions set at the discretion of the insurer.
    8) Transfer regulation of food nutritional content to the FDA, thereby splitting it away from the USDA and eliminating the existing conflict of interest (promoting agriculture v. regulating nutrition).

  19. Health care’s deepest problems are the industry’s high fragmentation and the enterprise’s lack of management infrastructure. The resulting complexity and lack of transparency encourages organizational opportunism without regard for cost, quality or access. The solutions:
    – To manage cost and quality, retool the system with 6 approaches: 1) Standardize measurement/disclosure of pricing/performance throughout the supply, care delivery and financing continuums; 2) Finance/implement interoperable IT platforms; 3) Cultivate evidence-based medicine and management; 4) Establish pre-market technology assessment and post-market surveillance; 5) Rebalance pricing to discourage clinical opportunism; and 6) Tie pay to processes/outcomes.
    – To stabilize the deteriorating safety net, reduce system complexity and open access, establish a floor of coverage for basic care – “basic” must be defined – available to everyone in America and financed from taxes. Commercial health plans would still offer individual/group comprehensive coverage, with advanced/recoverable tax credits tied to expenditures (for coverage and care) as a percentage of total income.
    – To promote individual responsibility, “meaningful consumerism” and informed decision making, make pricing/performance information publicly available. To promote corporate responsibility/fair markets, restrict marketing practices that encourage unhealthy lifestyles (e.g., fast/prepared foods) and inappropriate care practices (e.g., DTC drug advertising).
    – Rebalance the health care liability system so patients are protected but the system remains intact. Revamp health care litigation with expert medical courts focused on evidence, validity and reliability. In clinical settings, get serious about quality.
    Mobilize influencers to give expression to these approaches through policy adjustment and rapidly implemented regional programming.

  20. I e-mailed this previously to Matt and will post a shortened version of my proposal here.
    Elective insurance rebates
    Health insurance should be split into two types of coverage: elective and non-elective. Elective insurance covers all procedures and products which give consumers options to choose among and are not time-sensitive. Non-elective insurance covers those procedures and products which because of time or circumstance do not allow for consumer options and are time sensitive.
    In the elective insurance market insurers need to incentivize a significant fraction of consumers to hold down treatment costs. One possible solution would be to rebate to consumers a portion (~25%) of the money saved should they choose the less costly option. That amount would be deposited into a Health Savings Account (HSA) to be used for payment of non-covered medical costs. The patient would be allowed to choose the more expensive treatment, but would forego any rebate for doing so.
    The rebate would be deposited into a HSA to be used tax free for other medical expenses. One advantage of this system is that it would benefit lower income patients because they could potentially receive rebates that would dramatically offset their out-of-pocket costs.
    One advantage to this method is it puts the decision on the choice of treatment at the retail level with the individual patient the final arbiter instead of distant private or public sector bureaucrats who may not be totally aligned with their interests.
    To prevent fraud and abuse, the doctor will have to certify that the treatment is medically necessary and the total payout will be capped.

  21. • All Americans mandated into a non-profit managed care organization (one per region).
    • MCO provides entire range of acute, long-term and behavioral health care services including pharmacy. MCO has flexibility to provide other services not typically considered health care services but which would reduce costs or improve outcomes (such as refrigerators for poor people, without which meds would spoil; transportation to appointments; etc).
    • MCO contracts with any provider willing to accept its rates and meet standards. Rates and standards are federally-approved.
    • MCO uses typical range of managed care practices: utilization review, provider profiling, etc
    • Premiums paid annually via federal tax return. Businesses also contribute via a federal tax. All health care credits and deductions disappear except credits for poor individuals.
    • Group 1: Costs addressed via availability of PCP (“medical home”) for primary and preventive care; prior authorization requirements for other types of care; availability of data on full range of an individual’s health-related care.
    • Group 2: Costs addressed via better integration of care (interdisciplinary care coordination teams that lead development, implementation and monitoring of care plans which address full range of needed care); provision of home and community-based services that reduce, delay or prevent the need for hospital, ER and nursing home care; specialized case management teams for high-risk pregnancy and catastrophic conditions; clinical guidelines for specified conditions; availability of full range of data.
    • Group 3: Costs addressed via same mechanisms as for Group 2 as well as universal availability of hospice, requirements to complete a living will.