For the next three months, the Supreme Court will mull the constitutionality of the new health care law. At stake is the government’s requirement that its citizens buy private health insurance. But whatever the outcome, it’s a foregone conclusion that some fundamental change must be instituted in the financing of health care delivery.
Today, enormous sums of taxpayer money are spent on the administration of health care programs such as Medicaid. Those administrative costs could be sharply reduced and the savings put to what is really needed — providing health care. With the information technology available today, public agencies should consider eliminating their function as a government-run insurance operation and focusing their resources on paying providers to deliver care.
Consider Medicaid, the shared federal and state program for the poor. When Medicaid was created, it was designed to replicate the private insurance function. But the basic purpose of insurance is to protect the policy holder’s assets against a catastrophic event causing risk of personal bankruptcy. Because the very nature of qualifying for Medicaid requires recipients to first spend down their assets and then earn an annual income below a certain percentage of the federal poverty level, what assets is the policy protecting? The person doesn’t need health insurance. He needs health care.
When the government created Medicaid as a look-alike insurance product, it developed an oversight operation that has not kept up with what technology can do to make a system run more efficiently. And unlike private insurance, it built a system requiring monthly updates of each of its 50 million recipients’ eligibility, including filled-out and faxed-in monthly reports, income receipts, etc.