Thursday, March 18, 2010

The Stabler Health Cost Reduction Plan

I have identified four primary sources of the rise in costs - the impact of medical research (2/26/10), restrictive entry into medical schools causing anti competitive pricing (3/2/10), an over insured population (3/5/10), and tort law suits (3/9/10). These four issues must be addressed in order to contain health costs. Here are the components of the Stabler Health Cost Reduction Plan:

1. Medical schools must reorganize their teaching methods, particularly in the clinical programs, and use their impressive resources more efficiently in order to double or triple the number of doctors produced each year. If medical educators really put their mind to the project, I suspect that the additional tuition income would come close to covering the marginal costs of educating additional students. The economic savings coming from increased enrollments would significantly reduce costs, increase the availability of medical services and thus produce a far superior health care system.

2. I propose to limit tax deductible plans to those that pay no more than 80% of the ordinary medical costs with a 20% deductible paid by the insured. I believe that in most cases the cumulative savings from lower premiums would exceed the cost of paying the larger deductible. With low cost plans being the norm, universal coverage would be much easier to accomplish.. Moreover, the patient who has a 20% stake in the cost of medical services will pay much closer attention to how the money is spent. The Stabler Plan would allow greater, but not 100%, coverage for catastrophic expenses and would provide some sort of welfare payments for the indigent.

3. It is doubtful that the pace of medical research will ever happen, nor should it. The only way I can see that its effect on medical costs can be reduced would be to invest more public moneys into research to replace the work of pharmaceutical and medical equipment companies. Public investments do not need to be recovered out of the proceeds of sales. Nevertheless, the savings, if any, from that source would require much more investigation and study that I am capable of producing.

4. I see little prospect of material cost reduction coming out of tort reform as long as health care is dispensed in a noncompetitive environment. Therefore, the Stabler Plan requires that the supply of doctors and other health professions be dramatically increased before tort reform is included in the program. (See my discussion in the posting issued on 3/5/10). It would be unconscionable to give the doctors full immunity from the consequences of their tortious actions. Two features of tort reform have merit, however. Punitive damages deserve to be curbed, or even abolished. I believe that it is the province of the criminal laws to mete out punishment. The proper role of civil law suits is to compensate victims for their loss. Second, tort laws could be amended to give the medical professionals a good faith defense. Most medical procedures have a risk attached to them. The defendant who can prove that he or she acted in good faith and with diligence should be given a break.

1 comment:

Dorothy Scott said...

So sensible, no wonder it has not been proposed.