A Novel Approach to Healthcare
Well, for my first blog post, I've decide to start with something easy. I'm going to lay out my plan to solve the healthcare problem in America. No matter your political stripe, one thing most of us agree on is healthcare should be accessible to more people and it should be cheaper. To those ends, I've devised a plan that I believe will accomplish those goals.
I started with the premise that people don't really care about having health INSURANCE. What they really care about is healthCARE. This is a very important distinction that, quite frankly, tends to cloud and confuse the discussion about revamping healthcare in this country. Quite simply, people want to be able to go to the doctor whenever they're sick and pay as little as possible. In addition, we want to know that if we have a health crisis or emergency, the treatment will not leave us buried under mountains of debt that we can never hope to pay back.
Step One: Take the amount of services rendered in a doctor's office in a typical month. These would include doctor's time and diagnostic services (x-rays, blood work, etc.) These would be numbers arrived at by the doctors themselves, however, as we will see in a minute, there's going to be real competition, so it behooves them to keep those charges at a reasonable level.
Let's start with a doctor's time. Right now, the hourly rate at a typical auto mechanic runs somewhere in the neighborhood of $125/hour. Granted, that takes into account not only the mechanic's salary, but profit for the owner, as well as shop overhead and upkeep. Even so, I'd like to posit that a doctor who diagnoses human maladies is worth sightly more per hour than the person changes the brakes on your Hyundai. Call it $150/hour. The question about how many patients the average GP sees has as many answers as there are doctors. Some see as few as 15, while some see as many as 60 in an eight-hour period. The most popular response seems to be between four and five patients per hour. That would be between 32 and 40 per day. Let's split the difference and call it 36 in a typical day. That works out to $33.33 per patient consultation. To me, that sounds like a reasonable price. That works out to an annual salary of $249,600. Not too shabby, but don't forget, they have malpractice insurance and, most likely, student loans that are almost certainly somewhere between $250,000 and $500,000. I also realize many doctors make a lot more money than that, and they would certainly be able to continue to do so, just remember, we're going to have REAL competition, so I will also have the ability to change doctors for cost reasons.
Now we add in the overhead of the office itself. In our example, we're going to use a small group consisting of four doctors, so we're going to need a support staff of the size needed to run and staff a practice of that size. Let's say we're going to need one person for the front desk, one billing person, and one person who could "float" between the two jobs as needed. Each doctor will need a nurse, plus one more nurse to bring patients back and get them settled in the exam room. So, five nurses at $80,000/year is a total of $400,000/year. You're going to also need a technician for each ancillary diagnostic service that's available in the office itself. For our purposes, let's say they have only X-rays. I'm going to make some educated guesses here and allocate $200,000/year for our support staff and technician. In addition, we've got rent, utilities, equipment, upkeep and supplies. Let's allocate $15,000/month for those. That's another $180,000/year. IMPORTANT NOTE: These numbers may actually vary in "real life." I'm just plugging in numbers to show how the system would work.
Step Two: Determine how may times per year people are going to see the doctor. We are going to exclude Medicare and Medicaid, as well as well as OG-GYNs and pediatricians. At our rate of 36 patients per doctor per day, we come up with 900 visits per week and 46,800 visits per year. Since each person averages roughly 3 trips to their GP every year, that leaves us with 15,600 actual patients.
Step Three: Total yearly expenses and divide by 12.
Doctor Salaries $83,200/month
Nurse Salaries $33,333/month
Staff Salaries $16,667/month
Office Expenses $15,000/month
----------------------------------------------
Total $148,200/month
Step Four: Divide monthly expenses by the number of patients.
$148,200/15,600 = $9.50/month
Step Five: Enjoy!
There are a couple of additions that need to be made. I would do an age adjustment based on the average number of trips for each group. For example, if a 53-year-old person averaged 6 trips per year versus the average of 3 trips, then that would be 100% over the average and that person's monthly rate would rise 100%, from $9.50 to $19.00. Conversely, if a 30-year-old averages 1 visit per year, then their rate would drop accordingly. In this case, it would go down by 66.67% to $3.17.
Another question is that of specialists. Simply put, each specialist, just like our GP's office, would have their own office rate based on their expenses and number of patients. Then, whenever you were referred to one of them, you would simply pay their office rate each month you saw them. so, for example, if you needed to see you gastroenterologist and his office rate was $14.00, that's what you would pay. You wouldn't pay that again unless you needed to see them the next month, at which point you'd pay $14.00 again.
What about hospitals? Here, we have a couple of options. Hospitals could adopt the same model and you could effectively have "hospital insurance." This would also bring expenses down as the market would be opened up to true competition. We could also throw insurance companies a bone here and allow them to sell catastrophic coverage that would cover hospital visits.
What about Medicare? What about Medicaid? Prescription drug prices? All great questions, and they all need thoughtful analysis and serious proposals. Since I solved my part, I'm willing to let someone else pick up the ball and run with it.
In conclusion, I know my plan has zero chance of being implemented. I know there's flaws. I know some of the numbers are probably wrong. Let's say my math was way off. Let's say everything is five times the cost of my examples. Under that scenario, my monthly insurance would still be under $100. I don't know about you, but I'd take that in a heartbeat. Sure beats the hell out of the $1750/month I'm spending now for my family.
Look, I'm not that smart. I didn't have all the numbers and actuarial tables at my fingertips. Most importantly, this plan took me about five hours to design and write about. Seriously. We can do better. Mr. President, Congress, the ball's in your court.
I started with the premise that people don't really care about having health INSURANCE. What they really care about is healthCARE. This is a very important distinction that, quite frankly, tends to cloud and confuse the discussion about revamping healthcare in this country. Quite simply, people want to be able to go to the doctor whenever they're sick and pay as little as possible. In addition, we want to know that if we have a health crisis or emergency, the treatment will not leave us buried under mountains of debt that we can never hope to pay back.
Step One: Take the amount of services rendered in a doctor's office in a typical month. These would include doctor's time and diagnostic services (x-rays, blood work, etc.) These would be numbers arrived at by the doctors themselves, however, as we will see in a minute, there's going to be real competition, so it behooves them to keep those charges at a reasonable level.
Let's start with a doctor's time. Right now, the hourly rate at a typical auto mechanic runs somewhere in the neighborhood of $125/hour. Granted, that takes into account not only the mechanic's salary, but profit for the owner, as well as shop overhead and upkeep. Even so, I'd like to posit that a doctor who diagnoses human maladies is worth sightly more per hour than the person changes the brakes on your Hyundai. Call it $150/hour. The question about how many patients the average GP sees has as many answers as there are doctors. Some see as few as 15, while some see as many as 60 in an eight-hour period. The most popular response seems to be between four and five patients per hour. That would be between 32 and 40 per day. Let's split the difference and call it 36 in a typical day. That works out to $33.33 per patient consultation. To me, that sounds like a reasonable price. That works out to an annual salary of $249,600. Not too shabby, but don't forget, they have malpractice insurance and, most likely, student loans that are almost certainly somewhere between $250,000 and $500,000. I also realize many doctors make a lot more money than that, and they would certainly be able to continue to do so, just remember, we're going to have REAL competition, so I will also have the ability to change doctors for cost reasons.
Now we add in the overhead of the office itself. In our example, we're going to use a small group consisting of four doctors, so we're going to need a support staff of the size needed to run and staff a practice of that size. Let's say we're going to need one person for the front desk, one billing person, and one person who could "float" between the two jobs as needed. Each doctor will need a nurse, plus one more nurse to bring patients back and get them settled in the exam room. So, five nurses at $80,000/year is a total of $400,000/year. You're going to also need a technician for each ancillary diagnostic service that's available in the office itself. For our purposes, let's say they have only X-rays. I'm going to make some educated guesses here and allocate $200,000/year for our support staff and technician. In addition, we've got rent, utilities, equipment, upkeep and supplies. Let's allocate $15,000/month for those. That's another $180,000/year. IMPORTANT NOTE: These numbers may actually vary in "real life." I'm just plugging in numbers to show how the system would work.
Step Two: Determine how may times per year people are going to see the doctor. We are going to exclude Medicare and Medicaid, as well as well as OG-GYNs and pediatricians. At our rate of 36 patients per doctor per day, we come up with 900 visits per week and 46,800 visits per year. Since each person averages roughly 3 trips to their GP every year, that leaves us with 15,600 actual patients.
Step Three: Total yearly expenses and divide by 12.
Doctor Salaries $83,200/month
Nurse Salaries $33,333/month
Staff Salaries $16,667/month
Office Expenses $15,000/month
----------------------------------------------
Total $148,200/month
Step Four: Divide monthly expenses by the number of patients.
$148,200/15,600 = $9.50/month
Step Five: Enjoy!
There are a couple of additions that need to be made. I would do an age adjustment based on the average number of trips for each group. For example, if a 53-year-old person averaged 6 trips per year versus the average of 3 trips, then that would be 100% over the average and that person's monthly rate would rise 100%, from $9.50 to $19.00. Conversely, if a 30-year-old averages 1 visit per year, then their rate would drop accordingly. In this case, it would go down by 66.67% to $3.17.
Another question is that of specialists. Simply put, each specialist, just like our GP's office, would have their own office rate based on their expenses and number of patients. Then, whenever you were referred to one of them, you would simply pay their office rate each month you saw them. so, for example, if you needed to see you gastroenterologist and his office rate was $14.00, that's what you would pay. You wouldn't pay that again unless you needed to see them the next month, at which point you'd pay $14.00 again.
What about hospitals? Here, we have a couple of options. Hospitals could adopt the same model and you could effectively have "hospital insurance." This would also bring expenses down as the market would be opened up to true competition. We could also throw insurance companies a bone here and allow them to sell catastrophic coverage that would cover hospital visits.
What about Medicare? What about Medicaid? Prescription drug prices? All great questions, and they all need thoughtful analysis and serious proposals. Since I solved my part, I'm willing to let someone else pick up the ball and run with it.
In conclusion, I know my plan has zero chance of being implemented. I know there's flaws. I know some of the numbers are probably wrong. Let's say my math was way off. Let's say everything is five times the cost of my examples. Under that scenario, my monthly insurance would still be under $100. I don't know about you, but I'd take that in a heartbeat. Sure beats the hell out of the $1750/month I'm spending now for my family.
Look, I'm not that smart. I didn't have all the numbers and actuarial tables at my fingertips. Most importantly, this plan took me about five hours to design and write about. Seriously. We can do better. Mr. President, Congress, the ball's in your court.
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