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Cincinnati Enquirer Campaign Question

HealthCare  25 Mar 2010

Executive summary                                                         Thomas F. McMasters     Candidate U.S. House of Representatives

The wide adoption of health insurance has driven the inflationary pressures on medical services since the 1970’s. Traditional health insurance is inflationary because the costs to consumers are mostly masked.  This law brings more people into this process which will result in more inflation with no benefit to any medical consumer.  This law shoves more consumer money into the healthcare system.  This solves the underpaid doctor problem but it will not prevent one family from entering medical bankruptcy court. Trying to cover the last 15% of the population with this law will explode the inflationary effect.  This will happen because we depend on just one method to pay for healthcare.  I propose we as a nation adapt a three tier approach to paying for our health services: A new health insurance where the consumer knows costs Traditional health insurance Socialized medicine

My objections to President Obama's promotion of health insurance differ significantly from the objections I've heard from most other Republicans.  I believe, the large scale adoption of traditional health insurance is the primary reason for the out of control medical inflation we endure in this country.  In any cost curve the last 15% is the most expensive.  Though good intentioned the President's plan -- because it relies on the expansion of traditional health insurance will significantly increase the inflationary pressure for medical services causing us to spend an even greater percentage of our GDP on healthcare costs.  

I believe most doctors are working longer hours than other equally trained professionals.  Also, there is nothing of significance in this bill to increase the number of doctors in the system.  Add 10% more people into the system and either you have to convince the doctors to work longer hours or you have to push 33 million people out of the system.  The net result from this bill will be a temporary increase in people being covered but eventually the system will settle back down to covering exactly the same percentage of people covered today.  This is because the number of people covered today is the natural level of coverage our system can support given the number of doctors and the dynamics of our medical demands.  But even though we will end up going back down to the same number of people in the system the increase in the amount of money spent will remain.  The net result of this plan will be to permanently raise the percent of our GDP going to support the medical industry but only temporarily raise the number of people covered.  

 The United States and Canada seem to have diametrically opposed systems.  However both systems are stuck at covering about 85% of the needs of the population.  This 85% seems to be the natural level of coverage for both countries.  I believe this relationship occurs because both countries rely too heavily on one means of providing health coverage.  In the United States we rely on traditional health insurance.  In Canada they rely on government managed socialized medicine.  To me this is like two neighboring apple orchards.  One of them demands all their apple pickers use stilts so they can more easily reach the top of the tree.  This makes it difficult for these pickers to reach the lower apples. The boss of the neighboring orchard won't pay for stilts or ladders so his workers waste a lot of effort getting the higher apples.  In both cases using just one method makes getting all the apples more difficult.  Using this analogy I come to the conclusion this country needs to promote at least two different avenues for paying for health services.  In fact, the system I currently deem the best for the American public has a three tier approach.  Though my system does contain some traditional health insurance and some socialized medicine  I haven't even defined for you the tier I think should dominate.  I do not like the traditional health insurance or socialized medicine as a candidate for dominating the health payment system.  Both these systems are inflationary because the cost of the services are largely masked from the consumer.  In our system the behind the scene payment by our employer masks the true amount we pay.  The ever increasing premiums our companies pay is generally not thought about as potential wages.  In Canada, having "free" healthcare causes more and more people to use the system so their cost is manifested in longer waits for service. Therefore, we need a third type of payment system.  We need a system where the consumer considers costs when demanding health services.  I've conceived such a system which I call the "Self Pay with Guaranty".

When I think that the average employer based health insurance plan costs $1300 a month I see the potential for $15,000 a year in extra take home pay. The premise of this third tier of this three tiered approach is to let people pay the doctor bills  themselves but give them the opportunity to buy an insurance policy with two major features.  The first feature is the policy would be available to make the payments for the person who suffers a significant injury or disease making them unable to pay their medical bills.  The second feature is  they get insurance rates when they go in for medical procedures.

Let me explain a little more about the Pay with Guarantee insurance system.  

Last week I got the insurance summary for a doctor visit.  On that summary it shows the the amount the doctor would have charge me if I didn't have insurance -- $302.  $300 divides into $15,000 fifty times.  Even with 5 kids we don't go to the doctor 50 times a year.  But what really gets me is the amount the doctor agreed to take because I had insurance.  He was satisfied with $45. Forty Five goes into fifteen thousand, 333 times!  Let me pay those rates and give me the $15,000 in salary!  The reason always given for the big discrepancy between the rates for the uninsured and the insured is because so many uninsured don't pay their bills so the few people that do get to make up the difference.  Well, if we create this insurance that guarantees the doctor will get paid then those in it will get bills from the doctors at insurance based prices.    

First off let me talk about the scary part of this insurance.  I expect all these types of policies to have a maximum pay out.  In fact, I model these health insurance policies after Life insurance.  That is a person decides how much coverage they feel they need based on their situation and goes out and buys that much coverage.  And just like Life insurance the entire amount of that coverage is "earned" when a qualifying event occurs.  What I'm saying here is when the covered person dies that person is no longer required to pay premiums but the life insurance company is on the hook to pay out the benefit.  On this new kind of health insurance policy the premiums will be structured so the person pays upfront for coverage and if they become too sick to work they do not lose coverage for the illness which caused them to stop working.  In other words if you got sick while insured the health insurance company for this new type of insurance would be required to pay the medical bills due to this sickness until the disease or injury were cured (or you reach the limit you chose when you purchased the policy).  One of the items I envision for these policies is they would have lifetime premiums and the earlier you decided to begin coverage the cheaper the premiums.  So if a twenty year old decided to start coverage they probably could get a $7 million policy for $100 a month.  This rate would be set for life.  If later on more coverage was desired then it could be purchases at the going rate for that age.  Lots more details would have to be worked out.  For instance can a person share this policy with a new spouse or future children?  You can see the first article I wrote on this kind of policy at this link I've actually refined it some in my head but I've not written out all those refinements yet.  For instance it appears this type of policy could be offered for much less than my original estimates.  I think it is reasonable to believe a healthy family of 4 with the parents in their mid 30's could get a $7 million policy for $160 a month.  This would mean they would net an additional $1140 of salary every month. 

Before I switch modes and start talking about the questions I have about the President's new medical mandate let me assure you I did write that socialized medicine should be a component in the overall healthcare system.  I am not scared of socialized medicine for two reasons.  The first is I know and have talked to at least 15 different unrelated Canadians.  My brother in law lives in Canada. I've met vacationing Canadians around my parents home in Buffalo and in Florida. When I was in Afghanistan and at the CAOC I talked with multiple military members.  All of them rate their system as high quality.  I was actually shocked when one of the Air Force Officers told me there is no separate military facilities and he and his family are seen at the same facilities and priority as any other Canadian.  On top of that he highly rated the Canadian system.  In fact, the only people ever to talk bad about their system seems to be Americans that have no knowledge of how it works.   

The primary reason I'm not scared of socialized medicine is as an Air Force officer my family's primary care physicians have all been employed in a socialized medical system.  I hear people say all the time "I don't want socialized medicine".  I guess that's ok for them but from the little exposure I've had getting service in from the private sector I think they're crazy!  Right before I retired I was referred "off base" to see a podiatrist for continuing care of an ongoing problem.  This doctor was really this huckster.  When I walked in they had a sheet for me to sign to "confirm my address" but immediately below was the "record of service".  It looked like to me they were trying to get me to sign a blank sheet verifying the services they provided that day. Before I even got my shoes off the office was preparing cortisone shots.  The Doctor looked at the custom made inserts the base provided and declared them inferior in her attempt to get my to buy her $400 inserts.  She ordered up $200 "night splints".  On my second visit I asked for copies of the medical treatments so I could have them added to my military records.  Her office said "we don't usually do that" but if I really wanted them it would be $1.00 a page and could take 6 to 8 weeks for them.  Why anyone would choose that system over the great care I got at the base is beyond me.  Also, when I retired my family initially got assigned a primary care doctor not associated with the base.  It was during the swine flu season when my son got sick and we wanted to take him to see the doctor.  Even though we had been assigned this Dr for a couple months we were told  it would be at least two weeks to get an appointment because my son had never been seen by this doctor.  They told us after he was in the system following appointments would be a lot more timely.  Of course, after two weeks he was much better but we decided to keep the appointment in order to get him in the doctor's system.  This doctor was brilliant.  But the waiting room experience was horrible.  There were about 70 people crammed into a room about the size of a normal living room.  Many of these people seemed to be in a full blown state of swine flu.  My almost fully healthy son was exposed to this atmosphere for almost 2 hours.  Why you would prefer your healthcare system instead of the government system my families uses I'll never know, but it was a great relief when we got re-assigned back into the socialized medical system.  As happy as I am with being fortunate enough to get socialized medicine, this system should not be embraced and implemented as the only method to provide medical services.  In fact, I don't think such a service can be extend to more than 30% of the population because it also is an inflationary system.  Also, it takes a special kind of attitude to  work in this type of system or to agree to be served in this kind of system.  The doctors and nurses drawn to this type of system fall into two categories: 1. They are super dedicated to public service or 2. They are the weakest providers.  I've been pretty lucky and the doctors we've been assigned have fallen into the first category.  The people that choose to be served by this system have to be willing to forgo the opportunity to sue in the case of malpractice.  The other reason I believe it would be good for the two insurance systems to provide the medical services to at least 60% of the population is because competitive medicine is what drives innovation.

Questions and thoughts about the debate on Healthcare reform.  Though I have secured a spot on the ballot in the Republican primary I really am just an average constituent that wants a debate with more depth and details.  I've been annoyed by the discussion leading up to the passage of this healthcare law.  First, I've had some relative points that no one has addressed and second both the Republicans and Democrats keep bring up lousy points just because they can fire up a crowd talking about them.

First here are my thoughts that I wish someone would address.

Health insurance is inflationary.  See the first couple paragraphs of this main article then come back down here and tell me what's wrong with my logic.

Traditional Health Insurance is by its nature inflationary. There is no incentive for the individual to negotiate costs with the doctors. Also, since insurance companies make their 4% profit based on how much money they pay out there is no incentive for them to try and restrict. For example if I go in and see my foot doctor and she sees me and sends me home the cost of the visit is just $50. This means the insurance company only gets $2 profit. But if she sells me night splints for $200 and gives me steroid shots for $100 then they get $12 more all for the same visit. Also, we already know how much it costs for policies with no restriction on pre-existing conditions because most employer based polices don’t have enrollment restrictions. These policies cost on average $1300 per month. Every person with individual policies should expect their premiums to go up to this level.   What's wrong with my logic?

Traditional Health Insurance doesn't protect most people from medical bankruptcy.  For most people a serious illness will still have enough deductibles and co-pays to force a family into bankruptcy.  The only difference between the insured and the uninsured is the insured take three years and suffer with the extra stress of losing their house  before they go into bankruptcy court with $40,000 of debt to be restructured.  The uninsured go in immediately after recovery with a $400,000 debt.   In the long run, from the family's point of view, what's the difference?

The President readily admits this law forces young people that don't need this type of insurance to pay the insurance bills for older sicker people.  This law does nothing to keep those sick people out of bankruptcy court.  This law solves the doctor not getting paid problem.  Was that the real objective of the legislation?

Here are a couple examples of the party talking points that annoy me because they are so obviously wrong but politicians are able to get people all riled up when they say them.

Republican - "The government has never forced people to buy health insurance.  This mandate is against the constitution!"  

This is not true.  All wage earners pay 1.3% of their wage for health insurance and their company contributes another 1.3%.  As a result a person making $40,000 a year is forced by the government to pay about $1000 a year for health insurance.  It's just this health insurance is called Medicare and the people paying for it don't actually get to use it.  Now Medicare has been forced on people since 1966.  Do Republicans really believe it is constitutional to force people to buy other people's health insurance but it is unconstitutional to force them to buy it for themselves?  Or are they going to go into court and demand grandma get thrown out of the hospital?

Democrat:  The President would bring up all these personal examples of people hurt by the current system.  

One lady had her premium go up from $500 to $700 a month.  You already know I believe this is just the beginning.  Her real market price for this policy once it has to price in the cost of covering pre-existing condition will be at least $1300 a month.  Please explain to me how this bill will prevent this?  

One lady told of getting sick and she had to make a choice -- either pay her house payment or pay her health insurance bill.  She chose paying her house payment. Now she has huge medical bills to pay.  Now that the government has chosen to take away her choice when she gets sick she will have to stop making her house payments.  How does being homeless help her?

I understand why some people get riled up by this rhetoric.  What is annoying is the politician that keep saying them.  There can only be two reasons they keep saying them: 1. They don't understand the subject themselves or 2. They are willing to keep saying irrelevant points just because they are too lazy to try and educate those people that don't have time to fully examine the arguments.  In either case their behavior is unacceptable.  I on the other hand I really want the professional politicians to tell us straight up what is going on.

Tom McMasters

Republican Candidate for the 8th Congressional District

 Why does my insurance company approve a charge of $80 a month to rent the little piece of plastic you see in the picture below.  I'm told my only recourse to the non-answer is to "lie on the deck and flop like a fish".  I thought maybe if I got elected to congress I'd get a better response.  

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