Healthcare...

Another third rail? Yah I like them. Ride the lightning baby!

Healthcare will be an issue going forward. The D’s succeeded in the shutdown of bringing the issue to light. Costs are too high. It is obvious. Healthcare is a need, not a want. Savings accounts do not excite the populace. They are not the answer people are looking for. Either the R’s have a plan or they do not, and 2026 is going to be a knock it down and drag it out fight.

I am not sure the full answer on this one. There are a lot of people who spend their entire lifetime studying the complexity of healthcare. I have enough knowledge to be slightly dangerous, but not enough to know it all. Sometimes an outsider has a different perspective. Nothing I see is new, but maybe it is the combination and timing which is new.

We have marched toward a consolidated healthcare model over the last 20 years. I wrote about it in a post yesterday. The post started a bunch of conversations.

I thought more about the idea of a statewide healthcare system which would also include insurance. The dynamic of a system instead of insurance being the model. I know there is “single payer” to keep profits out of the system, but what if there were multiple models? Could we do a public and private model? Could we focus on the care not the insurance being the product? It is about getting care where you want, when you want, and how you want. That is the goal. The other goal is to make it as efficient, low-cost as possible to meet the mission of being able to give basic and extended care to patients.

The American system is about the ability to buy insurance and have “choice.” Other systems do not have “choice” per se. You get the one provider of care, the State. In America, access is dictated by your ability to afford insurance (or used to be), and in a single payer system, it is by your ability to “leverage” contacts since supply is constrained.

I am not sure if a single payer system is the best or whether competition is better. The reality is the cost of the American system is higher than it should be and is not stopping even with consolidation. Healthcare goes up as the care gets more complex. There are economists who study these dynamics, and I am not going to pretend to be a master of them.

What I am thinking about is an inversion of the current business model, shifting the care from insurance to the system. In other words, the system is the product not the insurance, and the insurance is a passthrough, a way to organize and that’s it. I am also thinking about how a statewide system could be built. What if you combined all the University of California systems into one single healthcare program, making it the UC version of Kaiser? What if that system was supported not as a government-run system, but nonprofit, but without the profit motive? With the consolidation of healthcare, we are getting closer to the ability to create “statewide” systems.

I know, people reading this proposition are saying, “well, now we have a situation where the State is unfairly subsidizing its own benefit.” Sure, but if the private market is more efficient, then that should be an easy win. To that end, what if we had multiple care models? What if say, there was the Private Model, which is not UC based? What if the UC model drove the price for reimbursement or vice versa? What if there was a way to incentivize the lowering of costs or slowing the increases, thus making healthcare more affordable, while also making sure competition was evident. Competition will be the crucial element for the R’s. The D’s want single payer or something similar. Perhaps there is a way to have both? I know, dreamland. Also, if you make it a state-run model, then the state can decide what care to offer. If the people want to offer care to certain groups or certain levels above a “baseline,” then so be it.

Ok, I am in crazy town, I know. Let’s keep going.

Elective care and other private systems can also be available to supplement the care above.

How would it all be paid for? Well, we have huge transfers from Medicare and Medicaid right now which are a part of a model (40% of the current healthcare market). Private insurance is also another area where the “state” model can compete. If the “state” can drive down prices, that could be good for all in the private model. Turn the insurance into a pass through from a care model.

Perhaps one of the biggest opposers of the system will be labor with their gold plated healthcare, a differentiator for the benefits of labor union participation. Choice will be a major hit on the model, but choice is diminishing fast now, and if you want choice, there is competition out there. Perhaps supplemental and other private insurance is available in this dream world.

As I see it, someone has to make a move on healthcare. It is going to grow in cost. We need to “bend the cost curve.” Insurance has not gotten us there. Scale drives efficiencies. States are going to want different ways to deliver care, which makes sense. Competition is a key component. Ensuring costs are reduced is a major component of the model. Single payer might not be the only way, and with our current system, is there a way to get there without having to go whole hog or without any insurance either?

I am not sure the answer, but wanted to throw it out there. I think most states have at least one “state adjacent” system (i.e. a University Healthcare System) which can begin the process. For others, maybe there is a way to align the interests. I would love to see a solicitation and bid for the potential here. I would love to see how you can align the assets to solve the problem.

Medicaid, Medicare, and other supplements need to be reined in. They are not solvent long-term. The private market is broken. We all know that. 40 million (10% of our nation) are on private plans which are not affordable. We shrink the ends, Medicare increasingly taking on elderly and Medicaid for those at the lower rungs of healthcare. Between Medicare and Medicaid, almost 40% of the population is already spoken for, split essentially evenly. It is the remaining (40% Medicare/Medicaid plus 10% Affordable Care Act), 50% which has to be solved or served here. I do not think we are that far off, and especially if we can start to implement the broader model.

You have to put it out there to start the conversation. Just like Altadena in March and the initial plan, attack it, and at least we are not attacking one another. We need to advance the conversation, finding a middle ground, and see which Party decides to use the model to get further to the center. The risk is single payer emerges as the best system, which if it is, then let’s be done with the conversation and get on with it. I think there is more creativity than that model, but let’s see what the other side can come up with. Find a better way to keep choice, provide options, et cetera.