Sunday, January 5, 2014

Why The HCAA?

IMHO, the freedom movement needs to create an organization that has a single focus on creating a savings based mechanism for funding health care.

My opinion is based on direct observation of the political debate.

In the 1980s and 1990s it was clear that insurance had destroyed the pricing mechanism in health care and had created systemic faults in the financial system.

There was a great deal of academic interest in creating a savings based health care program. There numerous academic treatises about the advantages of savings based health care, but there were none of the groups (besides myself) delved into the question of how to make savings based health care a reality.

Big insurance companies approached savings based health care as follows: They asked: How can we add a savings component to insurance in a way that would increase profits?

Big insurance created plans that added a Medical Savings Account to high deductible insurance.

The first plans were not popular as people realized that the high deductibles dramatically increased cost of people with chronic conditions and left people more exposed.

The Bush Administration wanted to pass a prescription drug bill and massive expansion of Medicare. To appease Libertarians, they tossed a tax exemption for "Health Savings Accounts."

A tax exemption only helps people who have a high tax bill.

The HSA/HDHC combination wreaks havoc on the health of the working poor. The working poor get no benefit from the tax exemption. They are unable to save money. The high deduction reduces access to care and reduces use of preventative care.

Back in the 1980s, I created a business model called "The Medical Savings and Loan."

The model starts by giving clients a "Medical Savings Account." I supplement the accounts with a loan reserve and grant program.

The program starts with the mantra: Those who can self-fund their care should. We give each client a Medical Savings Account, a share in a loan reserve and access to a Health Care Advocate. The advocates have a data driven program that simulates expected future health care expenses to help clients develop a savings plan. The advocates will help clients find the right doctor and help negotiate health expense.

The program sets aside a huge amount of money for people who cannot afford their care. The amount of money set aside is determined by an actuarial analysis of medical expenses.

Clients have an account containing their money. They have access to a huge loan reserve from which they can make interest free loans. Most importantly, they have access to a professional negotiator who is familiar with the local health care system.

This gives the people who can self fund their care the resources to self fund their care. This takes care of about 95% of the public.

The program has a huge grant pool to help people who can't afford their care. The program gives grants to these people.

This program is different from the HSA/HDHC program because it makes the savings account the focus of care and not the insurance policy.

I tried developing this program in the 1990s. I contacted all of the think tanks I could find and there was absolutely no interest.

I used to have access to some health care data. All of the simulations I ran on real world data indicated that the Medical Savings and Loan does a more equitable job of distributing health care than standard insurance, the HSA/HDHC or socialized medicine models.

For thirty years I've been sitting here with a program that would realize the dreams of Dr. Ben Carson and numerous other free market thinkers.

Bringing this program to fruition is just a simple matter of a small group of dedicated patriots getting together to form an organization called "The Health Care Advocates Association."

The HCAA would then stand up and say: "Hey world. We have a savings based alternative to insurance. We have a mathematical model that suggests this would do a better job than the Health Exchanges, Insurance or Socialism.

Here is the real kicker. The Medical Savings and Loan creates a data driven system that can compare the results of different approaches to financing health care.

It would be possible to create an experiment in which 10,000 or so people engage in the Medical Savings and Loan. We could then compare their health experience with ten thousand people stuck in traditional insurance or who are using the HSA/HDHC model.

My simulations indicate that this model provides better care for the working class and small business owners. The program gives people tools and incentives for negotiating the best price for care; which should improve the quality of care and reduce prices.

All that needs to happen is for a group of libertarian leaning thinkers who want to save the American Experiment in Self Rule to get together to talk about free market approaches to health care reform.

What's funny is that this dream can never happen because I live in the most conservative state in the nation. By living in the most conservative area West of Tehran, I've learned the dreaded truth about the conservative movement. Conservatives only use free market rhetoric. The aim of the Conservative Movement is to create massive social institutions to create a class society that Conservatives love.

Anyway, for the last six years I've been trying to find people with enough interest in defending freedom to attend a presentation. The presentation induces the mathematical model I used, then solicits people to join the HCAA.

I don't want to put the presentation online because I realized that, unless we get an organization that is dedicated to bringing free market health care to fruition, the presentation will be nothing more than base agitation and that big insurance will simply use the base agitation to advance bad implementations of the health savings concept.

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