Book of Commandments on Health Care Reform

I need to explain to readers my circumstances. I live in Utah. Utah is controlled by the LDS Church. I am not a member of the LDS Church.

Anyway, In 1833, Joseph Smith published a work called "The Book of Commandments which was renamed to "The Doctrine and Covenants." You can find the original plates on the The Institution for Religious Research.

This is the part of the work relevant to the health care debate.

25 Thou knowest my laws, they are given in my scriptures, he that sinneth and repenth not, shall be cast out.

26 If thou lovest me, thou shat serve me and keep all of my commandments; and behold, thou shalt consecrate all thy properties, that which thou hast unto me, wih a covenant and deed which cannot be broken; and they shall be laid before the bishop of my church, and two of the elders, such as he shall appoint and set apart for that purpose.

27 And it shall come to pass, that the bishop of my church, after that he has received the properties of my church, that it can not be taken from the church, he shall appoint every man a steward over his own property, or that which he has received, in as much as is sufficient for himself and family:

28 And the residue shall be kept to administer to him who has not, that every man may receive according as he stands in need:

29 And the residue shall be kept in my storehouse, to administer the poor and needy, as shall be appointed to the elders of the church and the bishop; and for the purpose of purchasing lands, and the building up of the New Jerusalem, which is hereafter to be revealed; that my covenant people may be gathered in one, in the day that I shall come to my temple.

The first sentence emphasizes that these are commandments directly from God. These commandments were intended to be the beating heart of Mormonism.

A person who does not follow God's Commandments is a sinner. God commands that the faithful cast out anyone who challenges the commandments revealed by Joseph Smith.

The Commandment is that people are to give all their property to the church. The church will give back to people as the church sees fit. This new system was called "The United Order of Enoch." Mormon Fundamentalist groups such as the FLDS continue to practice the laws of the United Order. The church owns all the property. The people subsist on what the church doles out.

Joseph Smith's followers rose up after he published the "Book of Commandments." Smith changed the word "all" to "of" in the "Doctrine and Covenants." Members of the mainstream LDS Community take the commandment to mean that they are to buy insurance.

I want to argue for true free market reform as an alternative to insurance. I routinely experience the following. I go to a meetings hosted by the GOP or other Conservative group. I mention that I favor free market reform. An enforcer from the LDS church realizes that free market reforms are against the fundamental teachings of the LDS Church. I get thrown out of the meeting. I have actually been called "a Servant of Satan" simply for considering the free market alternatives to a socialized market.

I would like to point out that most LDS politicians favor the basic structure of PPACA. Senator Harry Reid (a Democratic Senator from Nevada) was the primary architect of PPACA. His plan was based on the plan by Mitt Romney. Governors Mike Leavitt, Gary Herbert, and Jon Huntsman all support variations of PPACA. Most LDS politicians are all openly opposed to free market reforms.

As for the accusation that I am a Servant of Satan for considering free market reform. This argument is based on the dubious claim that Joseph Smith is the Prophet of God. In the same book that Smith proposed socializing our economy, Smith restored the doctrine of polygamy. This self-proclaimed Prophet of God said that God demanded that he sleep with multiple women. There is documentation that Smith sealed himself to at least 49 wives. Some were as young as 14. There are reports that he made advances on many more.

I read the Book of Mormon and the D&C several times. They appear to be written by a con artist.

I prefer the US Constitution to the words of a con man.

The Mormon notion that one should cast out people for questioning their prophet is against the principles of freedom of speech, but the LDS Church controls the state and there is really not much I can do except hope that I can find a group outside of the state of Utah interested in free market care. Quite frankly, I feel things are quite hopeless.

The Package

As mentioned in my last post: The Medicals Savings and Loan is based on a mathematical model of the way that people financed health care before the invention of big insurance.

I created this project because I realized several decades ago that the only way that we could have free market health care reform.

Prior to insurance people financed care through a combination of savings, loans and grants.

The Medical Savings and Loan creates a formal structure around a traditional structure. The formalized structure includes an accounting system and a position called a health care advocate.

Creating an accounting system is not an anti-market activity.

The development of accounting played a vital role in the evolution of our understanding of markets.

Conservatives spit in my face and kick me down for saying that we to create an accounting system.

Creating an accounting system is pro market.

After creating a mathematical model, I created a business model for the Medical Savings and Loan. The basis business model has few dependencies on government beyond what is needed for basic contracts.

BTW, we depend on government for most basic contracts. For example an employment contract might say that employees get paid at the end of the month. The government helps enforce this contract.

The idea that we can completely eliminate government is stupid.

Just like the idea that we should oppose the use of accounting in business is stupid.

What I've contended for these last eight years is that: If a group of people got together, created a mathematical model (aka an accounting system) for free market health care, that group could have a positive impact on the debate.

Specifically, the group would end up demonstrating that insurance is anti-market contrivance of the ruling elite.

Insurance is based on the false assumption that the free market is incapable of delivering health care. Because the free market can't deliver care, we must put all of our health care dollars in huge pools controlled by the ruling elite.

The people who control these pools become billionaires. Notably Warren Buffet made his billions by owning insurance companies and controlling the money in insurance pools.

My presentation on the Medical Savings and Loan shows that insurance transfers trillions of dollars from the working poor  to the upper middle class and ruling elite.

Our health care debate for the last century has been built around the insurance industry. Single payer care is a system with one insurance company owned by the state and made totalitarian.

Insurance requires a great deal of government oversight and regulation.

ObamaCare was based on an idea from a conservative group called The Heritage Foundation. The idea is that we can regulate insurance through a network of state run health exchanges. The plan was first put in place by the self-described "severely conservative" Mitt Romney.

Conservative politicians systematically fall back on the basic structure of the PPACA. The Repeal and Replace Legislation put forward by Trump and the GOP replaced ObamaCare with a slightly less toxic version of ObamaCare.

If Americans wanted to restore free market health care, then we would need a group of people to do something radical. I suggest that we do the following.

We start by creating a mathematical model of free market health care (an accounting system). We should build a business model around this accounting system. We should then run simulations that compare the result of this model to the insurance model.

A group that engaged in this type of discovery would be in a position to create real free market reforms.

The process is quite detailed an involved.

Unfortunately, the very first step in this process is to find people who are willing to talk about free market reform.


Freedom isn't free. To maintain freedom, we need people who are brave enough to sit in a room and talk about numbers.

I've been working on this program for about thirty years. I have yet to meet a conservative brave enough to actually talk about the details of freedom in mathematical terms (by mathematics, I mean Accounting which really is a branch of mathematics).

One way to start the program is to create an open source project. Getting the project going would involve people sitting in a room and talking.

How Did People Fund Health Care Before Group Insurance?

One question people should ask in a health care debate is: How did people fund health care before insurance?

Well, people funded their health care through savings. Often doctors would render service on credit and there were charities for people who needed care beyond their resources.

Wait a second: This thing called "The Medical Savings and Loan" funds care through a combination of savings, a loan reserve and grants.

Something seems very fishy.

Okay, I will finally divulge what I've been up to.

This thing I call "The Medical Savings and Loan" is really just a formalized model of traditional health care.

While working at an insurance company, I asked myself the fundamental question: Does group health insurance do a better job of funding care than traditional methods?

I simply created a mathematical model for traditional health care and insurance based care. The simulations I ran kept showing that traditional care provided greater care for the working poor and small business than insurance.

Insurance benefits the upper middle class and the uber-rich at the cost of the working class.

The big problem with traditional care is that it lacked a good accounting system. The system did not give people adequate information about the amount of money they needed to save. It did a poor job tracking how much people spent on health care and it did a poor job of identifying the people who needed additional help.

We live in the Information Age. What I wanted to do was to create a distributed database so that people could track their care. Realizing that people would have a hard time interfacing with the system, I realized that this new program would create a need for a new position called which I called "A Health Care Advocate."

To streamline the lending process, I created a thing called a Loan Reserve. I also created a streamlined process for administering grants.

With this model in hand, I can prove that a savings based model of health care delivers better care to the working poor and middle class than the insurance model.

I argue that if one enhanced traditional care with health care advocates and a good data reporting system, we could easily create a health care system that would put all other health care systems to shame.

What I've been doing for the last eight years is simply trying to find people brave enough to discuss the mathematics of health care.

The actual system I am discussing isn't really radical. It is just a formalized version of traditional care. I enhance traditional care with an accounting system and a position called "The Health Care Advocate."

My presentation also discusses how one can incrementally transition from the insurance model to a savings based model.

The program can replace ObamaCare without disruption. Quite frankly it is likely to get more resources to the people in need. All I need to do is find people brave enough to discuss the mathematics of health care.

Health Care Liberalization

For the last eight years I've had the goal of attending a meeting about free market health care.

My goal was to find candidates to support.

To my horror, I could not find any conservative candidate or conservative group that was making a strong appeal for real free market reforms.

The conservatives I encountered suffered the illusion that insurance was health care. At best they sought reduced regulations on the insurance industry.

I worked for a state run insurance company writing computer programs to track claims and calculate premiums. I realized that the insurance industry was creating more inequities than it solved. I decided to leave what I considered a morally bankrupt industry.

After leaving insurance, I worked on a little project where I reverse engineered an insurance pool into individual accounts. This simple plan created an account that tracked an individuals income and net savings. It supplemented the account with a loan reserve and grants. It replaced the insurance agents and claims adjusters with a new position called a Health Care Advocate.

The program I created eliminated the inequities that made me leave insurance.

Back to the health care debate.

Unable to find a candidate who was talking about free market health care reform, I decided to host a presentation. This presentation would present the model I used for health care reform. I would then use the model to expose the inequities caused by group insurance.

I put a lot of work into the presentation.


For example, I introduce the concept by creating a business. I chose this path because I want to emphasize that funding health care is a business problem. As it is a business problem we need to think in terms of creating new businesses.

In the presentation, I create a new business. I chose the name "Medical Savings and Loan" to invoke images from the movie "It's a Wonderful Life." In this movie, George Bailey (played by James Stewart) runs a local savings and loan and competes against big finance.

After creating the Medical Savings and Loan, I compare it to the model used for group insurance. I show how group insurance creates inequities and concentrates wealth.

Insurance does something even worse. Insurance takes individual risks. Puts the risks in a huge pool and creates a systemic economic risk.

I highlight this by looking at the collapse of the savings and loan industry. Savings and Loans were insured by a Federal agency called the FSLIC (Federal Savings and Loan Insurance Company).

The Carter Administration sought to stimulate the economy by increasing the interest paid at savings and loans and encouraging savings and loans to take on more risk. Many savings and loans developed absurd portfolios and the FSLIC became untenable.

Reagan tried to address the problem by further deregulation. The federal government program that insurance savings and loans collapsed and wiped out an entire sector of the banking market.

The FSLIC is an example of a Federal insurance program creating systemic risk that wiped out a sector of the economy.

I think the name "Medical Savings and Loan" is adequate for the conversation I wanted to have.

After I talk about the insurance industry. I then talk about using the basic model of the MS&L in social policy.

This is where things get progressive.

The Medical Savings and Loan creates an interesting framework in which one can create income brackets.

The program starts with the statement: "Those who can self-fund their care should."

(A corollary to the statement is those who can't need assistance.)

The program will encourage people to save for their health care.

Lets imagine two people. The first person makes $10,000 a year. We might deem it reasonable that this person saves $1,000 for health care. A second person makes $500,000 a year. This person might save $50,000 or more for care.

(Much, if not all of this money is invested in a loan reserve).

After 10 years, the first person has $10k and the second $500k. These people have a $300,000 health care expense. The first person takes out a loan. I guess the second person could pay in cash.

Repayment of the loan is based on the ability of the person to repay the loan.

The person who made $10k a year sees his income drop to $5k a year. This person can't repay the loan; so we write it off. The second person saw her income drop to $100k after the health problem. This person could pay off the loan.

The program creates a vehicle for means testing medicare. Let's imagine two retires. The first has $100k in assets. The second $10M in assets. They both have $300k of end of life expenses.

The person with $100 can't pay back the whole loan. Maybe the person should payback $50k leaving $50k to heirs.

The person with $10,000,000 in assets could payback $300,000 and still leave heirs with a tidy inheritance.

Note, asking the person with $10,000,000 to pay back a loan for medical services is not a tax. It is the way a free market is supposed to work

NOTE, the formulas created by the Medical Savings and Loan are far more versatile than those used in standard insurance. It is possible to replace the pools used in the current health care system with loans over a period of time.

To recap, the Medical Savings and Loan works as follows. It starts with the statement that those who can self fund their care should. It creates an accounting system that tracks a person's income, net worth and health care expenses. The program creates a loan reserve to assure that people have access to sufficient funds to pay for care at any given time.

The program gives everyone a Health Care Advocate. The advocate will help people find doctors and apply for loans and grants when people need care.

The money in the system flows from individual accounts to the health care provider. People are now paying for their care with their money. They have a knowledgeable advocate to help negotiate bills. This will restore the pricing mechanism in health care and drop prices.

Most people can self fund their care. The program will identify the people who can't self fund care. The loan reserve will write off the loans for people who can't repay their loans (my presentation talks in detail about the grant process).

So, while the Medical Savings and Loan is built around the ideal: "Those who can self fund their care should." It also creates a mechanism that transfers money from the rich and healthy to the poor and sickly.

The program is not about eliminating wealth transfer in health care. What the program does is determine the amount needed to transfer for a good health care system and is more efficient in transferring the money than either insurance or socialism (A reminder: Single Payer Health Care is insurance made totalitarian).

There is a lot more to my health care presentation than this blog post.

The Medical Savings and Loan creates a new mathematical model for funding health care and compares this model to insurance.

The really hard part to convey in my presentation is conveying the versatility of the mew mathematical model. The presentation shows how the model can be implemented as a small business. It ends by showing how basic concepts from the model could be used by policy makers to identify the people who need assistance, how assistance they need and it creates mechanisms for transferring resources to the people who need assistance in an efficient manner.

It is actually an intriguing presentation. I've been hoping for the last several years to find people brave enough to discuss alternatives to the current group insurance market.