MedCity Influencers

Healthcare reform: No constituent left behind

Here's a prescription for healthcare reform from the executive chairman and founder of a company that helps patients shop for their healthcare.

ACA, Trump, healthcare reform

Over 20 million Americans hold health insurance because of the Affordable Care Act. That includes people who benefited from Medicaid expansion, Health Exchange sign-ups, changes in private insurance that allow young adults to stay on their parent’s health insurance plans and plans that now must cover people with pre-existing health conditions.

And while millions of people gained coverage, participating health plans lost billions of dollars. According to Bloomberg Intelligence, UnitedHealth lost $850 million in due to ACA plans. Aetna, Anthem, and Humana each lost at least $300 million this year on ACA plans.

That’s because the exchanges attract mostly expensive high-health-cost Americans – while the young and healthy opted out. That dichotomy disrupted the risk pool that traditionally works well for other exchanges, such as car and home insurance.

So what’s to be done?

There’s an obvious lack of appetite for a national health care solution. This, despite the fact that there are two socialist-like systems working in the U.S. Employers deduct money from employees’ wages in order to fund mostly uniform, non-discriminatory health coverage to all their employees. Second, the government garners wages throughout each citizen’s working years to fund both Medicare and Medicaid.

Together, those two populations add up to 86 percent of the Americans. According to the last census, 53 percent of people get employment-based insurance. Another 33 percent receive Medicare (15.6 percent) or Medicaid (17.3 percent). That leaves 14 percent of the population (roughly 40 million of us) without a viable, health care solution.

It’s what the ACA tried, and failed, to solve.

We think the most rational, alternative approach is to break that group into two and solve for each.

The smaller part of that group is the unhealthy poor, a population that can’t afford all the care they need. Prior to the ACA, these people often qualified for high-risk insurance pools that instituted lifetime dollar caps. Or, underinsured, they used emergency rooms to get care as needed.

In Britain, the NHS uses an economic evaluation of medical care called the Quality-Adjusted Life Year. This measurement balances the value of a medical intervention based on an individual’s quality and quantity of life expected post-treatment.

This approach recognizes that medical resources come with limits. It also challenges doctors who might do more harm than good for their patients with costly, ineffective surgeries and procedures near end-of-life. These are not easy conversations to have as a society. Ultimately, though, figuring out this delicate calculus is more humane than simply not funding further care.

Using some variation of the NHS approach potentially saves billions of dollars, which can fund adequate coverage for the unhealthy and under-insured populations.

The larger part of that 14 percent is what we today refer to as the young and uninsured. For the most part, this group is healthy, but they refuse to pay the exorbitant premiums for ACA plans. The challenge: getting them to pay into the system.

While the ACA implemented fines to dissuade people from skipping out on coverage, the $695 penalty was a lot easier to swallow than the $4,000+ in premium costs for single coverage (family coverage exceeds $12,000). Alternatively, and more actuarially sound, insurers could reward or penalize people based on their risk profiles: If you’re under 50-years-old, you pay less. If you smoke, you pay more. If you drink alcohol, you pay more. If you exercise, you pay less.

That way, all can choose to get the coverage (or not) that’s economically rational for their health profile. Sort of like auto and home insurance…. which works for all involved.

In America, we value both freedom and equality. But as historian Will Durant pointed out, the two are sworn enemies. Freedom is often sacrificed to obtain equality. With a new administration that favors freedom and liberty, a health care policy that fosters enterprise and competition will likely emerge.

Of course, that needs to be balanced by societal compassion for the unhealthy poor, who can’t afford the coverage they need. That group – not covered by employers, Medicare or Medicaid – is fairly small. We think the rational approach here is to re-jigger the system to free health care dollars so that Americans who need the care most can be properly covered.

And, leave the rest of us to freely make our bed.

Photo: Ann Cutting, Getty Images

Mitch Rothschild

Mitch launched Vitals in 2008 after personally experiencing the complexity of finding a qualified physician for his knee surgery. For its first seven years, Mitch served as CEO, growing Vitals.com to over 10 million monthly visitors and a 65 percent compounded annual revenue growth rate. He now serves as Chairman of the company.

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