In the cover story for the September issue of The Atlantic,  the author, David Goldhill, makes a very compelling case for a new kind of healthcare in this country that he calls “consumer centric”.

David makes the point that we are using insurance for the wrong things in this country by mostly using it for “regular” and “predictable” health expenses rather than those that are truly catastrophic or unseen. While the viewpoint is not new, David does take it to its logical conclusion with a plan based on it. The last page of his article summarizes his proposal:

• A  low-cost, true catastrophic (> $50k deductible) insurance that everybody needs to buy. This comes with no medical underwriting and a national shared risk pool. This policy should cost about $200/month for a family of 4 as per today’s premiums.
• A new type of HSA account which everyone is required to contribute to fund for under-50k expenses. People can take loans from this account (if bigger expenses happen earlier in life) and they can also withdraw from this account for non-medical purposes (after a certain minimum indexed to age is met).
• Govt contributes to this new HSA for lower-income Americans. Medicare is replaced by this new type of govt-assisted HSA

David believes that this will force people to save for health insurance while at the same time letting them use that money for other things if they use it efficiently. Such an approach will lead to:

• Removal of obfuscated prices for health care as people will demand to know prices when they are paying for it themselves
• Providers will spend dramatically less time on paperwork as very little of expenses will pass thru insurance
• Patients will see “integrated” pricing for the whole service (like they see today for elective surgery like LASIK) rather than multiple bills from each provider that was part of the service leading to better efficiencies at the backend.
• Technological innovation— which often takes the form of slightly improved treatments for much higher prices—would begin to concern itself with value, not just quality. Many innovations might drive prices down, not up.

I think this is an excellent proposal however I will add two more things to it:

• We  also need to deregulate insurance sector allowing carriers to operate beyond state boundaries and letting hospitals and providers form tighter, efficient groups
• We need to limit legal liability and at the same time protect consumers against unscrupulous providers perhaps by giving FDA or similar authority some kind of jurisdiction over providers for safety of procedures.

There is only one problem: the implementation of such a process requires tremendous political leadership as all of the health-care interest groups—hospitals, insurance companies, professional groups, pharmaceuticals, device manufacturers, even advocates for the poor—have a major stake in the current system.

Unless, we as American public, wake up and realize who much are we paying for our health care (an average of $1.8M per person over our lifetime) and how little say we have in how it is spent, such a proposal does not even stand a chance.

They say, a nation gets the government it deserves. I think its true for health systems as well.

It is time we rise above our narrow interests and do what is Right.