In a decent society, citizens take care of one another, at least to the extent of ensuring that basic needs are met regardless of bad luck. We need a system to supply medical care to all who need it at an affordable price.
Moreover, our economy exists in a competitive world.
So long as multi-national corporations are required to pay for each American employee's medical costs, while in other countries medical care is paid for out of taxes, companies will have an enormous, sometimes irresistible, incentive to shift jobs abroad.
So long as American medical costs are double those in other countries, American producers -- employees and employers alike -- are at an enormous cost disadvantage. The American cost disadvantage stems from basic features of our private system that do not exist elsewhere and would be eliminated with almost any version of a national healthcare or health insurance program: (1) the enormous waste of private insurance, in which legions of insurance company employees seek ways to deny coverage while equally large legions of medical employees attempt to find ways to get paid, (2) the incentives for private insurers to deny care to those who need it the most, and the corresponding incentives for potential patients to conceal their conditions or avoid care to avoid discrimination, (3) the perversity of a system in which the most vulnerable are unable to pay for relatively cheap basic care but will not be turned away for expensive emergencies, (4) the absence of any national record keeping that would allow identifying particularly effective or ineffective treatments or particularly low or high cost areas and the incentives of private insurers to avoid covering relatively cheap early-stage care in the hope that expensive late-stage care will be someone else's problem.
Both justice and economic efficiency demand a national system of health care insurance or health care, paid for and open to all.
See also the public health proposals listed under "Health, Safety and the Environment"
The Medicare/VA For All Act.
In the richest country in the world, medical care should be a basic right for all. Moreover, employees and individual entrepreneurs should be free to move from job to job without worrying about losing medical coverage for pre-existing conditions. Business and industry should be able to compete with foreign-based production on a fair basis -- without having to pay for medical expenses that in other leading capitalist countries are not business expenses.
Building on two highly successful systems already in place, this Act would allow every American to benefit from national health insurance through Medicare, or a national health service through the VA. For adults, it would be entirely permissive -- so that if the private insurance or medical care sector can compete by providing better services, it will be free to do so. However, to prevent free riding that would undermine the system for all of us, every citizen must have some form of medical coverage.
Medicare and the VA are far cheaper and more efficient than the existing private sector insurance plans. So this plan should immediately reduce the proportion of GNP being spent on medical care. Moreover, a universal system should automatically reduce some of the expensive and inappropriate use of our emergency rooms for primary care. Once a national system is in place, further measures will be needed to restrain future growth of costs -- beginning with incentives to increase the use (and compensation) of primary care physicians.
Every American citizen or permanent resident below the age of 18 shall be enrolled in Medicare. His or her parent or legal guardian shall be billed the same fees as a senior citizen Medicare recipient who has enrolled in the cheapest available Medicare coverage.
Every American citizen or permanent resident between the age of 18 and 64 (or the then current age of regular Medicare eligibility) shall be offered the opportunity to enroll in Medicare or the Veteran's Administration medical care system. Each individual may choose either system but not both. Fees shall be the same as for regular (senior citizen) Medicare recipients or veterans, respectively.
No person shall be required to enroll in either program and no enrollee shall be required to use the program for particular health care. However, to ensure that medical care is available when needed and paid for in a responsible fashion, every American citizen or permanent resident between the age of 18 and 64 (or the then current age of regular Medicare eligibility) must be enrolled in Medicare, Medicaid, the VA system or a private medical insurance plan or medical care system providing similar coverage.
In any year in which the unemployment rate is above 5%, funding for this Medicare-For-All/VA program shall be from general revenues or deficit spending.
In any year in which the unemployment rate is below 5%, one half of the proceeds of the Estate Tax shall be directed to this Medicare-For-All/VA program. Any additional funding needed shall come 50% from an income tax surcharge on the top 1% of all income tax payers and 25% from an increase in the Medicare tax and 25% from the general budget of the Pentagon.
The Health Care Improvement Information Act.
Comparative studies have shown that more expensive medical care is rarely synonymous with more effective medical care. Unfortunately, the private market as current structured provides strong incentives for more care, but only weak incentives for better care. Consumers have only limited ability to influence the care they receive, since the primary drivers are medical education, professional self-government, and fee-for-service pay, private insurers, patent monopolies creating monopoly rents and for-profit hospitals driven by markets to expand utilization.
However, consumers and well-intentioned professionals could have more influence with more information and sometimes for-profit actors will find lower costs profitable. Accordingly, we need an better system for collecting, analyzing and disseminating information. In the event the we decide to re-professionalize medical care, fund research by means other than patents or restructure the medical insurance industry with better incentives, the improved information will be even more valuable.
The NIH shall create an agency to research and publicize the most cost effective ways of improving health care outcomes. It shall create reporting protocols to collect all necessary and useful data from all medical care providers and insurers, including but not limited to Medicare and the Veterans Administration and any hospital, insurer or medical provider receiving Federal funds. These shall include, but not be limited to, protocols for investigation of and reporting of all iatrogenic incidents and all insurer denials of care.
The NIH shall issue an annual report stating the percentage of each provider and insurer's net income that is devoted to processing or contesting payments, to administrative overhead, to executive (non-medical) pay, and to profits. The report shall also identify the most and least effective health care providers, both in absolute and cost-adjusted terms.
The NIH shall create and disseminate information about medical and financial best practices on an ongoing basis.
Every medical insurance provider shall be required to provide full and accurate information to the NIH and to consumers at the time of sale, comparing the services it provides and the fees it charges to Medicare and explaining the differences. Any consumer, or group of consumers, injured by false or misleading information may bring an action for damages.
The NIH shall examine the medical education system and propose such changes as are desirable to optimize the number and fields of primary care doctors and specialists produced.
Honest Medical Billing Act.
Current medical billing is extraordinarily difficult to understand and often deceptive, leading to widespread market failure. Billing rates bear no relation to actual charges, while consumers with the least bargaining power are often required to pay more than those with insurance.
The medical industry's standard practice of charging the highest rates to those least able to afford them is discriminatory and unfair, resembling the practices of nineteenth century railroads rather than honest market pricing.
Patients should be entitled to the same rates regardless of their financial status.
Moreover, ordinary common law principles apply to medical contracts and courts should enforce them -- if doctors choose to charge in quasi-contract, they should be held to the principles of quasi-contract, not allowed to simply make up any number they like. If doctors believe that insurance companies have misstated the reasonable and customary charge, they should be allowed to contest such determinations directly with the insurance company; the insured patient has no interest and should be excused from this dispute.
Finally, insurance companies should be consistent in their charges; they should not be permitted to pay a provider one amount and then calculate the patient's co-pay using a different number altogether.
I. Standard Medical Bills and Insurance Forms
The FDA is hereby directed to create a standard medical insurance reimbursement form. All medical insurance carriers shall accept this form on paper and electronically. On a patient's request, any medical service provider shall submit the standard form to any insurance carrier without regard to whether or not the service provider has a contract with such insurer.
The insurance form, and each medical bill sent to any patient, shall clearly state the date of service, the service performed including the standard medical code, and the fee.
II. "Most Favored Nation" Fair Pricing Clause
No medical provider shall bill any uninsured patient any fee higher than the lowest fee that such provider has contractually agreed to accept, or ordinarily accepts, from
any public or private insurer,
self-insured employer,
Blue Cross plan or
Medicare,
unless the bill clearly states in bold letters
(1) that the fee is higher than the fee charged to insured patients and
(2) the dollar amount of the lowest fee charged to insured patients, and
(3) the difference between the fee charged and the lowest fee charged to insured patients.
Any bill issued in violation of this provision shall be unenforceable and the patient shall not be liable for any charge for the billed service.
Any patient who is billed in violation of this provision and pays the amount billed or any part of it may sue for a refund plus a penalty of 50% or reasonable attorney's fees. The statute of limitations shall be the statute of limitations for contract actions, commencing at the time of payment of the bill.
III. Quasi-Contract Suits for Fair Value Only
In any lawsuit by a medical service provider or assignee for payment for medical services rendered, medical service charges shall be deemed charges in quasi-contract for fair value of services rendered. Provided however, that this provision shall not apply if the medical service provider proves that the patient contracted to pay a higher amount after being fully informed, in advance of the service, of the exact charge that would be billed and the difference, if any, between that charge and the charge that would be accepted as "reasonable and customary" for the service by the largest local insurer or an insurer of the patient's choice.
The burden of proof to prove the fair value of services rendered shall be on the service provider.
In the ordinary course, fair value shall be the lower of the reasonable and customary charge for such services or the lowest fee such provider accepts for such services from non-charity cases.
In exceptional cases, however, the court may depart from these standards for good cause shown.
Insurance company standards for "reasonable and customary" shall be admissible as expert witness opinion evidence of "reasonable and customary" charges.
The amount billed in the contested instance is not evidence of the fair value of services rendered, provided however that in no event shall a court award the service provider more than the amount billed.
Any patient who is billed more than the legally enforceable amount for medical services and pays such bill may sue for a refund plus a penalty of 50% or reasonable attorney's fees. The statute of limitations shall be the statute of limitations for contract actions, commencing at the time of payment of the bill.
IV. Medical Provider's Right & Obligation to Dispute Insurance Company Determinations
If a medical service provider bills an insured patient for medical services and the insured patient (or the patient's insurance company) pays the "reasonable and customary" charge as determined by the patient's insurance company, plus any applicable CO-pay or deductible, the provider shall have no further remedy or claim against such patient. However, the medical service provider shall be fully subrogated to such patient's claim against the insurance company for breach of contract due to incorrect determination of "reasonable and customary" and may proceed against the insurance company in the patient's shoes to recover under the insurance contract and for any related damages.
Any medical service provider or association of such providers may commence a declaratory action against any insurance company or companies to correct determinations of "reasonable and customary" fees. Such actions may be commenced in advance of, during, or after any actual dispute over an actual submitted bill.
V. Honesty in Insurance Co-pays
Any insurance contract providing for a CO-pay amount calculated as a percentage of the service charge shall apply the percentage to the "allowable" or "reasonable and customary" charge, whichever is lower. In no event shall an insurance company calculate any charge for a deductible, CO-pay, or patient's responsibility as a percentage of a billed amount the insurance company would not pay.
The Dean Baker Drug Research Improvement and Monopoly Profits Reduction Act.
Patent monopolies are an expensive and inefficient way to reward past drug research or fund new research. They provide funds to researchers based on the sales of prior research rather than the promise of future research, reward expensive treatments for the affluent rather than necessary or useful treatments for all, and create powerful incentives for manufacturers to promote overuse of existing patented drugs in order to capture monopoly profits. A system of peer reviewed research and prizes would generate better results for far less cost, while still creating sufficient rewards for the occasional maverick to gather private funding.
Patent monopoly protection for pharmaceuticals is hereby reduced to five years, commencing from the first application for a pharmaceutical or any closely related substance.
The CBO shall calculate the expected savings for Medicare due to the reduced prices as drugs come off patent sooner. This amount shall be shifted from Medicare's budget to NIH.
The CBO shall calculate the expected savings for Americans not using Medicare due to the reduced prices as drugs come off patent sooner. This amount shall be appropriated to NIH and funded with general tax revenues, unless the Congress shall vote to fund it with a tax on existing pharmaceuticals in the amount of the saved monopoly profits.
NIH shall fund primary research and research and development to create marketable pharmaceuticals by means of competitive, peer reviewed grants. University and for-profit researchers shall be eligible to apply for grants.
NIH shall fund a prize system, granting a prize in the amount of $10,000 for every life saved and proportionally lesser amounts for nonfatal diseases or injuries cured or ameliorated by new pharmaceuticals, taking into account side-effects and the degree of improvements over previously existing treatments.
Prizes shall be based on reported results during the patent period and paid one year after the expiration of the patent period.
Should additional benefits or detriments be discovered after the prize payment, payments may be retroactively adjusted by the agency or on application of the prize recipient or any affected consumer.
Prize determinations shall be based as much as possible on objective statistical determinations of medical utility, with necessary judgments of relative utility or success made by a peer reviewed panel of experts and public representatives with appropriate safeguards against conflict of interest.