A Complex of Funding Efforts

The last two posts combine together to make something really remarkable:

The first posts said that I am no longer pursuing the Medical Savings and Loan as a stand alone business. I now see the program as a way of organizing a nexus of small businesses that help people self-fund their care. The second post said that I've steered away from re-insurance to a system of grants.

These two posts add up to a remarkable change: Instead of having one entity (an insurance company or HMO) dominating one's health care, the MS&L would create a whole network of small businesses and charities working directly with people to accomplish the important task of funding health care.

The separation into different businesses isn't just a nicety, it is a necessity. The separation keeps each segment of the system in its own accounting and legal space.

An employer using the Medical Savings and Loan would pay a monthly premium to the Medical Savings and Loan. Some of this money would be held in a loan reserve with the rest distributed to bank accounts held by the employees. A set portion of the premium would go into the grants program.

The employees would negotiate their health care directly with doctors and would pay for the care from their bank account.

The fact that money comes from an employee's bank account drives the fact that this is self funded care.

When the employee needs a loan, the money for the loan goes from the MS&L into the employee's bank account then to the doctor reinforcing the contract between patient and doctor.

Charitable accounts would likely be held directly by the employer or a non-profit foundation. The payment from a foundation would either go directly to the doctor or into the employee's account. The fact that the money comes from a different legal entity emphasizes that the money is coming from a grant.

Insurance lumps the health care funding into a massive pool. The administration of this pool tends become politicized and corrupt.

The Medical Savings and Loan separates out the components of funding care.

Although it would be possible to create a single monolithic company that handled each of the components of care, separating the program into multiple legal entities emphasizes the different dimensions of funding care.