"What is missing from your proposal is any approach to the real problem in our health system: waste."
The comment shows that I am failing to convey the nature of the Medical Savings and Loan.
The Medical Savings and Loan is not insurance! It is a mechanism for self-funding care. Medical expenses are no longer a claim against an insurance company. There is no third party involved in the transaction. Medical expenses are a direct transaction negotiated between doctor and patient.
The Medical Savings and Loan pretty much eliminates all waste associated with the insurance company.
The challenge from a business perspective is that the MS&L structure pretty much removes all profit centers from the business. Patients now own their risk and negotiate their transactions directly with the doctor. All of the justifications for massive insurance profits vanish. They are gone. The stuff Doctor Jarvis calls waste is no longer there.
The bad part for me is that the MS&L creates "George Bailey" style dramas as the hard work of the owners of the Medical Savings and Loan help enrich the community, but fail to realize their own dreams of world travel.
The Medical Savings and Loan is not completely without employees. The system employs Health Care Advocates. These advocates work for the patient and will assist in negotiations. They do not take a cut of the expense, as insurance does. They charge for their service and must provide value to justify their their salary.
The advocates work with lawyers who are charged and ready to sue doctors and hospitals for any real malpractice that occurs.
The Medical Savings and Loan makes the patient the center piece of the health funding puzzle. (Insurance makes an abstract risk pool the focus of things) The goal of the system is to identify medical expenses and provide financial resources for each person and to optimize the return from those resources.
I tend to speak of optimizing resource instead of reducing waste.
The debate about reducing waste immediately jumps into the question of "which waste"?
Everyone has a different definition of waste. What one person defines as waste may not be considered waste by another.
For example, doctors tend to place patients through batteries of expensive medical tests. With insurance people are happy to take all the tests requested by the doctor without thought about the price. With the Medical Savings and Loan, patients must pay the bill and are more likely to challenge the test.
So lets say a doctor requests a $300 test. The test gives information that the doctor likes to know. A patient using insurance would take the test without question. The patient paying cash would question the doctor and might decide that this test is not worth the $300.
Was this test waste?
What if a patient decide to buy a health care product that the insurance wouldn't have purchased. Is that purchase waste?
When people have control of their own resources, they will probably buy more alternative medicine. A pointy nosed bureaucrat is likely to see all "alternative medicine" as waste.
I am inclined to say that people spending money they earned as they see fit is not waste.
In social policy, the question of reducing waste can become scary.
In social policy one wants to spend money for the social good. Old people are no longer productive. Is spending money on the elderly waste?
Doctor Jarvis responded to a post about charitable care. There is all sorts of waste in charity. For example, charities are prone to run inefficient sporting events to raise funds.
Is the money spent on a 5K Fun Run waste?
Lets say the Jarvis Family put together a health foundation from family funds. This wonderful charity provides grants to people in need. Lets say the foundation had an annual (ahem, ahem) "Board meeting" at Deer Valley. The cost of the chalet, catering and lift tickets for the week come to $40,000. The money for the Jarvis Family Foundation came from the Jarvis family. The foundation appears to be buying the Jarvis family an annual ski vacation along with the money donated to health care.
The ski vacation is not money spent on health care. But is it really waste?
IMHO: It's their money. The fact that they give some money to charity earns my applause.
Everybody who participated in the Komen Race for a Cure gets my applause despite the fact that the race is a horrifically inefficient way to raise money. I mean, get real folks! Wearing a pink outfit and running 5K is not curing cancer!!!! A professor in an ivory can rightfully point their long bureaucratic finger at this effort and sneer the accusation "waste"!
Me, I applaud the racer who buys matching pink socks and a pink hat to go with the pink shoes, pink ribbon and pink running shorts for the race. Yes, the race might make a bureaucrat see pink, but I see wonderful people engaged in life.
I rarely use the word "waste." I cringe at the idea of an empowered bureaucrat running around pointing fingers and labeling people's actions waste.
I see the act of labeling others as waste to be a waste.
I like to think in terms of optimization.
If we had a system where individuals controlled their personal health care resources; people would seek to optimize the care they receive for these resources.
The question of how one optimizes the system is more productive than the question of waste reduction efforts.
The insurance industry optimizes for the needs of the abstract risk pools owned by the insurance company. The reason we see so much waste in insurance is that the system naturally optimizes for the desires of the insurance bureaucracy and not for the needs of the people.
Government health care optimizes for the needs of the bureaucacy.
If one simply changes the funding mechanism so that people owned and controlled their personally health care resource, then one would see the system optimize to the desires of the people.
Doctor Jarvis criticizes the Medical Savings and Loan because it does not include a Bureau of Waste Reduction. I contend that any system requiring a Bureau of Waste Reduction is fundamentally flawed. So, in my opinion, the Utah Patients PAC shows that it is going in the wrong direction by engaging in the inherently negative discussion of waste reduction.
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