The goal of the project was to show that it is possible to fund health care in other ways than pooled insurance.
The Medical Savings and Loan simply breaks apart a group insurance pool into individual savings and lending accounts. Sam Granato said his insurance costs were $18,000 per employee per year. The MS&L would put half this amount in a savings account. A quarter in a loan reserve and the rest in a grant program. The loan reserve would go into the savings accounts if unused.
The system simply takes the money that goes into an insurance pool and gives the bulk of the money directly to the policy holder with the rest going into a combination of loan reserve and grant programs.
This mathematical model lets people directly contrast the merits of individual and pooled funding of health care.
People could take this model apply it directly to real world data and ask the question: Are people better off with pooled financing of health care or individual financing of health care?
My goal during the last two years was simply to find a group to discuss the model.
I failed to achieve my goal. Hundreds of letters, blog posts and tweets have received nothing but cold shoulders.
The Medical Savings and Loan is a real model. It is very easy to implement. I believe in the scientific method. It would be very easy to put together a Medical Savings and Loan program.
Health care financing is an interesting business because a program can underwrite itself. Lets say you had a group of 3000 policy holders paying $10,000 a year in premiums. Well, you have a starting point of $30,000,000.00 of yearly income.
The ideal experiment would have 10,000
The administrative cost of the Medical Savings and Loan is significantly lower than insurance. Insurance companies have to have a big claims approval process, expensive actuaries and massive legal departments.
The Medical Savings and Loan puts the savings accounts in a local bank. Policy holders pay their medical expenses directly from their accounts. This eliminates the costly claims approval process.
Legal costs would be lower as well. Insurance companies have lawyers who sue doctors and defend against lawsuits from policy holders. The Medical Savings and Loan steps out of legal picture. Patients would still need to sue doctors, employers, etc.. The Medical Savings and Loan, itself, simply moves money between accounts.
The administrative cost of a Medical Savings and Loan would probably come out to around 1% of the premium. An experiment with 10,000 people over ten years would have about $10,000,000.00 to pay for the work of a half dozen middle class employee/owners. (The best corporate structure for the Medical Savings and Loan is the buyer's co-op with employee ownership).
Did anyone hear that? Administrative costs for The Medical Savings and Loan might be as low as one percent.
Assuming that people are more careful with their money than they are with other people's money, the Medical Savings and Loan could realize up to a twenty percent decrease in health care expenses than insurance.
It is unlikely that the medical savings and loan would cost more than insurance. So, it would be a good experiment for a company wanting to control its health care expenses.
Although my goal of the last two years was simply to find a group to simply discuss the idea ... a group that experimented with the idea just might find giving people direct control over their health care dollars is a fun experiment.
The Medical Savings and Loan would be a great paradigm for discussing health care. One can also use it as an experiment to compare pool funded health care with individually funded health care.
I have tried for two years to get anyone*, anywhere to discuss the idea. I have enough money to drive as far as Arizona, Colorado, Nevada, Idaho, or even Texas.
(*By anyone, I mean a group committed to sound rational thinking. It would be a waste time to discuss an idea with a group seeking to project false images on the idea.)