Vic Fuchs on desirable health insurance overhaul

In JAMA (gated:(.  Vic isn't optimistic about the political prospects of large scale reform of health insurance, but he has some thoughts about where we've gone wrong, and where we might try to go.

November 27, 2018
How to Make US Health Care More Equitable and Less Costly
Begin by Replacing Employment-Based Insurance
Victor R. Fuchs, PhD1
JAMA. 2018;320(20):2071-2072. doi:10.1001/jama.2018.16475

"With few exceptions, employment-based insurance is administered by health insurance companies. In consultation with employers, many of whom are self-insured, the insurance companies design benefit and premium schedules, negotiate reimbursement rates with hospitals and physicians, and approve or disapprove medical center, physician, and patient claims. There are only a few very large health insurance companies and many small ones, but none has been successful in restraining expenditures. The inability of large insurance companies to bargain more effectively with hospitals and physicians is a systemic problem.

"Most health care is delivered locally and, partly as a result of mergers and acquisitions, a predominant or premier hospital and affiliated physicians in a local market may have more bargaining power than even the largest insurance company. In some markets, a large insurance company is forced to pay more than twice the Medicare fee in part to retain a popular health care system on its plan.
...

"Box 1.

Characteristics of an Alternative Approach to Employment-Based Insurance

• Universal eligibility: Unlike employment-based insurance and many of the special government programs with sharply defined eligibility criteria, everyone would be insured for comprehensive health care, including hospital care, physician and other professional services, and prescription medications.
• Funding: This would come from a broad-based tax dedicated to health care.

...

Box 2.

Suggested Guidelines for an Alternative Approach to the Organization and Delivery of Medical Care

• Rely as much as possible on private-sector responsibilities and initiatives
• Limit the government’s role to broad decisions that do not require a large bureaucracy to implement
• Give consumers a choice of health care plans at annual enrollment. In contrast, giving insured patients a choice for individual hospitals and physicians leads to higher not lower expenditures. Choice should also include the right of individuals to buy more than the basic plan that would be paid for with their after-tax dollars.
• Provide for competition among health plans; this will be more valuable than competition among individual physicians.⁷ Competition should focus on service and quality of care.
• Develop reimbursement methods other than fee-for-service. Some economists maintain that risk-adjusted capitation payment to plans is the best way to achieve cost-effective care. Plans receiving capitation payment could offer productivity incentives to physicians if desirable."