First, the latest T. T. Mitchell Consulting Healthcare newsletter, It’s All About Cash Flow, is now available.

There’s been a lot of talk about the Obama Administration’s plan for health care, and whether it will work. The main issue with it is that many people don’t believe there will be enough money to fund it, and everything else the government is presently doing, to make it work. True, we do still have a couple of military battles still being fought, and the trillion dollar bailout packages to deal with, but can we also fit health care into the mix?

I briefly touched on the general subject of the healthcare crisis on this blog, and on another blog I wrote a little bit about healthcare reform after one government legislator stated that, in his opinion, “health care is a privilege”; so much for our governmental leaders feeling as though they need to help we, the people, out.

As someone who’s been in health care finance for over 25 years (took long enough before I could use that phrase), I have my own opinions on all of this, obviously, and I’m going to address a part of this that I haven’t addressed before, which is whether I believe we can afford it and what I think is the most important thing to deal with.

I’m going to start with the most important thing to deal with first. In my opinion, number one on the list is preventative medicine, which is mainly physicals. Many insurance plans don’t include a yearly physical as part of their coverage, and I think that’s ridiculous. The least amount of medical costs occur when one finds out there’s a problem early on. That’s why yearly cancer screenings for breast and cervical cancer are so crucial for women, but truthfully, any screenings should be covered by insurance. However, I’m of the opinion that, at the very least, every person in America should be covered for a yearly physical of some sort. It should include the screenings, but I could understand if it didn’t include extensive blood work, which can be expensive.

What many people don’t know is that most insurance plans are built to cover you only if you have a true diagnosis of something wrong, or if treatment is given to make you better. Medicare is a perfect example of this; their coverage is only for improvement, not what they consider “maintenance”. So, if you need physical therapy, the medical records need to reflect improvement in your affliction to be covered by Medicare. At the first sign that all that’s occurring is that you’re maintaining the best level you can reach, coverage ends.

The same goes for many Blue Cross plans. Every claim has to have a diagnosis code on it, and if that diagnosis code doesn’t pretty much say there’s something wrong with you, something that lends verification to the particular tests or procedures your physician wants you to have, they’re not going to cover it. Many of you already know that, sometimes, when your physician contacts your insurance plan for an authorization, that sometimes they deny those diagnosis codes for whatever reason they can come up with. Indeed, many years ago when I needed an operation, they denied it saying it was cosmetic, until I called myself to tell them I was having pain, and obtained a secondary diagnosis code that I hadn’t realized my physician hadn’t submitted at the same time as the original code. It’s too bad that, sometimes, you have to be somewhat of an authority on something to get it covered by an insurance company.

Now, can we afford it. Truthfully, this is way more affordable than President Obama’s plan, although it’s not close to being as overly comprehensive. With his plan, people will have coverage for treatment of actual ailments, especially children, but it will also encourage business owners to provide insurance coverage for all employees. It also taxes the highest income earners at a higher rate. Whereas I believe those at the higher income levels should have their taxes increased somewhat, back to the levels they were before President Bush rolled them back to help encourage job creation, which obviously didn’t work, Even all the billionaires in America can’t be counted on to fund everything, nor should they be. I really worry that President Obama’s plan will falter, as many physicians aren’t going to accept much lower payments than even Medicaid, or even at Medicaid levels, which they don’t now. A misnomer for many people is that physicians are making money hand over fist; the reality is that half the physicians in this country are losing money, though for more than one reason.

Anyway, here’s my thought and possible numbers. There are approximately 300 million people in America. At last count, which was from 2007, there’s about 46 million people who don’t have any health care coverage at all. I propose that $50 billion dollars be set aside for people who have no health insurance at all, which means about 50 million people at $1,000 a year. Physicals usually cost around $250, lab work associated with physicals another $400 or so generally, which comes to $650. And that’s for regular physicians, because the federal government could always come to contractual agreements with Federally Qualified Health Centers (FQHC’s) to take care of this work, which would reduce the rates dramatically. If medications are needed for something short term, the rest of the money could be spent on that. The government could name a fiscal intermediary to handle all claims, or they could set it up where anyone who spends money on health claims for the year get to write it off their taxes, and I don’t mean write it off while calculating income. I mean, after all calculations are completed, they get to write off any additional expenditures, as long as they attach all receipts from the visits. At the same time, offer tax incentives to businesses that under fund their employees health care plans to give them the ability to get physicals also, or at least some kind of preventative care.

The Obama Administration’s plan calls for between $50 and $65 billion dollars, so immediately my plan is in line with his, possibly costing less. That’s because we all know that these 50 million people aren’t going to take advantage of this opportunity because, well, that’s just how people are. My belief is that if 60% of the masses take advantage of this, that’s a high number. That means, on my plan, the costs come down to around $30 billion. If someone ends up having critical issues, they could then be encouraged to apply for either Medicare disability or Medicaid, which is what happens now when people without insurance come into hospital emergency rooms. Also, just for edification, according to the 2007 figures, out of that 46 million, 20% are illegal immigrants, who wouldn’t be covered under the national plan, and thus the real amount would go down even further. Of course, this would give the government latitude to decide whether to cover them under this plan, or do as they do now and give more money to states with high illegal populations to help cover them under state insurance plans.

Anyway, this is one suggestion that, unfortunately, almost no one will ever see. But it’s a solution that, in my opinion, could get the job done, once all the logistics and legal paperwork were completed. What are your thoughts; please let me know.

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