top of page

Medical Insurance

Issue
 
   Medical costs have risen over the years with insurance premiums becoming too excessive for the average person to afford in America. Health-related costs are also the primary reason for personal bankruptcies in this country.
Near-Death Evaluation

   One manner of reducing medical costs is to deny treatment during the final days of a patient's life. On average, nearly 70% of a person’s lifetime medical expenses occur during the last two days of their life. Providing medical treatment to patients who are about to die within a day or two is a rather unjustifiable medical expense that should be avoided if possible.

   The situation may be improved if physicians were to follow a standardized procedure that determines the survival status of a given patient before administering treatment. If the survival prospects are low, then care will only be administered to ease the patient’s suffering rather than treat the medical condition itself.

   Even though denying adequate care for life-threatening conditions may become unpopular and difficult for physicians to follow, the policy has the potential of reducing medical costs by a fairly large amount (e.g., 50% or greater), which is significant just by itself.
Price Controls

   Another measure that may be used to reduce costs is if the Department of Health maintained a universal charge list for all medical products and services in the nation. This will establish a maximum limit on how much the medical industry may charge their patients as a matter of price control.
Ban Insurance
 
   Another possible manner of reducing medical costs is to ban health insurance. All insurance policies are essentially pyramid schemes in nature where a large number of contributors pay into the system, but only a few benefit.

   The problem that insurance causes is that by having a large group of people pay for a single patient, the medical industry is allowed to increase their fees much higher than what a solitary person may afford. However, if insurance was banned then the entire situation would correct itself where the medical industry would be required to reduce costs in order to remain in business.
Sample Numbers

   Suppose that the average salary in America is $50,000, this amount could be used as a guide to estimate the affordability of health care if medical insurance was banned.

   In this example, 5% of gross salary should be considered for building a personal health expense account that will pay for a lifetime of medical costs. The medical industry will have to reduce their costs to fit within this limit in order to be affordable for the average person:

                                      $50,000 gross salary
                                            15% total tax of skeleton gov't. (federal, state, city combined)                                                                                35% housing/rent
                                            25% living expenses (food, clothing, entertainment, etc.)
                                            10% large purchases (accumulate multiple years for new car or appliances)
                                            10% savings/investments
                                              5% health care

   The above assumes that voters will approve of the proposed skeleton government (max 15% total tax), and does not include anything extra like paying off the national debt or Social Security. This means that the medical industry will have to reduce their expenses to fit within $2,500 per year for a given patient. A 40-year period, from ages 20-60, results in a total of $100,000 being available for a lifetime's worth of medical expenses.

   The medical industry (or Health Dept.'s universal charge list mentioned above) will need to cut costs in every aspect in order to accommodate this estimate.

   For example, consider the following regarding the cost of surgery. The average salary for general surgeons is $450,000, and registered nurses $98,000. If five surgeries are performed each week (which is below the national average so it's easier on the medical staff), that results in $3,461 for two surgeons and $1,507 for four nurses, or $4,968 total for six medical personnel per procedure (including pre-/post-care).

   Add the expense of medical instruments, supplies, and the use of a sanitized room, the average surgical procedure should be approx. $8,000-$10,000, which is affordable with the above estimate. However, the medical industry charges a great deal higher than that (e.g., coronary bypass costs up to $125,000, with heart transplants over $1,000,000).

   After years of relying on the "blank check" aspect of insurance where the medical industry overcharged patients excessively, medical costs under the new policy will need to adjust to a world where patients pay for the procedure themselves, which will bring costs down to more normalized levels.

   Pharmaceuticals, who have stated that the high cost of prescription drugs is due to the additional cost of failed drug trials, will have to limit expenses to consist only of the manufacturing of the drug itself. The additional cost of failed trials during research and development will be primarily funded through donations and charitable organizations rather than passed along to the consumer.
​
   If enough cuts are made by the medical industry to accommodate the national salary estimate (or forced due to Dept. of Health's universal price controls), adequate medical care may be provided without bankrupting the average citizen in this country.

   Since the medical insurance industry will be dismantled by this policy, their stockpile of funds from collecting premiums over the years should be returned to the original payer as a lump sum to give patients an initial boost to their personal healthcare savings accounts.
Plan of Action

   First, the nation needs to decide whether to grant the Health Dept. the ability to establish national price controls, or continue with the present manner of insurance companies negotiating with the medical industry. Normally, products and services are managed by their supply and demand ratio, however, relying on such a measure may not be appropriate for health care situations.

   The reason why is that under normal circumstances, a patient will never refuse medical treatment for their health condition so choice is essentially removed from the equation. This prevents the supply and demand mechanism from being an effective means in controlling costs, and why costs have risen so dramatically over the years. Because of this, the lack of a checks and balances system being in place, justifies the reason that the Health Dept. should be allowed to enforce price controls on the entire medical industry.

   The second matter to consider is if additional measures are necessary to further reduce medical costs in general. Such as limiting malpractice lawsuits, restricting pharmaceuticals to only charge for drug production, and denying medical treatment for near death patients (as mentioned above). Implementing additional measures will help reduce the overall cost that the Health Dept. needs to consider for efficient price controls.

   Lastly, the nation needs to decide what to do about medical insurance itself. Either continue with private insurance, establish a nationwide insurance policy (e.g., Medicare For All), or ban insurance entirely.

   Each option has their advantages and disadvantages:

      Option A: (private insurance)
         Costs continue to rise due to the need to make profits (policyholders pay higher monthly premiums)
         Increased chance of being denied coverage or to receive benefits
         Negotiated prices with medical industry may continue but shown to be ineffective
         Businesses, especially small businesses, will transfer more insurance premium costs to their employees

      Option B: (nationwide insurance policy)
         Non-profit federal program to minimize management costs
         All citizens are covered and receive benefits for any treatment (never denied)
         Medical costs continue to increase due to large group paying for individual health care
         High insurance premiums to handle the entire nation's medical expense (may be unachievable)

      Option C: (ban insurance)
         Greatest reduction in combined medical/insurance costs (lifetime savings of $320,000 to $700,000)
         Employers no longer pay insurance companies (avg per employee $8,951/yr single, $25,572/yr family)
         Insurance dismantled to start personal healthcare accounts (lump sum plus employers' avg $15,500/yr)
         Civil rights protected by not being forced to pay for others
         Everyone pays for themselves out of pocket (may not be able to cover all medical treatments)
bottom of page