Real Healthcare Reform: Changing the Incentives and the Rules of the Game; Creating an Electronic Health Record for Every Citizen Who Wants One.

If you have the financial resources of Bill Gates or Warren Buffett you needn’t pay money to a health plan each month, since if you get sick or injured – even very seriously - you have more than enough money to pay all your medical bills yourself.
But those of us with significantly less financial resources must find some other means of dealing with the thousands or even hundreds of thousands of dollars or more of medical expenses that we might incur should a serious illness or injury be our fate.
Enter the concept of “health insurance”.
Large numbers of individuals and/or their employers pay some money each month into one or another big pot called a “health plan”. Those individuals who remain essentially very healthy for many years and then suddenly die or perhaps leave a particular health plan for some other reason – if they have put more money into the pot than was taken out to pay all their medical expenses - wind up helping to pay the medical bills of those members of the health plan who become seriously ill or injured and incur a lot of medical expenses.
Many members of health plans don’t seem to fully understand - or perhaps choose to forget - that if they become seriously ill or injured, for the most part their medical bills will be paid by the members of their health plan who have remained healthy. Some Americans believe that healthcare should become a “right” of every American citizen. If a nationalized single payer health plan were enacted, every American citizen - who for whatever reason became ill or injured and incurred significant medical expenses - would for the most part have his or her medical bills paid by all U.S. taxpayers.
For any health plan to work which has a large number of people pooling their money to essentially pay the medical bills of whichever members of the plan become seriously ill or injured - rules must be established as to when and how much money may be taken out of the pot e.g. “legitimate” doctor bills and hospital bills. Equally important is keeping track of the amount of money that is being put into the pot each month in premiums paid by health plan members or their employers. If too much is being paid out in expenses as compared with the amount being received in premiums, the pot will soon become empty and the health plan will go broke.
As previously mentioned, the monthly premiums paid by individuals or their employers go into a health plan’s big pot from which “covered” healthcare expenses are paid. But also from this pot are paid all the health plan’s administrative expenses including what may be big salaries and golden parachutes for CEO’s and other “healthcare executives” – individuals who may be paid to find technicalities of one sort or another in the health plan’s agreements so the health plan can deny or reduce payments, raise premiums, cancel insurance, or in one way or another minimize or exclude “bad risks” from the health plan. All such questionable “business activities” are done to enable the health plan to make a profit and remain in business.
Currently we are experiencing continual increases in healthcare costs that are unsustainable and which, if unchecked, will soon seriously threaten the future of the entire American economy. Healthcare costs must be controlled, but how? If a healthcare system made up of health plans is going to have a chance of meeting the needs of its health plan members and simultaneously be able to keep costs under control, something very critically important must first occur.
It turns out that a lot of illnesses and many injuries are actually preventable. Although health promotion and disease and injury prevention receive appropriate socially acceptable and fashionable lip service, the fact is that most of the participants in what should be more appropriately called our “sickness and injury care system” actually do not have any significant financial incentive to spend their time and energy in genuinely promoting health and helping to prevent disease and injury.
Much to the contrary. Other than the actual members of a health plan – patients and potential patients - and their employers and perhaps the employees of some health plans, most participants in our sickness and injury care system - because of the way they are paid - have an enormous (if unspoken) incentive to have massive amounts of disease and injury continue to occur in America. For them, strictly from a financial point of view, the more disease and injury that occurs, the better. And if the disease or injury is serious and requires lots of tests and complicated prolonged treatment, so much the better - just as long as those unfortunate individuals who are diseased or injured are “covered” by “good insurance”, i.e. health plans that are good reliable bill payers.
This is not to say that there are not some excellent and very dedicated and hardworking doctors and other health professionals – who although they are generally paid to care for illness and injury on a fee for service basis – nevertheless every day are attempting to essentially work themselves out of a job by very strongly encouraging health promotion and disease and injury prevention with their patients. Also, it should be recognized that some existing health plans – e.g. Kaiser and Group Health - combine insurance, doctors, and hospitals into a single entity in such a way that provides everyone - including all their doctors - a real incentive to spend time and effort with patients on health promotion and disease and injury prevention as well as on early diagnosis and treatment. But unfortunately the two examples cited above do not apply to the majority of our sickness and injury care system in America.
For the most part - because of the way they are compensated - most doctors and other professional providers, most acute care hospitals and long term care facilities, pharmaceutical manufactures and pharmacists, medical and surgical equipment manufacturers, personal injury and malpractice attorneys among others depend mightily on massive amounts of disease and injury occurring in America and would be significantly negatively impacted if a lot of the preventable illnesses and injuries were actually prevented. This must be changed.
Unless the incentives and rules are changed to give as many participants as possible a real stake in prevention, early diagnosis and treatment, and maximizing health and minimizing disease and injury, getting healthcare costs under control in America will be impossible. Making very significant appropriate changes in the incentives and the rules of the game is the real task and challenge of “healthcare reform”.
For example, should individuals receive a financial incentive to be healthy? It is well recognized that engaging in regular exercise, abstaining from tobacco, and eating moderately so as to maintain a reasonably normal body weight are all significant factors in helping to promote an individual’s health and wellness. These healthy behaviors can all be confirmed by simple tests in a doctor’s office. Why shouldn’t those individuals who practice these health promoting behaviors pay significantly less to their health plan than those who don’t?
To really reform healthcare we must figure out ways – through changes in incentives and the rules of the game - to actually prevent a lot of what is preventable, to maximize early diagnosis and treatment, and minimize disease and injury with all their associated costs. Most importantly we must find ways for essentially every participant to be part of our “healthcare system” not just a part of our “sickness and injury care system”. We need to find ways so that everyone has a genuine and significant financial stake in health promotion and disease and injury prevention, for themselves and others, rather than merely giving this lip service while actually earning one’s livelihood solely from the treatment of illnesses and injuries. This is the challenge.
Significant changes in the rules of the game for our legal system – tort reform – is also critically important so that the gaming of the system now being done by personal injury and malpractice attorneys and their clients can be ended and so that the exorbitant costs to physicians and other professionals for malpractice insurance can be dramatically reduced.
Truly transforming our “sickness and injury care system” into a “healthcare system” by making significant changes in the incentives and the rules of the game would seem to be a formidable task and one that has probably never really been done before anywhere in the world. But it is a worthy task and a critically important task for the future of America and its people.
One important first step is developing the capability of creating an electronic health record for every American citizen who wants one. We need a standardized framework that will allow every American citizen to have an individual electronic health record – a computerized medical record - that can be accessed by the doctors who care for them, regardless of wherever the doctors or the patients happen to be on the planet. It would be like having your own personal online banking account that only you have the password to, but which you can share with the doctors who are caring for you, wherever you may be.
I strongly applaud those who are using their energy and expertise to upgrade our deplorable current paper medical records system and bring medical records into the 21st century. Developing a standardized framework for an electronic health record - for every citizen who wants one – created by your doctor with your assistance, which has proper security and safeguards is something that our national government can and should do as a part of healthcare reform.
If done well, electronic health records will be transformational in helping doctors efficiently and effectively care for patients – whenever and wherever they may be - and will save an enormous amount of time and money which is currently wasted on needless and frequently inaccurate duplication. They will also make it easier to evaluate each patient with regard to health promotion and disease and injury prevention. Like the telephone and the computer, someday we will all wonder how we ever got along without them.
Now is the time for all Americans including their leaders and their doctors to step up to the plate and begin to transform our “sickness and injury care system” into an “American Healthcare System” that is worthy of our great country.

Robert Westafer M.D.