The Alternate Prescription (Parts I&II)

The Alternate Prescription: Part I – Medical Litigation Reform

Today is my first crack at writing what I think the GOP should start marketing as an alternative to Obamacare. We can’t just be the party of “No!” Sometimes people are stubborn, and we have to develop backbone and be the party of “H___ No!”

While we do that, we should also put forth a better idea than Nancy Pelosi. (Come on guys, I’m not setting the bar very high here!) My first suggested reform involves tort litigation. I call it Insurance Risk Reduction through Litigation Caps.

The goal here is to limit the extent to which a top-dollar lawsuit can skew the expected value of how much an average medical malpractice insurer will have to pay out per policy. This, in turn, deprives insurers of actuarial justification to overcharge doctors based upon a mean value taken from a left-skewed distribution.

My proposal is to place a limit on how high an award can be in a medical malpractice lawsuit. I say it can go no higher than three times the incurred medical expenses, directly, specifically and indisputably linked to the act of medical malpractice itself. This would accomplish two tasks that would significantly lessen the insurable risk faced by medical doctors.

It would get rid of claims of mental anguish, or societal detriment or any of the other male bovine scatology that gets pedaled to juries. Plus, it would severly limit the practice of class action lawsuits. You could still take Cecil Jacobs to the cleaners, but a MD would have to be about that blatantly criminal in his/her negligance to get caught up in a class action liability suit.

Again, the end result of this would be to lop the 5% of lawsuits on the far-right hand side of the cost distribution back by a significant sum. This would force actuaries to derive their insurance rates off of a distribution where the mean value paid out would far more closely approximate the median. Given that type of a distribution, that margin of difference between median and mean would shrink, and so would the unfair cost of medical malpractice insurance.

Given this extra cost reduction, doctors could either charge less for their services or upgrade their facilities and provide better care. All of this without additional Federal expenditures to achieve some chimerical cost control in future years. That, my friends, is installment 1 of The Alternate Prescription.

PS: HT to TMR/RS/iCon stalwart Jaded_by_Politics for kindly suggesting that I go after tort reform!

The Alternate Prescription II: The Firm-Fixed Price Insurance Safety Net

As much as I feel the need to go back home, brush my teeth again and then use up half my mouthwash after saying this, I believe it should be said. Hillary “Queen of the Evil Borg, Herself” Clinton teetered on the brink of making an intelligent contribution to the national debate about healthcare during her mawkish and insipidly stupid run for the Democratic Nomination in 2008. She aptly described much of what was wrong with American healthcare as being a problem with insurance.

Where she drove off into the drink; like a married Kennedy with a pregnant girlfriend, was when she proposed a solution to this problem so convoluted that Ignatius of Loyola and the Jesuits would need better lawyers to properly understand it. My prescription is more transparent. I propose the Firm-Fixed Price Insurance Safety Net.

During the next US Census, the government should ask whether each countable citizen has current health insurance. If the answer to that is “No-sirree-Bob, Dagnabbit!,” then Sam’s Government should enumerate that citizen and all of his tax-deductable dependents on a national uninsured list.

The government should then tabulate this list and put together a request for proposal to insurance companies with large enough business bases to insure every one of these people who would want insurance, but are unable to afford it. This RFP would involve bare-bones, catastrophic coverage policy that also included a $500/year option pool that the insured person could spend on any additional service they required.

Once the government received bids, they would convene a healthcare Source Selection Evaluation Board to select a syndicate of insurers to offer Sam’s Safety Net to the uninsured. This would offer a baseline minimum for any person who desperately needed health coverage, but could get it in no other way. The government would reimburse the syndicate members at an agreed upon, per-capita firm-fixed price to insure the uninsured. This arrangement would be repeated every three years to avoid the complacent contractor syndrome.

The government would then offer every uninsured American this insurance free of charge, contingent upon the condition that they have proof that they cannot afford any of the policies available at work or on the market in their state of residence. This would not be great insurance, but it would at least cover the unfortunate or careless individual who got hit by a car and paralyzed one day.

This would not be a glamorous solution, nor would it be popular. However, it would accomplish three things. It would insure the struggling poor who can only land part-time, no benefits McJobs. It would avoid crowding out by deliberately offering a basic, no-frills product that only crossed the threshold of success; not luxury. Finally, it would
Allow the government the opportunity to control costs and quality by firing contractors who padded bills or unfairly denied legitimate claims.

This is far from perfect. Our current national debt is $11Tr, and we cannot afford perfect. This is functional and does the job inexpensively. That’s what I expect my HMO to do as well. This concludes The Alternate Prescription II.