An alternative to health insurance

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Each month my wife and I send approximately $1,600 to Wellmark to pay our health insurance premiums. I am grateful we have the capacity to do that when many do not. Here is an alternative I wish was available:

As consolidations occur in hospitals and clinics, it seems that we will eventually end up with only three primary care providers in the state, the Mercy system, the Unity Point system and the University of Iowa Hospitals and Clinics. Rather than paying insurance premiums and then my provider billing Wellmark, I would prefer to approach my provider directly and negotiate a monthly payment to them for taking care of all of my health care needs. That way I could give them the money and avoid the middleman (the insurance company).

Doing it this way has the distinct advantage of putting all the incentives in the right place. My provider makes money when I stay well so that’s where they place their efforts. That should work to keep costs down overall.

It increases competition because in addition to the option of buying insurance, I could approach any of the providers and ask them how much they would charge me.

It gives me freedom to choose whatever provider I want and not be limited by my insurance plan. If I don’t like my provider I simply move to another one.

There would have to be some rules. The law would have to prevent providers from denying me coverage or rating my premiums based upon pre-existing health conditions. To prevent people from simply buying the insurance when they got sick, there would need to be a rule that there would be no benefits for six months (or some other appropriate period of time) after initiation of the policy other than routine wellness care.

There should be a rule that an individual like me would get the same rate offered to a big company that would potentially bring hundreds of employees to a provider. It’s not fair for me to suffer because I do not have the negotiating power of bringing tens of thousands of dollars to the provider each month.

To avoid overutilization, everybody should have a copay. This should apply to everybody, including Medicaid and Medicare recipients.

Finally, it would be more efficient to authorize those same providers to distribute prescription drugs. That’s the way they do it many places overseas, and it seems to work better than what we have now.

There would be some advantages to the government as well. Instead of having the crazy system we have now for Medicaid reimbursement, why not simply allow a Medicaid recipient to designate which provider they choose and have the state simply pay a monthly fee to that provider? The same idea could work for Medicare if the federal government would buy into this. For people who have Medicare with a supplement, they would simply choose their provider and pay the cost of the supplement directly to the provider instead of to an insurer.

But what about catastrophic losses? Suppose I actually entered into an agreement with a relatively small hospital, but then I get brain cancer and have a multimillion dollar loss (huge medical expenses)? This is where perhaps the state can and should be involved. The concept of reinsurance has been around in the property/casualty insurance business for well over 100 years. I don’t see any reason why that same concept of reinsurance couldn’t be applied to the health insurance system. That small hospital that I have contracted with could simply use a part of what I pay them to buy reinsurance for catastrophic losses so that a small hospital having a half a dozen very sick patients would not have to go bankrupt.

My idea is not to eliminate health insurance, just to offer an alternative. It really is competition at a whole new level.

• Steve Kenkel is a lawyer in Toledo who has grown to appreciate life in his small town.

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