Implementation Of Permanent Health Reform
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2017-04-04 09:16 by Karl Denninger
in Health Reform , 872 references Ignore this thread
Implementation Of Permanent Health Reform*
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Let's talk about the implementation of my model bill that I recently posted to reform health care on a permanent basis.

It's fairly easy to envision timelines based on complexity.  Simply put, most of this isn't complex because providers have price lists now -- you just can't see them.  So with that said, let's look at an example and assume The Bill was passed and signed somewhere around 30 September -- or the close of the fiscal year.

What's next?  The following timeline appears to be reasonable.

Beginning immediately on signature with implementation required on or before 1/1/2018:

  • CMS (Centers for Medicare and Medicaid Services; the existing federal agency) would be required to spin up the interface for Treasury to verify whether someone who presents credentials as a US citizen or lawful permanent resident is, in fact, a citizen or lawful permanent resident.  Treasury already has this via the Social Security Administration, since they have the records of all issued Social Security numbers and addresses from tax filings.  In fact you can get at this right now (for yourself) via http://ssa.gov.  CMS also already has an electronic interface system for all medical providers who are registered in order to submit Medicare or Medicaid billing; ergo, the infrastructure is already in place along with access credentials.  Medical providers who wish to avail themselves of the ability to bill Treasury for indigent patients would have to register, but the number of providers currently not registered is a tiny minority of the whole.

  • CMS begins publication of Medicare reimbursement rates for all procedures, drugs and devices.  CMS already has developed and maintains this information so this is simply a publication of existing data and can be done very quickly.  The list may be updated annually as is now the case however with Medicare being a reimbursement source but not a direct billing source as of 1/1/2019 fair notice to all non-Advantage Medicare recipients so they can start shopping providers and services is necessary. (Medicare Advantage customers will have this data from the Medicare Advantage company they select and it may well be different between different Medicare Advantage providers.)

  • Providers must put together their price lists.  They have three months to do so; failure to have and post one as of 1/1/2018 means you're closed!

On 1/1/2018:

  • Providers must post their prices and on demand honor them, along with affirmative consent requirements.  A customer may present him or herself on January 1st 2018 and request the published price.  If they do so then binding, fixed-price treatment per the price schedule and treatment consent rules in the bill must be honored.  Note that all such binding prices must include any consequential events or complications (e.g. those caused by the treatment or the facility in question.)

  • No event caused by a provider or treatment may be billed to the customer.  Alignment of the customer's interest in NOT having an MRSA infection, for example, with the provider's interest in reducing their cost must take place on an expedited basis.

  • "Most favored" nation pricing for drugs begins.  No exceptions, no apologies.  Drug prices drop like a stone.

  • Open testing begins.  If you wish to purchase a test or other diagnostic without invasive exposure beyond a blood draw and not bearing radiation or similar exposure, you may -- for cash and without a prescription or doctor's order.  Since all medical providers must have posted prices on 1/1/2018 you have a list of prices available to you and places to shop from.

  • Auxiliary services must be open.  You can buy said test wherever you want and bring the results to your doctor for consultation or treatment, without limitation.

  • A 365 day period begins during which medical providers may continue to maintain records and coding, but they must also provide human-readable records at the point of service to the consumer.  Since there is basically no medical office in the nation that doesn't have PCs or similar this is trivially done; 3 months is more than enough time to put in place the policy to provide records at the time of treatment to the consumer.

  • CMS and Treasury continue their tax processing and billing integration work with a start date of 365 days hence, or 1/1/2019.  This will be necessary to deal with EMTALA repeal and related from the bill.

  • A 180 day notification period begins during which lifestyle modification is mandatory for those with existing conditions on public medical assistance in order to receive Treasury Billing (and potential medical debt forgiveness at death due to their indigence.)  This specifically applies to Type II diabetes suffers on publicly-funded health programs, although the list of conditions will likely expand.  Those who claim that cessation of eating carbs and PUFAs are not sufficient to bring their blood glucose either under control or materially improve their condition may challenge the individual applicability to them during this time, and must prove same via isolation test (which will likely take less than 48 hours!) with them bearing the cost of the testing in cash if they lose.  Since nearly all of these people either have or should have home instrumentation (e.g. a blood glucose meter), and those who don't can certainly buy one for a few dollars at any drug store including such outlets as WalMart over the counter, they ought to have damn good evidence before attempting to claim an exemption.  These people will also know in advance, or easily be able to determine, if they're going to get caught if they try claiming an exemption and are lying.

  • A 180 day period begins during which Health Insurance companies are required to put together true insurance offerings as required under the Bill to continue selling any health-related policy with effect beyond 12/31/2018.  Since state regulators typically require some notice period (usually six months) this means they must submit same by 6/30/2018.

On 7/1/2018:

  • Medicare and Medicaid recipients with diabetes who have not made the lifestyle adjustments required are cut off from further government funded or transferred billing for their condition until and unless they make the required lifestyle change for at least six months.  They had six months warning and ability.  For the last six months of 2018 the Federal Government, during the remainder of the transition, will see approximately $200 billion in reduced spending. 20% of the adults in the United States have had their pants fall off.

  • Health insurance companies must have posted to the states their catastrophic plan pricing and coverage, along with whatever other offerings they wish to make for the 2019 calendar year.

  • All providers who intend to bill indigent customers must be registered with CMS to provide CMS with sufficient time to process any pending applications and resolve questions prior to 1/1/2019.

On 1/1/2019:

  • Level pricing and quote-before-service (and the procedures for exigent circumstances) for all customers is mandatory.

  • Centralized medical record and coding requirements end and all customers must receive their medical records at the point of service.  The AMA's monopoly on coding revenue (which, IMHO, should have resulted in them being indicted years ago) ends.

  • EMTALA repeal is effective; illegal immigrants no longer can access emergency services at the public's expense.

  • Medicaid repeal is effective at both State and Federal levels; all Medicaid spending ends.

  • Medicare Part "B" repeal is effective.  For "HMO" or "PPO" style coverage post this date Seniors can buy Medicare Advantage policies as they do now but they are not compelled to do so (as they are now.)

  • PPACA repeal is effective; all Obamacare policies, taxes and tax credits end.

  • US Code and CFR amendments to remove the PPACA, Medicaid, and Medicare Part "B" components become effective.

  • Lifestyle requirements continue.  Again, this specifically applies to Type II diabetes where a zero-cost lifestyle change simply comprised of what one eats is sufficient to reduce or eliminate drug and procedure requirements along with the degenerative effects of the condition.

  • All citizens or permanent residents who assert inability to pay a provider now have their bills submitted to Treasury for payment within 30 days.  The customer can choose any provider but the price charged must be level as for anyone else.  Providers who have more than 50% of their customers submitting invoices to Treasury on an annual dollar-billed basis are subject to audit for charges being reasonable and non-collusive (see below.)  The 60 day "no fault cure" policy begins for those who have bills submitted to Treasury due to a claim of inability to pay and tax liens begin to accrue on March 3rd, 2019.

  • For those on Medicare CMS continues to provide the payment rates it will cover to the public for Parts A and D but the customer must submit claim for payment and is responsible for the difference should the price charged be higher than the reimbursement amount.  Medicare customers thus now have an incentive to shop and no restriction on which provider they use for services.  For Medicare customers not using an "Advantage" plan Medicare Part "B" ends both as to the premium collected and benefit disbursed since Part "B" has been deleted.  For Seniors who find themselves unable to afford the portion of payment they must make even with Medicare's typical 80/20 split due to indigence they may assert that indigence just as can a former Medicaid customer and as such low-income Seniors are protected to a much greater extent than is currently the case with Medicare since they enjoy 100% access to all medical providers -- a huge increase in choice compared to today and they have access to the same billing deferral via Treasury that former Medicaid consumers have.

  • For former Medicaid consumers they may assert indigence and thus may access any medical provider as may anyone else who can pay cash.  This is a massive improvement in their access to health services over today as many providers today refuse Medicaid patients (other than via the ER!), but it comes with a tax lien that, should their economic circumstances improve in the future or should they have refundable tax credits, they will be expected to pay.  As a result former Medicaid recipients will, for the first time, have an incentive to both shop and consume medical services wisely.  Many former Medicaid consumers will choose to pay cash, especially for drugs, since a large variety of drugs will be available at monthly costs similar to that of a cup of coffee from McDonalds, but for services where they cannot afford to pay directly the safety net will be available via the Treasury.

  • Private and corporate-funded catastrophic plans, along with any new "PPO" type plans, take effect.  
    With price transparency and no billing obfuscation or "hiding" insurance costs drop like a stone.  Typical "catastrophic" coverage will be available for a few hundred dollars a year.

  • Direct and hidden billing of insurance companies of all sorts, along with "explanation of benefits" nonsense and the implied extortion attendant with same ends.  The customer is billed at a level price as with all other customers for the same good or service; whatever insurance they may have, whether it covers the service(s) provided and how much it will cover is between only the customer and the insurance company.  Collusive behavior, hidden pricing, performance of procedures without prior consent (except in exigent circumstance) and price-fixing disappears entirely.

  • For the first time in 30 years real competition breaks out in the medical field -- not just on price but also on quality of service.  With cost and outcomes exposed customers will be able to research and choose just as they choose a cellphone or automobile today.
  • Non-citizens/non-green-card holders have no right to treatment of any sort nor does any provider have liability for refusal to provide it without payment.  Non-citizens and non-green-card holders (visitors, illegal immigrants, etc) may purchase services and products for cash should they be willing and able to do so.

  • State CON laws and similar are all pre-empted.

  • Mandatory enforcement of 15 USC and the civil rights of action for individual consumers against medical providers for price-fixing, collusion and similar offenses begins.  Note that providers who collude or attempt to defraud Treasury and allegedly low-income customers claiming indigence (who really aren't) are subject to mandatory prosecution and punishment under the Bill.

And.... it's done.

The medical scam has ended.

There are no more Federal Deficits; in fact, we run a perpetual budget surplus and begin paying down the national debt.

Your standard of living starts going up every year even without a raise by about 1% each and every year instead of going down as it does today.

We no longer pay for illegal immigrant medical care at all from public funds.

You get a price that is the same as everyone else for the same good or service in the medical field just as you do at the grocery store, the gas station and the local restaurant.  The outrageous price discrimination (sometimes as much as 10, 20 or even 100x or more) served up on some people -- discrimination that usually bankrupts the consumer in question -- ends permanently.

You know exactly how much you will be billed for a medical procedure, drug or device before you choose to undergo that procedure or accept the treatment.  Your insurance company, if you have one, will have to make available what they will pay and the hospital, doctor or pharmacist must tell you what they will charge.  You will thus know what the total cost to you will be -- before you sign a consent form or have a procedure done.

If you get an infection from a hospital you cannot be billed for the drugs and time to treat that which they gave you due to their incompetence.  That risk and cost is finally on them, which will drive innovation and greater care to prevent such infections that harm and even kill Americans today.

If you can't pay you will still be treated and can still choose your doctor, but you will be responsible to cover the (much more-reasonable) bill if you become able to pay it in the future.  This will permanently put an end to the practice of poor people using the ER like a doctor's office since this sort of abuse will no longer be advantageous compared against going to a regular physician.

Drug prices fall in the United States by at least half (and more likely by 80% or more on an average basis) and for those with chronic diseases that have been sucking down drugs and procedures while refusing to make simple, zero-cost lifestyle changes they finally have a strong incentive to both do so and have their health improve materially at the same time.

There will be no more $300,000 snake bites, $150,000 scorpion stings and $1,000-per-stitch fees that get lumped on you without any way to prevent them when something bad and random happens.  Any medical provider who tries it will find their bill void and they will be prosecuted for fraud.

Obesity and diabetes incidence falls dramatically since it is now strongly in everyone's best interest to practice simple changes in their lifestyle.  An epidemic has broken out -- of people having their pants fall off.  It's a good epidemic and America is noted and lauded as being the first nation to have reversed the increasing rate of obesity and Type II diabetes.

The nation becomes far more productive as the cost of employing someone drops by a solid 15% and America becomes the place to put a multi-national business.  In short labor expense drops tremendously and productivity soars.

If you're not a currently-overpaid administrator you get a raise; for a typical median family it will be about 10% immediately as your employer's cost of having you on staff will drop by at least that amount.  For the average family of four you will see, net of your medical expenses, roughly $7,000 richer in cash spending power after tax each and every year.

Those who are currently-overpaid administrators in health care will find jobs in other sectors.  It may take a while but it will happen, as the economy comes roaring back with the newfound efficiency and productivity improvement from deleting the fraud currently consuming almost one dollar in five.

State and local pensions and budgets stabilize and, over time, taxes come down at the state and local level as the levies put in place to try to stay ahead of the pension destruction are no longer necessary.  Specifically, property taxes decrease materially which will cause both the cost of owning a house and rents to decline.

Your car insurance gets cheaper as your liability policy, much of which covers medical expenses coming from accidents where you are at fault, along with uninsured motorist coverage, will decrease dramatically in cost.

Federal Spending will contract to something similar to this -- and I note that this chart presents a pessimistic estimate. We would almost-certainly do better than what is depicted here and, I remind you, both Seniors and indigent citizens would receive better care and more choice than they have now.

And we prevent this -- our federal debt -- from blowing up in our face as the CBO currently predicts -- an event that, if it occurs, will destroy the nation just a few years from now.

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