Article 123 A Simple Approach to Reforming US Health Care
By Lawrence Rosier Principal Consultant
Reform of US Health care is difficult, some say impossible due to the many factions involved: social, political and economic. As a management consultant I approach most difficulties by simply following the money but with health care there is also human responsibility. This Proposal provides a pathway for reducing the cost of US health care and facilitates future reforms.
As the American population ages a greater share of the health care cost is being shifted to a smaller workforce. We are also living longer compounding the problem. The US Health Care Expenditure for 2020 was $4.1 trillion, 19.7% of GDP, (from National Health Expenditure) and is about double that of European systems (from Health System Tracker). US Health Care inflation in 2020 was 9.7% (National Health Expenditure). The far reaching goal of this proposal is to reduce the cost of US health care by 25%, $1 trillion annually.
The bulk of a State’s health care expenses for low income and elder care comes from the State buying health care services from private Providers who are reimbursed from Medicare and Medicaid Programs. These two programs were found in some instances to have inflated procedural costs which benefit private Providers but not the public or the State. For example a detailed analysis of the real costs of Cataract Surgery, by Lawrence Rosier Consulting was found to be ten times less than that actually paid by Medicare to the Provider (see Article 110 of Lawrence Rosier Consulting blog). Add to this massive fraud although not by all private Providers, and you have the reason for US health care being double that in Europe.
This Proposal is primarily directed at States. The process does not initially involve the Federal Government; if it did, legislation and debate would be required taking years to implement reforms in the US Health Care system. Current Funding by the Federal Government Is not affected. Implementing States will save $billions from health care waste that can be used to self-finance the state’s expansion of its health care system by building or buying efficient clinics and hospitals. Each participating State will initially need to fund planning for the expansion of its Health Care System. The process will take a few years but the savings from waste will significantly increase from one $billion to several $billion per year depending on the size of the State and how aggressive it is.
I recommend that the State’s Health Care System be managed by the State’s University Teaching Hospitals, which can provide the expertise needed and keep political bias out of the system. The objective is to provide a statewide efficient uniform health care system bringing the best health care to all of its inhabitants at the least cost.
An example of what can go wrong is Haven Health Care, a not-for-profit entity created through a Joint Venture of Amazon, Berkshire Hathaway and JPMorgan Chase. Haven was following my blog recommendations but failed in 2021 (see Articles 7, 42, 117). The main reason for the failure was that Haven had to buy health care services from private Providers and did not invest in its own hospitals and clinics, leaving them paying high prices with none of the benefits. The three companies' employee base, 1.2 million, was spread throughout the US making it difficult to invest in their own local health care facilities. This Proposal provides a solution to this problem for Business and Industry saving them $billions in health care costs, by using State owned facilities and not private Providers.
The main advantage of this Proposal is that it uses the $2 trillion in health care waste to finance its own reform. The Proposal also avoids the Public's fear of reductions in Medicare and Medicaid. You can find detailed information on health care efficiency and government reform in the more than 120 articles at Lawrence Rosier Consulting blog.
About the author Lawrence Rosier.
1961, University Of Missouri Graduate Industrial Engineering. 1972, Western Washington State Honor Graduate Education. 1962, Employed by McDonnell Douglas doing Time Studies on the F4 Aircraft. 1969, Boeing Co. with a team that Certified the 747 Plane. 1975, Alexander Proudfoot Consulting, saved Clark Equipment $½ million (in 1975 dollars). 1981, McDonnell Douglas, Proposed reorganization of the Missile Systems Co. to Sandford McDonnell CEO, the proposal was implemented. After retirement, started Lawrence Rosier Consulting. Lawrence is in excellent health and continues his many activities including support for civic causes.
Lawrence Rosier Principal Consultant 11/18/2022
