10 Steps to Lower Health Insurance Cost in America

Some good things start out as a conversation.  The following is a conversation about reducing health insurance cost in America.  We need it very bad and we need it to avoid a worse fate of socialized medicine.  In future posts I will describe the fundamental flaw in our current healthcare system and the fundamental flaw in a socialized one payer national health plan.  Finally, I will propose a third alternative system. 

The following are ten steps that will reduce medical costs in America.  Steps 11 and 12 in which I will share in a future post will be a part of the third system.  The next article in this series is entitled the Fundamental Problem in the American Health Care System.

The top 10 steps

  • Step 1 – Unless in an emergency situation, no one has a procedure without knowing exactly how much it will cost and an alternative treatment with it’s cost.  – This common sense price transparency would give individuals more choices and more control over their own treatment.  It would also put significant downward pressure on pricing.  Cost savings estimate – 350 Billion.  This Step 1 is greatly enhanced when an individual has a monetary incentive to be efficient with health care dollars.  For more discussion of this topic see Why American Healthcare is Not a Free Market System. 


  • Step 2 – We behaved our way into the health care cost crisis over many decades and we must behave our way out.  We need a revitalized comprehensive education initiative in our schools that links nutrition, physical exercise and maintaining good health.   More must be required of our students regarding nutrition knowledge and physical exercise.  We also need a national public relations campaign as well.  Make it fun….encourage providers to give incentives by reducing premiums for those who can pass a physical endurance test.  If education and incentives for exercise could save American one-quarter of one percent on health care cost the savings would result in an overall reduction of 87 Billion dollars.


  • Step 3 – Physician charges are a function of supply and demand. For decades the AMA in collusion with medical schools have been artificially limiting the number of physicians who get a medical license. If we tripled or quadrupled the number of new physicians graduating from medical school it would put downward pressure on prices for their services. Increased supply in addition to step 1 would significantly reduce healthcare costs for Americans.  8% savings on Professional fees produces 72 Billion dollar saving.


  • Step 4 – Implement innovations that reduce fraud and abuse to the health care system.  49 Billion dollar saving if we can trim 20% off.


  • Step 5 – Medical Malpractice Reform.  We currently spend upwards to 200 Billion dollars a year on administrative, legal, legal settlements and practicing defensive medicine to avoid lawsuits.  Malpractice Reform that would trim 10% off this cost would save 20 Billion annually.


  • Step 6 – This is an easy one. If you don’t smoke you get a discount on your medical plan.  Give smokers yet another incentive to stop smoking in addition to living a longer healthier life.  According to the Medical Journal of Preventive Medicine about 170 billion dollars of our healthcare dollars are spent each year in the U.S. on smoking related illness.  5% reduction or 8.5 Billion dollar savings.


  • Step 7 – Implement 511 National health help line.  This National call center, created to help people in many ways from routine health questions to what to do in care of an emergency.  They would also help direct callers to the most cost-effective place for treatment in their area.  Cost increase to government but a net decrease in the overall cost of healthcare to American citizens.  Primary savings come from directing people away from Emergency room care into less expensive care.  If only results in saving 5% on Emergency room care the saving would be 3.5 Billion Dollars


  • Step 8 – Expand the role of the pharmacist in dispensing drugs….especially when it comes to maintenance meds. This would be a lot less expensive than having to visit a doctor every 60 days to get a new prescription.  300 million savings.


  • Step 9 – We need the development of more clinical testing of less expensive allopathic  products to determine if they are a good alternatives to traditional treatment of illnesses.  Since these will not be a financial gold mine for drug companies, it will need government-funded or foundation funded research.  This government seal of approval will stem the onslaught of negative publicity funded by the drug companies and their partners. We spend about 330 billion each year.  10% reduction would be 300 million.


  • Step 10 – The emergence of Hospice care has been one of the most positive and practical innovations to come out of healthcare over the past 30 years.  Still we need to keep expanding our conversation about how we want to leave this world.  How do we want to go out?  We now spend an exorbitant per capita amount of our healthcare dollars during the last six months of our lives.  We spend about 1.3 billion per year or about $30,000 per death.  However, for some the cost is almost nil while others spend hundreds of thousands of dollars.  One question we might want to ask ourselves is would we choose to spend this amount of money in the last six months if the money were coming out the pocket of our family?  Or we might ask is there a more affirming and dignified way to manage these last days.  We need to increase our viable options.   If we could just trim 5% of this number we would save 65 million a year.

The conservative cost savings of only these top 10 steps would save an estimated 591 Billion dollars or almost 17% reduction in costs.  I suspect the real savings would be higher.

That is all for now but please check out the next article the Fundamental Problem in the American Health Care System.


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