The Ideal Health System

Key Words - patient ownership of health plans, consumer driven health care, private contracting, malpractice, shopping for health plans across state line, free market competition, independent physicians

Summary of interview with Donald Palmisano, MD, former AMA President and Founder of Intrepid Resource®

Preface: Donald Palmisano, MD, JD, is perhaps organized medicine’s most articulate spokesman, and one of the few who equally grasps medicine and legal issues He served as president of the American Medical Association in 2003-2004. Dr. Palmisano speaks often on malpractice’s hidden costs. He is Founder and President of Intrepid Resources ®, a risk management and patient safety company.

“Q: Doctor Palmisano, have we reached a watershed moment in American health care?”

“A: Yes, we have reached a critical moment, Government and third party intervention is disconnecting the patient from the physician and the decision making from the patient’s best interest. The ideal system is one where patients own their health insurance and makes decisions with the doctor as trusted advisor.”

“Q: What system do we have now?”

“A: We have third parties saying what treatment will be allowed. We have government taking away the right of private contracting between patients and physicians. With Medicare, doctors must accept what government pays because if you do a private contract the physician is removed from Medicare for two years. We are moving towards more government control, a system that will not lower costs, and one in which physicians are being paid less than the cost of delivering care. “

“Because a patient has a Medicare or Medicaid card does not mean that patient will find a physician in his or her hour of need. Fewer and fewer doctors accept Medicare or Medicaid patients because federal and state government pays less than the cost of delivering care. Price fixing has never worked, and it is not going to work in medicine.”

“I recommend expanding coverage through tax credits, consumer choice, market enhancement, low cost health savings accounts, individual ownership of insurance, extending subsidies to those who need financial help, the right to privately contract between patients and doctors, and purchasing insurance across state lines.”

“These free market principles would take care of the monopsony power of health insurers, what they allow patients to receive, and what they pay the doctor.”

“Q: Can independent doctors in small practices do anything to change the dynamics?”

‘A: Independent physicians represent 80% of practices. They have to be engaged in the political process by contacting their representatives in Congress and their two Senators and telling them how adversely this interference is effecting their practice. They should encourage their patients to do the same.”

“Otherwise folks in Washington will remain in their bubble. They don’t hear enough about what’s happening in the actual practice of medicine. They are just listening to talking heads and think tank wonks.”

“The public is being given bad information. When the President of the United States says a physician would amputate a leg to get $50,000 rather than treating the patient medically, he is getting bad information from advisors. When he says a doctor will do a tonsillectomy rather than treating a child for tonsillitis, it is not appropriate. We need to get the real fact and to identify what the problems are.”

“First, some health insurers ignore patients and physicians Their misplaced monopsony power allows them to dictate terms. We fix that by competition across state lines.”

“Second, we need to get insurance for people with pre-existing conditions. We can do that with voluntary purchasing cooperatives so people can get together in groups of 10,000 or more. Everybody can be accepted when they have the options of getting bids on large groups, just as in a large company like IBM.”

“Third, Why should people on Medicaid have less than ideal access to care? Convert Medicaid into a defined contribution. Give them the same advantages as people in the Federal Employee Health Benefits (FEHB) Program. Give them a voucher, and allow them to choose from an array of choices.”
“Government should not assume the American public is not smart enough to make their own decisions. We need more control given to patients, the same tax advantages for every American.”

“ With this government plan, we will end up with Medicaid-for-all, with long waiting lines, and no doctors to treat them. Physicians will do something else. They will limit their practice, or switch to concierge or cash practices and directly contract with patients.”

“They will get out of Medicare, Medicaid, and all insurance programs. That’s not good for anybody.”