The biggest drag on our economy is health care.  We are paying WAY too much for it, both as individuals and as countries.  Attempts to provide health care to everyone through government programs have bankrupted entire nations.  We need to radically reform how we deal with health care.  And neither Obamacare nor government run health care is the answer.

Most of what I have learned about health care comes from the exceptional book “Catastrophic Care” by David Goldhill (Vintage Books, 2013).  In this book, Mr. Goldhill, a New York Democrat, clearly describes both what is wrong with the health care system in the United States, and what could be done to fundamentally fix it.

Insurance is the basis of the American health care system.  The problem is that “insurance” works when a large number of people pay for a risk that few suffer.  Think of having a house fire.  We all insure for this, as losing hundreds of thousands of dollars suddenly would be a catastrophe, but how many people do you know who actually had a house fire.  Now think about health care.  How many people are going to get sick?  The answer is EVERYONE.

Most think that health insurance is a way to pay for health care with someone else’s money (the government’s, our employer’s, or others).  But it isn’t.  Because we all use it, we are all paying.  And paying a LOT.  In “Catastrophic Care”, Mr. Goldhill shows that an employee of his, who he expects will earn $3.85 Million over her working life, will spend $1.9 Million on health care.  That’s HALF of her earnings.  That’s what each of us is paying right now.  It is deductibles, plus insurance premiums, plus what the employer pays, and taxes (income and health taxes).  And just so you understand, what the employer pays would be our SALARY if they didn’t have to pay it – so make no mistake, it ALL comes out of our pockets.  We don’t get anything for “free”.

We pay so much because we are no longer the “customers” in health care.  We don’t pay the doctors or the hospitals, the insurance companies do.  And because of this, the system is set up to benefit not us, but the health care industry and the insurance companies.  Obamacare was written by Health Industry and Insurance lobbyists.  So that law benefits hospitals and insurance companies, while each of us pay more and more.

We have to take back both control and responsibility for our own Health Care spending.  Mr. Goldhill recommends a four part system:

1 – Mandatory Health Savings Accounts.  You are required to put so much into this every year.  You can only use it for health expenses.

2 – Catastrophic Health Insurance.  You must buy insurance (with a high deductible) for the health equivalent of house fires.  This covers the scary things that could happen, but rarely actually do.

3 – Health Loans that allow you to borrow against anticipated future deposits of your Health Savings Account.  This way if you (or your family) had health issues while younger, you can still access what you will eventually put into your account.

4 – Funding the Health Savings Accounts and Catastrophic Health Insurance for those without the necessary income.  We are doing more than this right now, as those at the bottom of the economy use expensive services like emergency rooms for their medical care.  So this would actually save over the current ways we subsidize healthcare for the poor.

“Catastrophic Care” even includes the road-map for a transition plan.  The outlined plan would move us from our current broken system, to one where individuals again have control (and responsibility) for their health care spending and choices.  An added bonus is that since it is our own money, if we don’t use it, we and our families get to keep what’s left over!

What to Do

The first meaningful step to taking action is getting educated on the problem.  So, I would highly recommend getting a copy of “Catastrophic Care” and reading it.

Next is to put pressure on elected representatives.  They need to do things for those they represent rather than the lobbyists and special interest groups that give them so much money.  We CANNOT have the rules about any industry written by the lobbyists from those industries.

Lastly, we need to recognize that we don’t get anything for free.  We all have to pay for our health care, in one way or another.  We need to take back this responsibility.  When we do, the health care system will become more responsive, improve the quality of its care, and become a LOT CHEAPER.