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No-Billing Med Plan

Reasonable medical care for all North Dakotans

An affordable plan that could cover everyone and still control costs 

      Anyone who has been sick or injured or had someone close to them suffer an injury or illness in the past 10 years, whether or not covered by some form of insurance, is well aware of the expensive, unresponsive and unreasonable nature of our present health care delivery system. North Dakota is no exception. If you have read the itemized bill from a hospital, doctor, or clinic, you have doubtlessly been outraged and flabbergasted by items such as $10 for two Tylenol pills, $25 for disposable tissues, $900 for a 40 minute surgical procedure (plus a separate bill for $360 from the anesthesiologist), $350 for a day in hospital, $90 for i.v. fluid (sugar/salt water)...

     These costs are certainly outrageous, but the hospitals/ clinics/ doctors, even the honest ones, are compelled to charge them because of the way the present system is set up. Costs can be controlled only if the system is changed, and to do this, we must first understand the problem

Analysis of the problem

The high cost of medical care in the US is the result of a combination of many interacting factors, including but not limited to: federal and state regulations interfering with the doctor patient relationship; the high cost of malpractice insurance due to the laws that allow jury trials and unlimited awards for malpractice claims, most of which are settled out of court; inflation; the high cost of a medical education; the extensive large-scale abuse or fraudulent use of medicare/medicaid, insurance fraud, unnecessary tests and medical procedures, the high administrative costs for billing and compliance with regulations, etc. and above all, billing itself, the attempt to cover operating costs by assigning a value to the services provided and billing the insurers, the government, or the patients themselves for amounts far in excess (to the tune of several hundred per cent) of the real value or cost.

The main villain is the billin', and no plan that allows billing in any form can successfully contain costs.

Other factors may also come to mind, but these in my view are the most important. I do not believe all doctors are greedy exploiters seeking to profit from the misery of others (although that is actually what they do). Rather they for the most part wish to serve suffering humanity while receiving compensation commensurate with the sacrifices they have made to become doctors. It is the present system which makes them appear to be vultures.

The experience of Germany suggests that socialized medicine could work --if the conditions here were the same as there (they are not) --but the failure of such a system in England and Canada, not to mention the abominable system of the former Soviet Union should make us extremely cautious about adopting such a system, especially a federal one.

My proposal would, it is hoped, eliminate the sources of abuse and extra costs and would still provide 100% coverage of all North Dakotans.

I believe the answer lies in requiring all hospitals/clinics who wish to participate in the program (that is, to receive funding from Blue Cross of North Dakota, which would be the only insurer and would be responsible to a state authority) to constitute themselves as [private] HMOs (I am not referring to HMOs as presently understood as ghastly profit driven medical factories which seek to cut costs at the risk of denying adequate treatment by synthetic-drug oriented physicians who treat symptoms instead of causes, but rather to the old idea of maintaining health by preventive examinations and recommendations and treatment of the sick while the well pay)

HMOs (health maintenance organizations) differ from hospitals and clinics operated in the usual way in that they are aimed at preventing illness and/or catching it at an early (and less costly to cure) stage. There is no incentive to postpone seeing the doctor until the condition worsens because the cost is the same regardless. The HMO charges all members a fixed monthly fee, usually paid to Blue Cross or other insurance company, based on the estimated per-patient operating costs of the system, and are remunerated by the insurer at a fixed rate per month regardless of how much or how little was spent on care during said month. There is therefore a great incentive toward efficiency. There are also few if any additional costs because the employees of the HMO (including doctors) work for salaries, not fees, and outside services that the HMO cannot provide itself are contracted for at a fixed annual rate, again regardless of the degree of usage of said services.

The main difference between HMOs and the commonly practiced forms of medical care is philosophical. Regular doctors/hospitals /clinics/insurers aim to provide services to the sick and make a profit (at least not to lose money) in so doing from the sick or their insurance company. Insurers gamble that the premiums they collect will exceed their payments to the health care deliverers (and if they do not, rates are raised and coverage is narrowed). The people try to make minimal use of the available facilities in order to minimize costs (deductibles) and keep premiums low until the illness becomes serious and costly to treat due to neglect. Tort lawyers lurk on the periphery ready to sue if a patient is not totally satisfied with the outcome of a treatment. Doctors/ hospitals are compelled to carry malpractice insurance and to leave no stone unturned to avoid such suits, including costly unnecessary diagnostic procedures and laboratory tests. The result is the present mess in which no one is satisfied except the tort lawyers and insurance companies. We have the best (technically) health care system in the world but we can't afford it; we have a choice of paying exorbitant insurance premiums or going bankrupt if we get sick. It is patently unfair that the sicker we are the more it costs us and the less choice we have (in our desperation) of forms of treatment. It often winds up a as a choice between death/disability and bankruptcy/heavy debt.

The philosophy of HMOs, on the other hand, is that the well should pay and the sick should be treated as early as possible. They profit from keeping people well, hence their emphasis on preventive care and early detection. And when a member gets sick all the care he needs is provided until he is well again. The HMO receives a fixed amount monthly for its operating budget, and all it has to do to maintain a profit is control costs.

Once the HMOs are constituted, all residents could be assigned to the HMO nearest their home (the HMO's in the cities could possibly operate small feeder clinics in the small towns/rural areas). Once an estimate of the costs of operating each HMO and the number of persons in its catchment area are known, the average monthly premium can be computed, and at the present time it would probably run less than $40 per person per month.

The premium would be covered as follows:

Social Security retirees: bill Medicare for the premium

Persons on welfare: bill the medicaid system at the rate of $40/mo per person or have the State Blue Cross do so (alternatively, deduct up to 7% of the total TANF entitlement to the family involved, make up the difference by billing medicaid).

IHS (Indian health service) clients: bill Federal Government

Unemployed, indigents, migrant laborers: state funding of insurance premiums

Working poor: deduct 7% of income to pay on premium, make up difference by state funds.

Working non-poor: deduct 7% of income up to full premium for all dependents per month

for example: a man and wife with 4 children earning a total of 1000 per month would pay $70 per month, the state would pay $140.

If they were making 3000 or more per month, they would pay $210, the state nothing.

Drug Addicts: enable persons addicted to opioid-containing pain medication to obtain the amount if the needed gratis from their local clinic, either by injection or as a pill taken in the dispenser's presence. This would prevent the now rampant abuses of doctor shopping and illegal activities by these victims of bad medical practice, making it possible for them to continue working without fearing withdrawal symptoms. At the same time they could be offered treatment to get rid of the addiction if and when they are willing to accept it. Medical hemp (aka marijuana) should also be legalized and dispensed by the system gratis.

Self-employed: pay full premium or up to 7% of income, whichever is less.

Wealthy: pay full premium as members of system or remain under private care at their own expense

In other words, no doctor, hospital, or clinic could bill Medicare, Medicaid, or Blue Cross, there would be no further possibility of fraudulent billing, padded billing or excess billing which now drives up the cost of government-sponsored medical care and insurance premiums, and there would no longer be a motive for such billing created by the need to assure a cash flow for operating expenses which plagues nearly every medical facilty

The premiums could be paid automatically to state Blue Cross which would make monthly payments to the HMO to pay its expenses.

Of course, this system cannot work if malpractice insurance remains so high. It is therefore urgently necessary to take all malpractice claims out of the hands of the courts and submit them to a state constituted board of examiners to decide the merits of the claims, the degree of fault if any, and the value of the loss, if any. No doctor will have to carry malpractice insurance for work done in the HMO. The rules will be such that, e.g., if he is found to have actually been truly negligent, he will be notified and fined a nominal amount the first time. If two or more such incidents occur within a stipulated period, he may have his license temporarily or permanently suspended or be required to take remedial training. If a true case of malpractice is found by the board of examiners, the injured party will be compensated out of a state malpractice fund, again on the basis of the degree of fault and the actual monetary value of the loss, nothing for "pain and suffering" which are part of the human condition. At the same time frivolous lawsuits (those undertaken expressly to scare the defendant into an out-of-court settlement to avoid legal expenses which would be higher than the settlement itself) must be harshly dealt with, including disbarment of attorneys who knowingly undertake them.

This system will save money in numerous ways;

1. The Insurer will save in knowing exactly how much will come in and go out each month and year based on population statistics and in not having to maintain a large clerical work force to scrutinize billing and fee schedules. There will be no billing, no doctor fees, all doctors working for the HMO will draw a salary.

2. The HMO (medical group/clinic/hospital combination) will not have to bill patients or assess costs of supplies and procedures and doctors' fees. It will be free of the majority of accounting costs and costs of compliance (with insurance regulations), also of losses due to failure to pay and collection costs for delinquent medical bills.

3. The people (members) will report for care and treatment as soon a sickness arises, thus encouraging prevention and early treatment without fearing a catastrophic medical bill, thus actually in many cases reducing the time and costs of treatment. The clinics will be required to remain open 24/7 to treat walk in patients who would otherwise have to seek costly emergency room care.

4. The doctor will be assured of an income acceptable to him without fearing a lawsuit or paying exorbitant insurance premiums, freeing him to practice medicine as an art, not a gamble.

To those who object that the patient cannot choose his doctor, I would respond that nothing would prevent the member doctors of an HMO from having private patients who choose not to be under the system or would keep doctors in private practice from joining the local HMO and bringing their patients "in" with them. As a member he would then receive a salary instead of charging his patients fees, but little else would change. The other main objection, that hypochondriacs, psychosomatics and Münchhausens would abuse and overload the system could be resolved easily by having such persons, once identified, receive psychiatric counseling, again within the HMO context. The one legitimate objection that may be raised is that the HMO will be reluctant or hesitant to provide adequate care in some cases in order to make the bottom line look better. This problem can be dealt with by assuring that additional legitimate expenses of an HMO will be covered once their necessity is documented, by having an inspector general/independent auditor periodically review the records of the HMO and interview a cross section of patients. The profit level of the HMO could be pegged at, say, 6 or 7%, with profits above this level mandatorily reinvested in improvement of the facilities.

Chiropractors, osteopaths, acupuncturists, homeopaths, and holistic healers could either be associated with the HMO or have a contract with it for services and be paid at a fixed annual rate or on a patient-treated basis. This will require them and their idiopath colleagues to learn to cooperate for the good of their patients. Likewise, laboratories, anesthetists, and other specialists not associated with the HMO would enter a contract with the HMO for their services at a fixed rate, the key point being that no one may bill the HMO: all services will be on contract.

One can easily calculate that for an HMO organized from one hospital and, say, three walk-in clinics, employing 20 doctors of various specialties, plus nurses, nursing assistants, maintenance personnel, and clerical personal totalling 200 persons, with a catchment area of 20,000 people, the monthly payments of premiums to Blue Cross would be $700,000, amounting to $8,400,000 per year. Assuming the doctors were paid 75M per year (very reasonable if he has no malpractice premiums to pay and employs no nurses/secretaries), the total salaries for doctors would be $3,00,000 per year, and perhaps $2,500,000 total for other personnel. This would leave somewhere in the neighborhood of 3,500,000 to cover operating expenses of the hospital and clinics,including services contracted for. Since this is a hypothetical case, it would be pointless to break it down further, but it would seem, at first glance, that this should be enough.

I estimate that the cost of providing medical care would be cut by 75% (to one fourth of its present level) by enacting this plan, and it would provide 100% coverage for the residents of the state.

Incidentally, this plan as outlined above is not my idea nor even original. It is essentially similar to the plan proposed by the President of Harvard Medical School in a recent Phi Beta Kappa Newsletter with the one important distinction that it insists that each state devise its own plan, while the gentleman cited above calls for a federal (nation-wide) HMO plan. Federal involvement would double the cost of the plan and impose yet another layer of bureacracy and regulations. The only federal involvement should be to pay the premiums of those whose medical bills the Fed.Govt. would otherwise be obligated to pay by law. If the federal government really wants to save money, this would cut its expenses by 90% (my estimate). Assuming the state has 100,000 people "entitled" to federally paid medical care (AFDC, Social Security pensioners) and pays 600 per year in premiums for each, the total annual bill to the federal government would be 60 million. If one tenth of this number presently receives care in a given year the government is billed something like 1.5 billion.

One final note: AIDS should specifically not be covered by this system. There should be mandatory screening of all members at the time they join an HMO and those found HIV positive should be quarantined by law or even isolated in a sanatorium until they die or are cured as a result of future research. If the number of AIDS victims, now approaching 10,000,000, were to double, care for them would bankrupt not only the system described here but the entire country as well. AIDS is an epidemic which the government, cowering to the Gay lobby, has failed to name as such. This situation should be rectified and the truth about AIDS told: it is a highly infectious disease spread not only by sexual contact and intravenous needles but also by sneezing, kissing, hand contact, even mosquito bites and toilet seats, and there is no such thing as safe sex (outside of monogamous marriage).

If we are to adopt such a system, the state legislature must enact and the governor sign the following:

1. Make Blue Cross of North Dakota the only health insurer and assign it the responsibility of paying operating costs of participating HMOs. Prohibit any form of billing for medical services.

2. Notify all members of the health care industry that future Blue Cross payments will be made only to HMOs after the cut-off date and give all hospitals, medical groups, doctors, clinics, a term of, say, six months to reorganize as HMOs and calculate their total monthly operating costs.

3. Establish a medical malpractice board and define conditions for filing a claim and punitive measures. Make malpractice lawsuits against HMOs unlawful (prohibit courts from hearing any such suits).

4. Enact legislation for deducting premiums from paychecks of wage-earners. Register all residents of each state and assign them to the HMO most convenient for them (allowing freedom of choice).

5. Negotiate with Federal Dept. of HHS to pay premiums of Medicare and Medicaid recipients rather than their bills.

This system may be called, for lack of a better name, the

NO BILLING H.M.O. SYSTEM to distinguish it from other proposals now being considered by the various state governments and the Federal government. If you feel it should be adopted, please distribute copies and contact your state legislators.

A.M.Hegland  if you wish to contact me for any reason my e-mail is maddsci@stellarnet.com


Although this proposal was written for North Dakota, a state with a small population, and the
dollar figures in the text will have to be adjusted up for inflation over the past 10 years (the proposal was first written in 1995), with certain modifications it could also be adopted by other states or even by counties and municipalities.

If you feel that this plan would work (with state specific modifications) in your state, I recommend that you contact your state's Governor and legislature, either referring them to this website or by printing it out and sending it to them.  Create a petition drive, organize township meetings, and otherwise create support for legislation to enact such a plan.
How to contact ND state legislators
District Senator/Representative
Senator Stanley W. Lyson (R)
Representative Mike Norland (R)
Representative Earl Rennerfeldt (R)
Senator John M. Andrist (R)
Representative Bob Skarphol (R)
Representative Dorvan Solberg
Senator Randy A. Schobinger (R)
Representative Kari Conrad (D)
Representative Andrew G. Maragos (R)
Senator John M. Warner (D)
Representative Dawn Charging (R)
Representative Kenton Onstad (D)
Senator Tom Seymour (D)
Representative Elwood Thorpe (D)
Representative Mike Timm (R) 
Senator David O'Connell (D)
Representative Glen Froseth (R)
Representative Bob Hunskor (D)
Senator Ryan M. Taylor (D)
Representative Jon O. Nelson (R)
Representative Arlo E. Schmidt (D) 
Senator Layton W. Freborg (R)
Representative Jeff Delzer (R)
Representative Dwight Wrangham (R)
Senator Dennis Bercier (D)
Representative Tracy Boe (D)
Representative Merle Boucher (D) 
Senator Tom Trenbeath (R)
Representative Chuck Damschen (R)
Representative David Monson (R)
Senator Tim Mathern (D)
Representative Mary Ekstrom (D)
Representative Scot Kelsh (D) 
Senator Dave Nething (R)
Representative Lyle Hanson (D)
Representative Joe Kroeber (D)
Senator Judy Lee (R)
Representative Kim Koppelman (R)
Representative Alon Wieland (R) 
Senator Jerry Klein (R)
Representative Duane DeKrey (R)
Representative Robin Weisz (R)
Senator John T. Traynor (R)
Representative Dennis Johnson (R)
Representative Eugene Nicholas (R) 
Senator Harvey Tallackson (D)
Representative Gil Herbel (R)
Representative Joyce Kingsbury (R)
Senator Ray Holmberg (R)
Representative Louise Potter (D)
Representative Ken Svedjan (R)
Senator Constance Triplett (D)
Representative Eliot Glassheim (D)
Represenative Mark S. Owens (R)
Senator Duane Mutch (R)
Representative Thomas Brusegaard (R)
Representative Gerald Uglem (R) 
Senator Elroy N. Lindaas (D)
Representative Ole Aarsvold (D)
Representative Lee Kaldor (D)
Senator Carolyn Nelson (D)
Representative Sally M. Sandvig (D)
Representative Steven L. Zaiser (D) 
Senator Gary A. Lee (R)
Representative Wesley R. Belter (R)
Representative Vonnie Pietsch (R)
Senator Michael A. Every (D)
Representative William R. Devlin (R)
Representative Don Vigesaa (R)
Senator Larry J. Robinson (D)
Representative Ralph Metcalf (D)
Representative Philip Mueller (D)
Senator Russell T. Thane (R)
Representative John Wall (R)
Representative Clark Williams (D)
Senator Joel C. Heitkamp (D)
Representative Bill Amerman (D)
Representative Pam Gulleson (D)
Senator Richard L. Brown (R)
Representative Randy Boehning (R)
Representative Ronald A. Iverson (R) 
Senator Robert S. Erbele (R)
Representative Michael D. Brandenburg (R)
Representative William E. Kretschmar (R)
Senator April Fairfield (D)
Representative Craig Headland (R)
Representative Chet Pollert (R) 
Senator Bob Stenehjem (R)
Representative Ron Carlisle (R)
Representative Dave Weiler (R)
Senator Aaron Krauter (D)
Representative Rod Froelich (D)
Representative James Kerzman (D) 
Senator Dick Dever (R)
Representative Mark A. Dosch (R)
Representative Lisa Meier (R)
Senator Randel Christmann (R)
Representative Pat Galvin (R)
Representative Gary Kreidt (R) 
Senator Dwight Cook (R)
Representative RaeAnn G. Kelsch (R)
Representative Todd Porter (R)
Senator Ed Kringstad (R)
Representative Bob Martinson (R)
Representative Margaret Sitte (R) 
Senator Herb Urlacher (R)
Representative C. B. Haas (R)
Representative Shirley Meyer (D)
Senator Rich Wardner (R)
Representative Nancy Johnson (R)
Representative Francis J. Wald (R) 
Senator Ben Tollefson (R)
Representative Larry Bellew (R)
Representative Dan J. Ruby (R)
Senator Bill L. Bowman (R)
Representative David Drovdal (R)
Representative Keith Kempenich (R) 
Senator Karen K. Krebsbach (R)
Representative Matthew M. Klein (R)
Representative Clara Sue Price (R)
Senator Tony Grindberg (R)
Representative Al Carlson (R)
Representative Bette B. Grande (R) 
Senator Nicholas P. Hacker (R)
Representative Donald D. Dietrich (R)
Representative Stacey Horter (R)
Senator Duaine C. Espegard (R)
Representative Lois Delmore (D)
Representative Darrell D. Nottestad (R) 
Senator Tim Flakoll (R)
Representative Donald L. Clark (R)
Representative Blair Thoreson (R)
Senator John O. Syverson (R)
Representative Rick Berg (R)
Representative LeRoy G. Bernstein (R) 
Senator Tom Fischer (R)
Representative Kathy Hawken (R)
Representative Jim Kasper (R)
Senator Ralph L. Kilzer (R)
Representative George Keiser (R)
Representative Lawrence R. Klemin (R) 

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