Health Care Reform: A Market-Based Proposal

Wed, Oct 21, 2009

Health Care

The following article is written by Doctor Barry Jacobs, a Medical Doctor and SBABG contributor from Texas. We’re thankful for Doctor Jacobs’ contributions to SBABG and invite you to review his proposal and provide your thoughts on his plan in the comments below.  As a practicing and experienced Reproductive Endocrinologist who has served in many capacities (full bio at end of article), Doctor Jacobs has a unique viewpoint on the current health care debate.  He has been actively working to educate policy makers on the proposals below.

The media is full of discussion of health reform proposals being considered in Washington.  So far, nothing I have heard addresses any of the stated problems.  I immodestly believe that, after years in many different capacities practicing medicine, and conferring with others of similar experience, I have a solution that will cover the overwhelming majority of the issues.  I think, even more importantly, the cost to the taxpayer would be minimal, if the entire package were to be adopted.  The price tag certainly would not be a trillion dollars.

I would like to begin with a hypothetical.  If I sold a card, on an annual contract, for $500 a month that allowed the holder to shop and buy almost anything for a $20 co-pay, it would be heavily used.  Next year, I would have to increase the cost of the card.  That is where our health care system is, today.  It is the Federal Government which caused our current problem when “managed care” was mandated in about 1984.

I propose:

Save money – increase the efficiency of health care utilization:

1. Have people pay for a percentage of whatever health care they consume, up to a predetermined maximum, when insurance will cover expenses at 100%.  Before “managed care”, patients were wise shoppers when purchasing medical tests or treatments.  Not now!

Save money – reduce the number of tests:

2. Tort reform is essential.  It works fairly well in Texas.  Texas caps awards on non-economic damages at $250 thousand.  Perhaps, the looser should also bear legal the expenses of the winner.  The necessity of practicing “defensive medicine” is expensive and inhibits good medical judgment.

Incentivize purchase of health insurance:

3. Give employees a tax credit for what they spend on health insurance premiums.  That way, the employee is revenue neutral and has insurance.  Also, the employee owns the policy and is not dependent on an employer.  Also, if younger healthy people have an incentive to join the risk pool, insurance companies have no great excuse to increase premiums because they are only insuring sick people.  If this were the law, who cares if an illegal alien has insurance.  He paid for it.

Provide portability:

4. Bar employers from buying health insurance, but give employers a tax deduction for whatever they give employees for the employee to purchase health insurance.  The employee needs to own the policy.  Portability is achieved.

Make health insurance premiums competitive:

5. Require health insurance carriers to publish an audited report as to what percent of the premium dollars are actually spent on health care.  Clinical audits are not health care.  Help purchasers see what they get for their money.  I am aware of one HSA policy that only spent 9% of the premium income on health care and still demanded a double digit increase in the premium payment the following year.

Make health insurance premiums competitive:

6. Allow sale of health insurance across state lines.  That will increase the risk pool for insurance companies, and make it more profitable to lower their premium rates.  In return, they must be required to pay a “clean claim” within 30 days, and not hold on to the payment for several months.  Penalties for not paying claims in a timely fashion should be significant.  In Texas, the insurance company which delays claim payment looses part or its entire “negotiated” discount from billed rate.  Physicians should not be forced to provide interest free loans to multi-million dollar companies.  Prompt pay works in Texas where a “clean claim” is defined by law.

Assure availability of health insurance coverage:

7. Prohibit denial of coverage on pre-existing conditions and cancellation of a policy for illness.  The larger risk pool will help decrease the risk of coverage.  

Provide for the few who still cannot afford health insurance premiums:

8. Provide Federal subsidy for free or part pay clinics for the indigent, and those who still do not have health insurance.  If someone makes enough money to buy insurance and does not, he/she pays more than someone who still cannot afford the premiums. Provide tax deductions or credits for hospitals, imaging centers and laboratories which donate facilities to provide care for the indigent.  We had a system similar to this before “managed care”.  Most hospitals were operated by local government, under terms of a bequest with charitable contributions, or faith based organizations.  Give the same inducements to pharmaceutical companies to provide medications.  They already provide samples of newer medications and have programs for those who cannot afford to pay for prescriptions

Provide for those who still cannot afford health insurance premiums:

9. Give physicians who volunteer time to work in the clinics described in item 8 a tax deduction or tax credit for their services.  The amount of the tax break should be the average billed rate for the service in the area being served.

Protect physician-patient relationship:

10. Remove third party intrusion into the physician-patient relationship.  Today, when people call to potentially schedule a new patient appointment, they do not ask about training or experience of the physician.  They do not ask about cost or fees.  They ask, “Is the doctor on my plan?”  If they do not have to pay more than a small co-pay, all that matters is the insurance coverage and not value of service rendered.  To repeat, patients need to be wise shoppers for health care, like everything else they buy.

Give volume buying power to reduce premium rates for individuals:

11. Allow membership stores like Costco and Sam’s Club to become outlets for health insurers.  Insurers should bid for the right to market to club members.  The result is expected to be rates for individuals in line with what large corporations currently pay for their employees, and attract more members to the stores.

In closing and summary, instead of using a stick to try to beat the American public into submission, use a carrot as inducement to do what is in the best interest of each and all of us.

Please share your thoughts and ideas in the comments below and please contact your elected representatives to express support for the proposals that you support.  They need to hear from us not just about what we oppose, but also what we support.

Dr. Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.

Sign up for our RSS feed and become a fan of our Facebook Page and we’ll keep you informed about what you can do to combat Big Government.

, ,

This post was written by:

- who has written 15 posts on Small Business Against Big Government.

Dr. Jacobs is a native Texan, who grew up in Beaumont, 90 miles east of Houston. After graduating from the local college and he attended the University of Texas Medical Branch at Galveston, where he received his degree as a doctor of medicine. He then spent a year in Los Angeles as a surgery intern and returned to Texas to receive specialty training in obstetrics and gynecology. His OB-GYN residency training program was interrupted when he was called to serve his country during the Viet Nam war. While stationed at a pilot training base outside of Lubbock, Texas, he saw several patients each month who complained they were having difficulty becoming pregnant. Recognizing his own poor knowledge in the area of infertility, he assumed he would gain that education when he completed his OB-GYN training. He was mistaken. At the conclusion of his OB-GYN residency, he knew no more about helping infertile couples than he did while in the Air Force. Being dissatisfied with his inadequate abilities in the realm of infertility, he spent 2 more years in a fellowship studying nothing except Reproductive Endocrinology and Infertility. One year of the fellowship was devoted to basic research of ovarian physiology, during which time, he and his mentor and collaborator were able to make a small but landmark contribution to the scientific and medical literature. After completing his formal training, Dr. Jacobs has spent a number of years both as faculty at various medical schools and in private practice. Even in private practice, he remains an educator. Instead of teaching medical students and OB-GYN residents, he educates his patients as to their problems and treatment options. As part of his efforts to teach others what he knows, he has made his web page,, as informative as he can. He derives a great deal of pleasure working with couples and trying to help them. New information and understanding of human reproduction is progressing rapidly. For that reason, Dr. Jacobs devotes a large amount of time reading the current medical literature and participating in continuing medical education seminars. His desire is to provide the best quality care for infertile patients, while trying to make them feel comfortable with the difficult and stressful processes they must endure in their efforts to become parents. In addition to his clinical responsibilities, Dr. Jacobs currently serves as chairman of the IVF Committee at Baylor Medical Center in Carrollton, Texas.

18 Responses to “Health Care Reform: A Market-Based Proposal”

  1. Joy Laydbak Says:

    How do we back this and get it made policy?

  2. Andrew Vickers Says:

    Yes, yes, yes, yes, yes, yes, maybe, yes, yes, yes, yes! I have to think a bit more about point 7, but I am 100% in agreement on all other points.

    SBABG – Can this be sent to the WH and can we mobilise your readership to get this in front of all senators and representatives? I’m writing to mine today.

    • Barry Jacobs, M. D. Says:

      I truly believe all that I have submitted, and believe the American public would be far better served by the package I have suggested than anything I have heard, so far. If anything reasonable and legal can be done to enact these changes, I am for it. Whatever we do must be consistant with both the verbiage and spirit of our Constitution. We have strayed too far from it and are in trouble as a result.

  3. Kevin @ The Liberty Handbook Says:

    This is a great plan, but it has one major flaw.

    Because it doesn’t expand the role of federal government, it will never be passed by the current administration. They are only looking for solutions that expand federal power and control.

    So, thanks for the effort, but nobody with the power to pass it wants to hear it.

  4. Andrew Vickers Says:

    A suggested letter:

    Dear Senator/Congressman/Mr. President

    President Obama/You has/have often said that he/you will consider any and all reasonable suggestions on the topic of healthcare reform.

    There are many reasons that America needs healthcare reform. Amoung other reasons; we need to provide better healthcare coverage for the poorest among us. We need to provide better healthcare coverage for the sickest among us. We need to control the spiraling cost of health insurance and we need to do all of this without adding to the already astronomical national debt.

    I respectfully suggest that the legislation currently being debated by Congress is unacceptable to the majority of residents/citizens because it does not solve the real problem in today’s healthcare system. The real problem is the spiraling cost of healthcare itself. Insurance companies are not the problem. Illegal aliens are not the problem. Drug companies are not the problem. The real problem will not be solved by a public insurance option or by taxing high-end insurance policies. The real problem will not be solved by fining people that do not by insurance. We will not solve the real problem by treating the it’s symptoms or by forcing people to act against their wishes.

    The only way to solve the real problem is to give individuals the incentive to make informed choices about their healthcare.

    Doctor Barry Jacobs, a Reproductive Endocrinologist from Texas recently suggested the following plan for solving the real issues in healthcare: This plan directly addresses the cause of rising costs by eliminating the most dominant barriers to the free market in today’s system.

    I believe that Dr. Jacob’s plan will reduce the cost of healthcare across the entire population. It puts the power to choose in the hands of the people receiving treatment. Dr. Jacob’s plan addresses the needs of those unable to help themselves. It addresses the needs of people with pre-existing conditions and it forbids rescission. It provides for humane treatment of illegal aliens. It helps Doctors to receive payment for services and it also encourages Doctors to volunteer their services to help those in need.

    Dr. Jacob’s plan is a non-partisan approach which solves the real problems in American healthcare. I urge you to work with (all other members of) Congress to replace the current bill with one based on Dr. Jacob’s suggestions. I believe that most Americans would support such a plan.

    Yours truly,

  5. Zach Says:

    i whole heartedly support all the above points. however, like the previous comment states, the Obama administration will not support anything like this, because it does not give them MORE CONTROL.
    If we can somehow beat back the Socialist plans that are being pushed through congress now, i believe the next administration, which i pray is much less liberal than the current one, would support something like this. more government is not a good thing for anyone.

  6. cousin milty Says:

    Plus there are no death panels or internment camps so you know Ochavez won’t want to do it. He just wants to give healthcare to poor people and the elderly. Socialist. If my maid gets sick I don’t want her going to a doctor! Jeez, healthcare should only be for us rich white people! I want my country back! You know, the one where black people have sit in the back of the bus and where I can legally beat my wife!

  7. Barry Jacobs, M. D. Says:

    OK, Andrew, I have identified your letter, now. Thank you. Of couse I support all that you wrote. Even though I have no allusions that it will come to be, I think it will truly benefit the American people. Whatever anyone can do to promote productive and reasonable ideas is desperately needed.

  8. Cori Dyson Burdine Says:

    In response to Healthcare Reform: a market based approach by Barry Jacobs. this is real healthcare reform. This is fixing the problems without giving our healthcare to the government. Since the government has done so well with taking care of our Veterans, medicare, and medicaid we should by ALL means give them control of ALL our health!

    What we need is consumers of healthcare becoming responsible for their own healthcare insurance and medical care. I like the idea of the patient (i.e. consumer) owning their own policy. I like very much how the relationship between patient and doctor is restored!

    Share on Facebook, twitter, and write to your congressmen and women. Send this to the president. Get all your friends and family to do the same. We can try to start a real conversation!

  9. Barry Jacobs, M. D. Says:

    I thank you all for your kind comments. I have tried to devise a plan to help the maximum number of Americans, while hurting the fewest. It is not perfect. We must remember that there can be no real freedom without a great deal of personal responsibility. Our society seems to have lost soght of that truth.

  10. Jared Says:

    I am not sure that this is really “market based”, and although there are some good points here I think that points one, four, five, seven,and eight would in fact expand the role of the federal government. When examined I think that some of these points would involve some pretty bureaucratic social engineering.

    The best idea here is definitely point number six which I wholeheartedly agree with. Removing the barrier of state lines for insurance companies would allow the market to function more efficiently and provide more care for less money to the public.

    I am not sure that the tort reform in point number two would really change things all that much.

    The portability point is also a good one, but it is not necessary to bar anything to achieve it. Big government has created regulations that require employers to provide Health insurance to all of their employees if they provide it to any of them. If this and other related regulations are repealed we will see people start buying their insurance directly from a competitive marketplace. People don’t buy their car insurance through their employer’s so their is no reason that we need to buy health insurance through our employer. Another important factor here is that the government stop trying to regulate people’s salaries. You can see in the news that the current administration is going on a crusade against “executive compensation”. This will force companies to use other “perks” in order to attract talent, which can include health benefits.

    Thanks for posting your idea’s. I think that they need some refining, but they are appreciated.

  11. Richard Foster Says:

    I love the proposal but when I hear talk about “providing healthcare to the poor in the country” and I just want to roll my eyes! Even the poorest in our country receive healthcare, whether they can pay for it, or not! Whatever horror stories that are presented, the fact remains that the hospitals are legally required to provide services, AND THEN seek payment! They do not seek payment and then provide services. They do not you are poor until the health care services are done

    However, I would like to make sure that the poor get coverage, too! But, I do not think that anyone in this country can be considered poor in relationship to the poor in the rest one the world! What makes us so self centered to talk about raising the health care coverage from 91 to 95% without talking about raising the health care services to the poor in Africa from 15 to 18%? This is exactly the same as Marie Antoinette telling the peasants to eat cake when there was no bread!

    I recognize that we do not have the money but I suggest to the compassionate liberals, instead of talking about spending a couple trillion dollars on making the greatest health care system in the world better or cheaper or more inclusive, how about getting outside of ourselves and spending that money on the people of the world! In my book, their little babies are just as important as ours!


  1. […] use a car­rot as induce­ment to do what is in the best inter­est of each and all of us. (Health Care Reform: A Market-Based Pro­posal). Share and […]