Overhauling America’s Healthcare Machine – A Review

DrRich | February 15th, 2011 - 6:08 am

Some might wonder why America needs a new book on fixing our healthcare system, now that the the Patient Protection and Affordable Care Act (i.e., Obamacare) has already done that for us. Well, there are several reasons, so take your pick:

1) Obamacare might be repealed.
2) Obamacare might be found unconstitutional.
3) If Obamacare is permitted to proceed into its full glory, it shouldn’t be long before it leads to social upheaval either by: a) exploding the federal deficit far beyond even what we’re seeing today; or b) alarming a critical mass of Americans regarding the new, oppressive powers which the new law grants to the federal government.

If 1 or 2, the process by which our nation will re-address healthcare reform may look much like the contentious, but deliberative, processes we have used in the past to reform certain aspects of our society. If 3, the process may look a lot more like Egypt.

In any case I think there is a reasonable chance that, in the next few years, we may be looking for a completely new way to reform our healthcare system, one that resembles neither Obamcare, nor the alternate and rather tepid “solutions” that have been proposed by the Republican leadership.

When that day comes, you will be very glad you took the time to read Douglas Perednia’s new book, Overhauling America’s Healthcare Machine – Stop the Bleeding and Save Trillions.

Perednia, something of a polymath, is an internal medicine specialist as well as a dermatologist, an NIH researcher, a writer, and an expert in telemedicine and medical informatics (he is a professor of this latter discipline). While he has founded and directed non-profit organizations, he is also an entrepreneur (which explains how he has become “New Zealand’s sole domestic source of boiler cleaner and glue for beer bottle labels”). He admits also to being a tap dancer (not that there’s anything wrong with that). And, as anyone will know who reads his excellent blog, Road To Hellth, he also knows a lot about the healthcare system.

Perednia’s book is a true tour de force – but don’t let that frighten you away. The author’s writing style is clear and conversational, easy to follow and entertaining to read.

In this style, he tells you everything.

Perednia does not pretend that American healthcare isn’t in dire need of the very kind of fundamental change that President Obama says he wants, nor does he pretend that a little insurance reform will do the trick. The healthcare system, he suggests, is on its last legs. It is a machine that is wearing out and bogging down, and it needs to be completely overhauled.

The healthcare machine is far more complex than it ought or needs to be. It is burdened by all manner of extraneous flywheels, gears, and gewgaws that were glommed on during its long history to please one long-forgotten constituency or another, that do nothing useful, but that consume a lot of fuel and deposit a lot of grime. The healthcare machine’s great creaking clockwork grinds away against all this unnecessary friction and accumulated grunge, and for all its strenuous efforts produces an ever-smaller amount of useful work. What this machine needs is more than some bright new attachments and smarter operators to oversee its churnings. It needs to be torn down and rebuilt.

Perednia does not pull his punches. He starts by showing that the American healthcare system, when its output is analyzed objectively and soberly, does not produce nearly as much good as its present apologists suggest. It certainly does not produce very much good in relation to all the money we spend on it. He then moves on to analyze the roles all the big players have within the healthcare system in producing all this waste. He amply demonstrates how the doctors, the hospitals, the insurers, the government (and, yes, the patients), behaving in a manner that is entirely consistent with the incentives the system has provided for them, with no especial evil in their hearts, and with no more than the natural, baseline amount of greed and self-interest that accompanies any human enterprise, operate in a grotesque ballet of waste and excess. He shows how the healthcare machine has reached the point where it simply cannot go much further, and that, like it or not, we’re going to have to do something about it. (Along the way, Perednia clearly demonstrates how Obamacare, far from representing any kind of fundamental departure, simply exaggerates the pathology.)

The strongest part of this book, however, deals with how to fix all this. Perednia begins by establishing what almost anyone would agree ought to be the goals of the American healthcare system – it must deliver effective and efficient healthcare services in a manner whose fairness to all Americans is commensurate with the contributions all American make to it, and it must be financially sustainable – at least to the point that its cost does not drive us to societal collapse. He then outlines a scheme that can achieve these goals.

I would be less than forthcoming if I did not mention that the broad outline of Perednia’s solution, as he graciously acknowledges, derives from my own book. That outline looks like this:

He proposes a 3-tiered healthcare system. The bottom tier, Tier 1, consists of self-pay healthcare. All individuals would be expected to pay a certain amount each year toward their own healthcare, say $2000 per individual, or $4000 per family. The funds for Tier 1 could reside in a Health Savings Account, which the individual would own. People with low incomes would have HSAs funded by the government. But everyone has the opportunity to own an HSA, and everyone controls the first $2000 of spending on their own healthcare (and keeps what money is not spent).

Once the individual exhausts their annual $2000 limit, their healthcare would default to a publicly-funded Universal Health Insurance Plan (Tier 2). The universal health plan – which would cover every American, even members of Congress – would operate under a system of open healthcare rationing, for the purpose of keeping public spending on healthcare on a reasonable budget. Perednia spells out the details on how such open rationing could be accomplished. Obviously, establishing any system for openly rationing healthcare would be a very difficult and exceedingly painful process. It seems very likely that only after experiencing great gouts of pain from our current healthcare system could we Americans be enticed to tackle such a thing. But Perednia (and I) postulate that such a circumstance may become manifest in the very foreseeable future.

Tier 3 is a completely voluntary, self-funded insurance product. Here, the health insurance industry would offer various levels of additional health insurance to people who want it, which will pay for services not covered under the open rationing in Tier 2. Health insurance in Tier 3 would begin to look like an actual insurance product (i.e., one that protects individuals against unforeseen, potentially catastrophic expenses), instead of the soup-to-nuts coverage of everyone’s heart’s desire that now passes for health “insurance.”

Again, this is just an outline. While my book did not take it much farther than this, Perednia takes his solution to the healthcare problem several steps beyond, and provides a very comprehensive plan. He discusses specifics of insurance reform, physician reimbursement, paying for goods and services, physician credentialing, government regulation, malpractice reform, addressing fraud and abuse, implementing electronic medical records that actually help efficient patient care (a particularly strong section of the book), and assuring that innovations in healthcare are encouraged. If you really want to know how to fix American healthcare, it’s all here.

Once Omamacare is repealed or declared unconstitutional, or once it goes forward in tact to accelerate the final implosion of our already-near-terminal healthcare system, smart people will find themselves looking for new ideas upon which to re-build American healthcare. Amidst all the cacophony about healthcare reform, however, there are really only very a few voices that are offering truly novel solutions. Doug Perednia has thrust himself to the front of that short list of visionaries with Overhauling America’s Healthcare Machine.

Please read this book, so that when the time comes you can tell your Congressperson (or perhaps by that point, your local Commissar) about it.


Overhauling America’s Healthcare Machine is available in all bookstores, and at Amazon.

One Response to “Overhauling America’s Healthcare Machine – A Review”

  1. Neo Doc says:

    This is the Singapore health care system, if I am not mistaken.

    This is similar to the plan I sent to Hillary (and similar to one she proposed) during her run for president.

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