Despite the fact that the United States spends more of its gross domestic product on health care than do other countries, an estimated 16% of its population has no health insurance coverage. The author believes that a hybrid approach combining universal risk pools, required coverage with income-based subsidies, and a restructured payment system would be able to provide more equitable health care more efficiently. Medicare stands as the prototypical single-payer model, but only an approach that assures universality while minimizing political interference will succeed.
* Voluntary coverage must be expanded. There are sizable gaps in employment-related plans, especially for part-time and contract workers. The proportion of employees enrolling in existing plans has been decreasing. Subsidized employer contributions only rarely cover the full premium. A new coverage and payment system is needed that aggregates employer contributions across multiple workers and jobs.
* Health care programs that mandate coverage and allow a choice of plans are not sustainable without accurate risk assessment—a difficult task. Otherwise plans will attempt to enroll healthy individuals and avoid those who are ill. A single risk pool is needed to cover the high-cost items that cause voluntary models to fail. There probably is already enough money in the current insurance system providing it is more purposefully allocated.
* The risk pool must cover everyone who might require health care so as to eliminate adverse selection practices. For inpatient services the pool would build on the Medicare model for payments based on diagnosis-related groups. Clinicians and facilities would create care delivery teams to treat patients and allocate funds among themselves. Costs for ongoing treatment of chronic illness would be offset by periodic payments from the pool.
* With regard to ambulatory care, the risk pool would eliminate the need for employment-based group plans. Instead, payment intermediaries could be organized around the physician. Clinicians operating on a fee-for-service basis would provide most ambulatory care for minor acute and chronic illness. Patients would be responsible for premiums and co-payments, depending on the plan selected.
* The risk pool would cover costs for major acute and chronic care. The remaining expenditures could be paid for either with a debit card or by using a health plan. Ideally an expanded income-based subsidy resembling the earned income tax credit would combine with a requirement that each individual be able to pay for minor and preventive care.
If attention is focused on patient outcomes, clinicians and hospitals could explore ways of delivering care while eliminating the present emphasis on fee constraints and the micromanagement of clinical decisions. A simplified system would eliminate unneeded administrative costs. Market-disciplined carriers would facilitate payment, provide information, and attend to patient preferences. Finally, appropriate incentives would enable informed patient and clinician decision-making about the care needed to obtain high-quality outcomes.