(Balanced Choice was created by Div 42 Board Member Ivan Miller. It is a serious attempt to completely overhaul the broken US healthcare system. We encourage you to consider it thoroughly. Eds.)

Balanced Choice believes that health care reform has been stymied because proposals for financing health care have been inadequate. Single payer proposals offer the advantages of universal coverage and cost savings, but involve unacceptable government price controls. Other proposals expand insurance coverage, which makes the most expensive health care system in the world even more expensive. Both types of proposals are undesirable because they involve expanding managed care.
The Balanced Choice proposal has the innovative ideas needed to overcome these problems. It provides universal coverage, avoids rigid government price controls, allows full choice of provider, gives providers freedom to set fees, frees employers from providing health care coverage, and utilizes very little managed care. The system costs less than is currently being spent on health care. Because it is good for employers, providers and consumers, it has the potential to create a political alliance that can result in fixing health care financing.

Brief Description

Balanced Choice Health Care is a proposal to organize the entire United States’ health care financing in a way that would establish universal coverage, give consumers a full range of choices of providers and treatments, allow providers to set their own fees, and cost less than the United States currently spends on health care. With Balanced Choice there are no more hassles with managed care or insurance companies, no more uninsured people, and no more worries about losing coverage when you leave your job.

Choice

The way it works is that everyone always has a choice of two Plans. Patients can choose which Plan they want to use each time that they select a provider. It is as if everyone carries two cards, one for each Plan. Providers also can choose which Plan they will accept each time that they take a new patient. Both providers and patients can change Plans, patients can use different Plans for different providers, and providers can choose to have a mix of patients from each Plan.

Standard Plan

The Standard Plan works a lot like an improved Medicare that has a good pharmacy benefit, long-term care, and guarantees that providers are adequately reimbursed. Copays are small, and providers agree to accept the Standard Plan reimbursement. For medications, lab tests, and imaging tests, Balanced Choice makes a base payment and patients pay the difference—called the “gap”—between the base and the cost of service.

Example of gap payment: Balanced Choice might pay $100 for one category of medication. If one brand of this medication cost $130, the patient would pay a gap of $30. If another brand cost $150, the patient would pay a gap of $50.

Independent Plan

On the other Plan, the Independent Plan, providers can charge more. This freedom to charge more than the Standard Plan is important because providers have realistic fears that their fees might be locked in by the government as they would be in traditional single payer health care proposals. In the Independent Plan, Balanced Choice makes a base payment (lower than the Standard Plan) and patients pay the gap between the base and the amount that the provider charges.

Financial assistance

Financial assistance is readily available for low-income patients and patients with catastrophic medical expenses so that no one needs to forego medical care due to lack of resources.

Cost-consciousness

Balanced Choice makes it easy for patients to get information about prices and gap payments. These gap payments are an important feature in Balanced Choice because they keep consumers cost-conscious. Patients care how much the gap payment is when they choose doctors or medications, and the consumer’s cost consciousness will keep prices down just as it does in other areas of the economy. When consumers are cost conscious there is no longer a need for managed care to control costs. Without the enormous bureaucracies of managed care and the health insurance industry, so much money is saved that Balanced Choice can provide universal coverage and lower the amount employers pay for health care.

Quality

Because there are two Plans, there is concern that the Standard Plan might deteriorate into substandard care for the poor. Balanced Choice prevents this by balancing the funds that go to each Plan. Balanced Choice makes adjustments in reimbursements like the Federal Reserve Board adjusts interest rates. The mandated adjustments assure that there is always enough money going to the Standard Plan and its providers to attract good doctors and provide good quality health care.

Balanced Choice is good for consumers, providers, and employers.

• For consumers, it provides universal coverage, enough financial support so that health care is always affordable, greatly reduces any managed care, and allows full choice of provider and treatments.
• For providers, it has the advantages of eliminating most managed care, decreases administrative time, and allows them to set fees above the Standard Plan reimbursement schedule.
• For employers, it relieves them of responsibility for health care insurance and substantially reduces the amount they pay for health care and workers compensation insurance.

Financing

Balanced Choice would create sufficient administrative cost savings to establish universal coverage and still would cost $100 billion less per year than is currently spent on health care (based on 2004 NHE data). While employers would still make some contribution to health care, the $100 billion savings would be allocated to reducing employers’ contributions to health care.
Balanced Choice would require transferring the money currently spent on health care into a Balanced Choice fund.

• All current state and federal government health care funding would be transferred to Balanced Choice.
• Employers’ contributions to health care insurance and the medical portion of worker’s compensation insurance would be converted to an employer’s contribution to Balanced Choice based on a fixed percentage of wages. The overall contribution from the nation’s employers would be $100 billion less than they are currently contributing to health care insurance and the medical portion of worker’s compensation insurance.
• Employees’ health insurance premiums would be converted to a contribution to Balanced Choice based on a percentage of their wages.
• Current out-of-pocket expenses would continue as gap payments and copayments except in cases of financial hardship and catastrophic health care expenses, when Balanced Choice would cover these expenses.

A full description of Balanced Choice, how it works, and why it is feasible is available in Balanced Choice: A Common Sense Cure for the U.S. Health Care Systems, by Ivan J. Miller.

Is the Balanced Choice Proposal Good for Mental Health Services?

Many mental health professionals have asked me about the impact of Balanced Choice on mental health services and professionals. There are good reasons that Balanced Choice is the best health care proposal for mental health services. Other proposals—expanded insurance coverage and a single payer system—both involve intensifying managed care. With mental health services, managed care undermines efforts to achieve parity, invades privacy, and adds an enormous administrative cost burden.

Balanced Choice Creates true parity by using the same copay and gap pay methods that are used for physical health care

• Protects privacy by eliminating most managed care and its intrusive utilization review process
• Increases funds available for service delivery by greatly reducing the administrative costs of managed mental health services

Mental health providers are also understandably concerned about reimbursement rates. They are not unique. The era of managed care has decreased reimbursement rates and salaries below acceptable levels not only for mental health providers but also for other health professionals including primary care physicians and nurses. In the mental health area, many managed care companies have lowered reimbursements without any adjustment for cost-of-living for 15 years. Low salaries are resulting in a nurse shortage. These three groups-primary care physicians, nurses and mental health providers—are reimbursed so poorly that qualified professionals are driven out of business. Mental health provider concerns about reimbursement rates are valid, and because low reimbursement rates result in lowered quality and shortages of professionals, these low rates are not in the consumers interest either.

The Balanced Choice organization believes the final health care reform proposal must meet the needs of consumers, providers, and employers in order to make the alliance of these three groups work. As Balanced Choice becomes more specific, it will have recommendations for raising the reimbursements of the underpaid health care professions. Once the Balanced Choice system is functioning, market forces will maintain adequate incomes for all health care professions.
No other health care reform proposal compares to Balanced Choice for creating true parity, maintaining privacy, reducing managed care, offering adequate reimbursement, and using health care dollars for delivering treatment services, not administrative services. In addition, because it is authored by a psychologist, Balanced Choice emphasizes the importance of psychology and mental health services in all health care reform proposals.

Please visit www.BalancedChoiceHealthCare.org for more information, to purchase Balanced Choice: A Common Sense Cure for the U.S. Health Care Systems, or for a free download of the first chapter.

Balanced Choice Health Care, Inc., 350 Broadway, Suite 210, Boulder, Colorado 80305