The Evolution of Balanced Choice
Ivan
J. Miller
I
have been working to develop Balanced Choice since 1994, when I began
my activism in health care reform. Friends and colleagues have often
mused, “There has to be a better way 
to
run a health care system.” I took this statement to heart and
have been searching for the “better way.” Balanced Choice
is the result of that search.
From the beginning, it was apparent to me that no one had proposed a
health care system alternative that would be acceptable to the American
people. Providers and many others were adamantly opposed to a single
payer system, primarily because it involved government price controls.
On the other hand, most of the other proposals involved the dysfunctional
insurance industry and managed care. The only proposal that was free
of government price controls and managed care was medical savings accounts.
This proposal is good for the healthy and wealthy, but not a real solution
to providing health care for all. To move health care reform forward,
we needed a better proposal.
The Balanced Choice proposal came together in stages. Early on, I became
aware that a better system needs to be based on sound economic principles.
As part of my duties as the Executive Director of the National Coalition
of Mental Health Professionals and Consumers, Inc., in 1997, I was involved
in preparing a white paper for the Department of Justice (DOJ) on “Collusive
Behavior in the Managed Care Industry.” This paper discussed how
managed care stifled competition in a manner similar to monopsonies
and monopolies, how it harmed quality and access to treatment, and why
it appeared to violate the Sherman Anti-Trust Act. Although the DOJ
was unwilling to take action, I learned about the importance of the
underlying economic principles in designing a health care system. It
became apparent that having an economic system that restored consumer
cost consciousness was a key element in fixing the health care systems.
The method for restoring consumer cost consciousness came from two sources.
Karen Shore, the President of the National Coalition of Mental Health
Professionals and Consumers, made a limited proposal for a base pay
and gap pay system that she called Managed Cooperation. In addition,
Australia had the base pay and gap pay as part of their heath care system.
Later, in 2004, I learned that a gap payment type system in Europe had
lowered the cost of medications. Gap payments were the element needed
to restore consumer cost consciousness.
Although gap payments provided the solution for consumers who could
afford an out-of-pocket expense, many people could not afford gap payments.
Therefore, another component to developing the “better way”
was to establish two plans. With the two plans, there could be universal
coverage and affordable health care for everyone.
There remained one major flaw in the two plans model. Single payer advocates
have persuasively argued that if there were a two-tiered system, the
less expensive tier would deteriorate into substandard care for the
poor. They argued that to save money, the government would reduce the
lower tier reimbursement so much that quality would be harmed. Public
mental health systems, public health systems, and now Medicare are examples
of how under-funding can lead to lowering the quality of care. It was
not until 2002 that I was able to find a solution to this conundrum,
the Mandatory Funding Split. This was the missing piece.
In 2003, a rough version of Balanced Choice was submitted to the O’Connor
Report, “Build an American Health Care System” contest.
Although it was one the 10 finalists, it did not win the prize. The
feedback indicated that it was difficult to understand this early version
of Balanced Choice. The new ideas needed to be presented in a less complicated
manner.
Through these years of development, I have been fortunate to have support
from friends and colleagues who have kept telling me that Balanced Choice
is too good of an idea to abandon. They have contributed ideas and provided
critical reviews. While I am formally the sole author, the current version
of Balanced Choice is actually a product of the contributions of many.
Since 2003, I have worked to improve and simplify the explanation of
Balanced Choice. I decided that it was necessary to have a book describing
the entire proposal to use as a reference. With the book completed in
October 2006, with the backing of the nonprofit, Balanced Choice Health
Care, Inc., I will be promoting the ideas.
(More information about the evolution of Balanced Choice is available
in the preface in
Balanced Choice: A Common Sense Cure for the U.S. Health Care Systems.)
Click
here to order the book.
