The Expanding Medical and Behavioral Resources with Access to Care for Everyone Health Plan

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The United States spends twice as much per capita on health care as other developed countries (1) but ranks in the bottom third for important measures, such as infant and maternal death rates and life expectancy (2). Current interest in U.S. health care system reform focuses on the expansion of health insurance to more individuals (3), but many proposals lack the structure that would improve the health of Americans in an affordable, efficient, and transparent way that maintains or even expands patient choice (4).

Healthcare Professionals for Healthcare Reform is a group of physicians, nurses, medical technicians, hospital administrators, public health experts, health care economists, business leaders, politicians, and patients who, inspired by the realization that conversations about health care reform lack input from health care professionals, convened to propose a universal coverage plan that builds on the strengths of the U.S. health care delivery system and improves on its efficiency and capacity for patient choice. Our plan, called Expanding Medical and Behavioral Resources with Access to Care for Everyone (EMBRACE), is based on a tiered approach to health care and on the tenet that the entire population can be covered for life-sustaining and health-promoting (basic) health care, with additional coverage available for those who desire it.

The EMBRACE 3-Tier System

The EMBRACE system would be composed of 3 tiers of coverage.

Tier 1, the base level, would cover the entire population from cradle to grave. It would include all medical, surgical, and psychiatric therapies considered to be life saving, life-sustaining, or preventive on the basis of the best evidence (from the medical literature and expert opinions).

A government-subsidized account similar to Medicare would provide the funds, with the elimination of all other public insurance. The method of raising this revenue could be similar to the present funding of Medicare (such as the Federal Insurance Contributions Act tax) and Medicaid, but because businesses should receive substantial savings after initiation of this plan, additional sources of revenue may be considered. These could include payroll taxes (indexed to salary), a tax on businesses on the basis of the number of employees (and their wages), or a combination of these. Because the number of items covered by Tier 1 in this new system would be substantially less than what Medicare and Medicaid currently cover, funds would be available to redistribute to achieve universal Tier 1 coverage. We believe that this should be a revenue-neutral redistribution of public funding.

Tier 2 would cover all therapies considered to help with quality of life, as well as some diagnoses or services that do not have sufficient evidence for a Tier 1 indication.

Private insurance carriers would administer Tier 2 services. The private insurance carriers would be allowed to offer a limited number of plans that would be developed by an oversight board (see next section), similar to the Medigap Plans A to L now stipulated by the Centers for Medicare & Medicaid Services (5). Although each insurance carrier would not have to offer all the plans, the offered plans would cover all the services stipulated by the board. A major advantage of this approach is that consumers (either employers or individuals) can compare the price of the plans.

Tier 2 plans can be broad (covering most Tier 2 services) or can be customized for specific groups, such as a geriatric plan that covers extended care facilities but not fertility care; a heavy laborer plan that includes chiropractic therapy; or a worker's compensation plan purchased by employers, employees, or unions.

Tier 3 would apply to all medical and surgical issues considered luxury or cosmetic, such as radial keratotomy or botulinum toxin treatments. Funding for Tier 3 would not be covered under the EMBRACE system—as in the current system—and all bills would go to the patient.

Pharmaceuticals will have similar tier assignments for medical coverage: Tier 1 would include formulations and therapies that treat or prevent serious illnesses and would mostly be paid for by public funds or be heavily subsidized. Tier 2 would apply to drugs and therapies that enhance quality of life and would be covered by private insurance. Tier 3 would be for luxury items.

Oversight

Our proposed system would be overseen by a panel of physicians and other health care professionals, public health experts, and economists who specialize in health care, known as “The Board.” The Board's mission would be to promote the health of Americans in a socially responsible and economically sound way. Similar to former Senator Tom Daschle's recently proposed “Federal Health Board” (6), it would be a quasi-governmental organization that resembles the Federal Reserve, which should make it less beholden to political pressures. It would be headed by a chairperson who would be appointed to a 10-year term by the president and require Senate confirmation.

The Board would have oversight of the Centers for Medicare & Medicaid Services and input into the U.S. Food and Drug Administration and the National Institutes of Health. Using already established Diagnosis-Related Group, Ambulatory Payment Classification, and International Classification of Diseases codes, the Board would decide which diagnoses and services are covered by Tier 1, 2, or 3 on the basis of medical importance (by using evidence-based data, including practice guidelines developed by expert medical panels, Cochrane Library reviews, and other sources), public health considerations, and economic effect. These assessments would be updated periodically.

The Board's authority to direct the National Institutes of Health and the U.S. Food and Drug Administration would allow it to direct research that focused on the therapeutic issues that it needs to achieve its mission (to improve the health of the country and reduce costs). For example, if evidence supporting a particular treatment is based on expert consensus, the Board may direct the U.S. Food and Drug Administration (for a medication or device) or National Institutes of Health (for an intervention) to request applications for studies that will allow better tier determination.

Among the prerequisites to the implementation of this system would be delineation of the specific relationships between the Board and existing agencies within the U.S. Department of Health and Human Services, in particular the U.S. Food and Drug Administration and the National Institutes of Health. Some reorganization of these government agencies might be warranted to optimize interagency interactions.

Billing

To address the excessive overhead involved in claim submission by providers and insurance companies, the Board would create a universal reimbursement form that would be implemented electronically by using a Web-based tool available to hospitals and physician offices. This form would be the only form of billing for all providers and would be Internet-based and simple to use. Form data would be transmitted to a central billing system, which would decide whether the condition or service is Tier 1, Tier 2, or Tier 3. Tier 1 services would be reimbursed directly to the provider. Tier 2 services would trigger a computerized search for insurance coverage; if insurance is found, the insurance carrier would be billed and if not, the patient would be billed. Bills for Tier 3 would be sent directly to the patient.

To help with questions about the assigned tier for a particular service, the central billing system would have a billing inquiry feature available to providers and consumers to allow inquiries about tier assignment in advance.

Advantages of the EMBRACE System Over Single-Payer Models

Ideally, a single-payer model would accomplish the goals of improving the health of the nation with a uniform and universal system of health care delivery. One such proposed system is the “Physicians for a National Health Program” model. Proposed in 2003 (7) and introduced to Congress in 2007 as H.R.H. 676 (8), the plan advocates an expanded Medicare system that would exclude all private insurance payers and eliminate all for-profit hospitals and HMO-type providers.

Like our proposal, the Physicians for a National Health Program plan would provide patients universal access to approved medical care that would be paid by a national health insurance agency. However, if the desired treatment or service in the Physicians for a National Health Program system is not approved, patients will most likely find ways outside of the system to obtain that service. As in other countries with a single-tiered health care system, use of unapproved services may lead to a de facto multitiered system (9). In these latter systems, parallel outside enterprises often grow, become private, and compete with the publicly funded system—usually to the detriment of both.

The EMBRACE plan encourages private (Tier 2) participation for services that are not publicly financed. The existence of this integrated private tier would allow for fewer covered services in Tier 1, which in turn would reduce the public financial burden. In addition, allowing all the tiers to be part of the same system would allow patients to see the same provider for all services and render all services subject to the same ultimate oversight. Politically, a system that continues to allow private, for-profit insurance and some degree of free market forces would be more viable than a system that attempted to control or eliminate them.

Our plan preserves many of the favored features of the present system, such as a provider's ability to offer all services even if they are Tier 2 or Tier 3, which would keep the new system more familiar to the patient and provider and in turn facilitate the transition to it.

Conclusion

The EMBRACE plan offers universal coverage for essential health care and promises to reduce mortality and morbidity and encourage preventive care. The increased efficiency of the system should allow hospitals to reallocate funds to other services, such as health information technologies, and allow health care professionals more clinical time. For the patient, the system offers universal coverage for basic health care needs, transparency for Tier 2 coverage, and complete portability of all insurance coverage. Employers would be relieved of the financial burden of coverage for most services but retain the option to offer Tier 2 coverage as a benefit to employees. Finally, insurance providers would benefit from the elimination of the financial risks associated with Tier 1 services, and the system at large would benefit from centralized billing and a reduction in administrative overhead.