2 ways Trump gets health care wrong

I like The Donald for three big reasons: He doesn't need the big party money. He has had a real job outside of government (unlike 91 percent of the Obama administration and the other current candidates). And the establishment hates him. I also like the fact that he applies common sense to immigration, education and other hot issues. But unfortunately, Mr. Trump has apparently gotten lost in the weeds of medical care delivery and is letting his "advisers" guide him through. They are wrong on two points: transparency and block-granting money to the states for Medicaid.

When Trump says he will demand "price transparency" of doctors and hospitals he has a point. After all, when you go to the grocery store you don't shop for an hour without having some idea what it is going to cost. You know whether you can afford that sirloin because the price is marked on the product. Sadly, medicine is not generally like that. It could be transparent and once was – but you cannot do it by the usual path of statists, i.e. by government mandate.

I would gladly post my prices on my wall and be totally transparent – but I can't as long as I accept "third party payment." I cannot be transparent because no matter how many insurance contracts I sign, nor Medicare fee schedules I accept, I never know how much I will be paid for a service. I never know when I will be paid – it may take months or more. And finally, I never know when the insurance company or the federal government (Medicare) will reach directly into my bank account and take back the money they paid me years before. When that happens I get a letter (if private insurance) demanding a refund, or a direct debit from my business account (if a government payer) stating my treatment was deemed by their reviewer to be "not medically necessary." So not knowing how much a third party will pay me, how can I be forced to be transparent, Mr. Trump?

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I have friends who are cash physicians. They do post their prices because the patients pay cash at the time of service – not a copay, not a deductible, but the actual cost of the service. And for that the patients get privacy, great medicine focused on the patient not the computer, and lower costs, because cash allows shopping comparisons, and that is really what drives price control in the free market. I can buy tomatoes at Whole Foods for top prices or at no-name food market for cheaper prices and less consistent quality – but I have the ability to choose because I have knowledge. Now imagine going to any grocery and at checkout you say, "I'm not paying now – bill my insurance." Could a grocer survive with never knowing how much he would get paid for those tomatoes? Could he survive with some grocery insurance company reaching into his bank account without warning and taking out money a year later for this tomato purchase – on the grounds that he overcharged the price of his tomatoes? No other business could function that way, and neither can we. Witness the progressive closing of private practices.

Trump's second proposal is to block-grant payment for Medicaid to the states. Now this sounds like a good idea to promote local control – but–be not so deceived. The Donald may not realize this – I'll give him the benefit of the doubt – but Medicaid block grants are nothing more than a slush fund for corrupt politicians, bureaucrats and the companies that administer Medicaid. How much does Medicaid cost? Who knows? How do you follow the money? Medicaid funds are handled through partnerships with private corporations that "administer" the funds. Al Capone would have loved such a system. He probably would not have been sent up for tax evasion if he had such a corporate scheme to massage his money beyond any hope of tracing.

We know how much money (maybe) the federal government hands out. And presumably somewhere they know how much money is received in taxes. But from there it goes into a black box from which it is parceled out in dribs and drabs to providers and hospitals at rates below the cost of the goods and services. How much is skimmed in the process? We may know the total amount spent but not the number of people treated.

The last numbers the Kaiser Foundation has are from 2011. That suggests that Medicaid was spending about $2,000-$4,000 per person. But we don't today know how much Medicaid costs, nor what it pays per person, nor even what people are getting in the way of medical care – we know they are getting less and less. The largest percentage of the federal budget in 2014 went to health care (25 percent), and Medicaid from the feds was roughly $350 billion – a huge distribution of very squishy funds. So now Trump wants to distribute enormous funds – billions – to local state used-car-salesmen-turned-politicians to distribute. The phrase "ripe for fraud" was how my insurance agent put it. (And let me be clear. I trust used car salesmen with my money before they become politicians.)

The answer to this is not flinging large sums of taxpayers' hard-earned money out to the states, but to return to a system of free markets where outpatient spending is out of pocket and hospital care (large ticket items) is through actuarial-based insurance. Poor people are funded and cared for locally. For an example of this really working just look at the Zarapath Clinic in New Jersey run by the Doctors Eck. They take excellent care of the poor through local commitment, volunteerism, patient participation and deregulation – and they do it for less than the cost of Medicaid.

Mr. Trump, do not continue a system that breeds dependency (both of patients and politicians), but choose freedom and personal responsibility tempered with traditional American charity.