Straight Platform Politics

The Four-Party Health Care System – Part 5

“The Modern Health Care Maze: Development and Effects of the Four-Party System” was published in the Summer 2009 issue of The Independent Review. Authors Charles Kroncke and Ronald F. White conclude in their article: “Ultimately, the only way to reform our health care system successfully is to destroy the infrastructure that sustains the four-party system….” See Part 4

Kroncke and White wisely ask what most people haven’t yet asked: “In hindsight, did it ever really make sense to set up a health care system whereby fourth-party corporate employers purchase health care insurance for their first-party employees from third-party corporations, which in turn pay second-party providers for health care products and services? Does any other industry insulate buyers from sellers in this way? Why does this arrangement make sense only for the health care industry? Why not for food, clothing, and shelter? Why not for homeowners, life, and auto insurance?”

“The current maze of health care policy wrought by years of accumulated enabling legislation has in effect disabled free-market mechanisms….Until we reduce government’s ability to surreptitiously distort the market forces that drive the health care industry, the juggernaut and other dysfunctional arrangements will continue to plague the system.”

Hopefully, more people will understand the importance of changing our health care system from an employer to a patient driven system which would treat individuals far more equally than what we have now. It’s imperative that we settle for nothing less.

Charles Kroncke, Ronald F. White, The Independent Review, The Modern Health Care Maze, employment-based health insurance, enabling legislation, first-party patients, four-party health care system, four-party payment system, fourth-party employers, free market, health care reform, health care system, health insurance, insurance companies, second-party providers, third-party payers

The Four-Party Health Care System – Part 3

The Summer 2009 issue of The Independent Review included the article “The Modern Health Care Maze: Development and Effects of the Four-Party System” by Charles Kroncke and Ronald F. White. In their article the authors maintain that “much of the daunting complexity of health care reform can be reduced if we focus more critically on the four-party payment system.”

“In 1942, the U.S. government rescued the health insurance industry by means of enabling legislation that spawned the fourth (sic)-party payment system.” The 1942 Stabilization Act permitted big corporations to provide fringe benefits to their employees without violating the governmental freeze on wages and salaries then in place.

The tax exemption to employees on employer contributions to health plans was codified in 1954. More and more enabling legislation made the four-party health care system sweeter and sweeter.  See Part 2

“For a while, employer-provided health insurance was enormously appealing to all major stakeholders. First-party patients employed by major corporations received nontaxable, low-cost (or no cost) health insurance. Second-party providers continued to earn super-competitive compensation for their products and services. Third-party private insurance companies (for-profit and nonprofit) sold more policies and therefore could cover provider costs by economies of scale. And fourth-party employers could increase their employees’ compensation without having to pay the full cost.”

“Since then, the four-party system has become an entrenched tradition based on an unsustainable win-win-win-win illusion.”

1942 Stabilization Act, Charles Kroncke, Ronald F. White, The Independent Review, The Modern Health Care Maze, corporations, first-party patients, four-party health care system, four-party payment system, fourth-party employers, health care reform, second-party providers, third-party payers

The Four-Party Health Care System – Part 2

“The Modern Health Care Maze: Development and Effects of the Four-Party System” was published in the Summer 2009 issue of The Independent Review. The authors, Charles Kroncke and Ronald F. White, state: “Prevailing discourse on health care reform aims at the simultaneous realization of three extraordinarily idealistic goals: universal access to high-quality health care at a reasonable cost.”

But what does all that mean? What does universal access really mean? Access to what, exactly? Who determines what is and what is not high-quality care? Doesn’t that differ with different people? And what is a reasonable cost? That certainly differs from person to person.

One important observation in this article is that European national health care systems do not provide universal access to high-quality health care at a reasonable cost. Therefore, imitating these systems will not get us anywhere near achieving these idealistic goals even if we could define each one.

Another observation is that the “current state of the health care industry in the United States has been shaped by an accumulation of enabling legislation that began in the early twentieth century and continues unabated today.” See Part 1

This huge amount of legislation influences access, quality, and cost. Our health care system was developed “less by the invisible hand of the free market than by the visible hand of government.” Therefore, “before Americans abandon the free market, they ought at least to try it.”

Charles Kroncke, European health care systems, Ronald F. White, The Independent Review, The Modern Health Care Maze, first-party patients, four-party health care system, four-party payment system, fourth-party employers, free market, health care reform, high-quality health care, reasonable cost, second-party providers, third-party payers, universal access

The Four-Party Health Care System – Part 1

An article in the Summer 2009 issue of The Independent Review examined our nation’s four-party health care system. Charles Kroncke and Ronald F. White are the authors of “The Modern Health Care Maze: Development and Effects of the Four-Party System”.

The article states, “Our national health care system is so dauntingly complex that reform efforts seem hopelessly adrift.” The authors feel that reform efforts should begin with looking at health care stakeholders. The obvious ones are: first-party patients, second-party health care providers, third-party payers (private insurance companies and public governmental programs), and fourth-party employers providing health care insurance for their employees (who will become first-party patients).

Other stakeholders involved in our nation’s health care system include: scientists and researchers, research labs, colleges and universities, lawyers, law firms, unions, and professional societies. And we cannot forget all of us who “invest in mutual funds that hold stock in the health care sector.”

The authors point out that the fact that the “health care industry accounts for at least 14% of the gross domestic product (GDP),” illustrates just how complex our health care system is. It goes way beyond the doctor-patient relationship.

“In the United States, politics—that is, each stakeholder group’s capacity to influence powerful legislators—drives health care reform.” Health care has so many stakeholders that true and lasting reform seems out of reach.

Charles Kroncke, Ronald F. White, The Independent Review, The Modern Health Care Maze, doctor-patient relationship, first-party patients, four-party health care system, four-party payment system, fourth-party employers, gross domestic product, health care reform, health care stakeholders, second-party providers, third-party payers