In the forty years since I started medical school, I have worked in socialized medicine, student health, a cash-only practice and a traditional fee for service small group practice. The bulk of my experience has been in a government-sponsored rural health clinic, working for an underserved, underinsured rural population.

Today, I will make a couple of concrete suggestions, borrowing from all the places I have worked and from the latest trends among the doctors who are revolting against the insurance companies by starting concierge medicine and direct primary care practices.

Because I am a primary care physician, I will mostly speak of how I think primary care physicians should be paid.

I will expand on these concepts below, but here are the main points:

1. Have the insurance company provide a flat rate in the $500 per year range to patients’ freely chosen primary care provider, similar to membership fees in direct care medical practices.
2. Provide a prepaid card for basic health care, free from billing expenses and administration.
3. Unused balances can be rolled over to the following years, letting patients “save” money to cover co-pays for future elective procedures.
4. Keep prior authorizations for big-ticket items, both testing and procedures, if necessary for the health of the system.
5. Keep specialty care fee-for-service.
6. Have a national debate about where health care ends and life enhancement begins and who should pay for what.

Health insurance needs to be simple to understand and administer. It needs to promote wellness, and it needs to remove barriers from seeking advice or care early in the course of disease. It needs to empower patients to use health care services wisely by aligning patients’ and providers’ incentives.

Health insurance should not be deceptive. It should not promise to pay for screenings (colonoscopies and mammograms) and stop paying if the screening reveals a problem (colon polyps or breast cancer). It should offer patients the right to set their own priorities for their health while demanding concern for our fellow citizens’ right to also receive care.

Health insurance is not like anything else we call insurance; all other insurance products cover the unexpected and not the expected. Most people never collect on their homeowners’ insurance, and most people never total their car. Health insurance, on the other hand, is expected by many to be like a bumper-to-bumper warranty that insulates us from every misfortune or inconvenience by covering everything from the smallest and most mundane to the most catastrophic or esoteric.

What would it look like if Johnny or Fido puts mud prints on the living room wallpaper and Dad makes a claim on his homeowner’s policy? Or if Sally spills chocolate ice cream on the beige upholstery of mommy’s new car and the auto insurance has to pay to have the seats recovered?

In today’s health care, everything is potentially a covered service, and there are no incentives to limit one’s claims against the insurance companies. I believe we need to make patients view health care spending as their business, and the money as their money.

My proposal for payment reform in health care can work in a single-payer system or with multiple payers, both public and private insurers.

Have the insurance company provide a flat rate to patients’ freely chosen primary care provider, not the $3 per member per month we used to get from the HMOs of yore but real money. Something in the order of $500 per year would be more reasonable for the primary care physician to manage a patient’s health care. This would cover maintenance of a patient-focused and updated medical record, care coordination, management of medication and communication issues, access to medical triage and treatment capacity and one yearly visit for personalized screenings and care planning. For a panel of 1,500 to 2,000 patients, this would bring in $750,000 to $1,000,000.

Keeping in mind that the annual per capita health expenditure in this country is $8,500, that would gobble up a mere 5.9% of the pie. The billing for this would be very simple; just a head count multiplied by the monthly fee. For comparison, physician practices in the United States now spend $82,975 per physician per year interacting with payers, according to the Commonwealth Fund. Roughly speaking, that means doctors spend more than one hour every day working to pay the billing department and to do the free work we perform for the insurance companies. Imagine the improvements in patient service an extra hour a day per physician would make possible.

The advantage with this kind of system is that it would promote shared resource stewardship between doctors and patients. Primary care doctors would be incentivized to maintain large enough panels of patients to get the basic funding, but they would need to maintain patient satisfaction with their service in order to keep that funding.

Like cash-only direct primary care practices, with a financial foundation covering basic operating costs and with elimination of billing expenses, practices receiving insurance money up front can keep the total visit costs low. With overhead already covered, per-visit cost could be almost in line with today’s patient co-payments.

I believe that under this model, primary care could do a much better job being responsive to patients’ needs than in today’s $7 per minute hamster-wheel race for the insurance money.

Provide a prepaid card, similar to EBT cards for food stamps, or department store gift cards, that patients can use for the average number of annual visits (3 to 4) with their primary care physician and a basic amount for laboratory tests as well as “blanket approved” ancillary services like initial visits with counselors, dietitians and physical therapists. Again, no billing, so we could do much more for less money.

Beyond the basic level of primary care, higher co-payments and prior authorizations could indeed have a role. Money from the basic allotment not spent in a given year could be rolled over to cover future co-pays, such as for elective surgeries. This would help reduce the tendency to spend down the account every year with a “use it or lose it” mentality.

Specialty providers should not be paid by capitation, as some people have suggested, because the market forces that would make it necessary for primary care doctors to maintain a satisfied (and healthy) patient population would not work as patients often wouldn’t know how to rate their specialist until they needed the care. By that time it may be too late to “vote with your feet” and go elsewhere. Who would sign up with a brain surgeon, just in case he needed one?

At the risk of offending my specialist colleagues, the hassles of insurance billing and prior authorizations must seem at least a little easier to bear when you make your living doing fifteen minute cataract surgeries for $3,000 each than when you treat complicated diabetes, hypertension and heart disease in fifteen minute intervals for less than $100.

For catastrophic illnesses, like cancer, eliminate co-payments altogether and provide monies to reduce barriers to care, like transportation to daily radiation treatments, which can be burdensome on patients and families.

This may be controversial, but we as the country that spends twice what other countries spend on health care need to talk openly about setting priorities. Going back to the example of homeowners’ insurance above, if all my neighbors make insurance claims to essentially pay for redecorating their homes, and my premium goes up, do I have the right, or even the obligation, to speak up and say that they are hurting their neighbors when their claims increase all our premiums?

Some of the difficult conversations we need to have concern the shifting definition of disease in our culture. Things that used to be seen as normal aging or just life in general have gradually become diseases, especially when new and expensive drugs are marketed directly to consumers. This is why I propose that diseases like cancer should be better covered than runner’s knee, benign enlargement of the prostate (and this is a sixty-year-old male talking) or restless leg syndrome (even though it was described by a Swede from my alma mater). Even temper tantrums are a disease now, and I can think of several $200 per month drugs doctors prescribe for them. And, by the way, most newer brand-name drugs seem to cost at least $200 to 250 per month. We all need to be aware of what tests and treatments cost, so we can assess their value.

As a Swedish American, I can honestly say that health care with no market forces is not an ideal system, but for market forces to have a chance to work, consumers (patients) must think of the money they spend as theirs, not someone else’s. Before that money landed in the insurance companies’ or government’s coffers, it was on the top line of each of our pay stubs. We need a health care system that keeps us thinking of our nation’s health care budget as our own.

“A Country Doctor” is a family physician who blogs at A Country Doctor Writes:.