Because of a lack of support, the American Health Care Act (AHCA) was withdrawn for a vote from Congress.

Additional modifications to amend the American Health Care Act were proposed to help appease conservatives and moderates who had concerns about the original bill. Additions included changes to Medicaid, giving states the option of requiring able-bodied Medicaid recipients to perform community service, participate in job training or work.

Also, states would have the option to receive a block grant for adults and children participating in Medicaid versus a set amount of money per enrollee, reducing federal support for Medicaid. The House has proposed earmarking $75 billion in additional tax credits for older Americans to help offset the cost of buying policies in the individual market. Ultimately, these changes are simply not enough to make the American Health Care Act a success because the fundamental challenges and basic reforms have still not been addressed.

However, even if it had passed in both houses and was signed into law by President Donald Trump, it would be still doomed to fail, like the Affordable Care Act. There is much disagreement about the latest attempt at health care reform and no consensus on how to structure a plan that will work for everyone long term. Health care reform’s only chance for success is by gaining bipartisan support, which means real, fundamental reform that would be able to provide universal coverage without dramatically increasing the national debt or taxes. The problem is that everyone is trying to figure out how to pay for dramatically overpriced goods and services while missing the key element that is preventing a lofty, but very attainable, goal of affordable universal coverage.

The current U.S. system is based upon an insurance model, which is designed to provide coverage for medical emergencies. Insurance is not designed to function effectively for routine care and has never worked in any industry as a method of providing services that are used on a routine basis. This is because it is excessively bureaucratic and the only method of controlling costs in an insurance-based model is by denial of coverage and using complex reimbursement formulas. In reality, the insurance companies’ end goal is not to reduce the cost of health care, but, rather, to increase it. Also, the end users (patients) and providers (doctors, hospitals and laboratories) have no incentive to control costs. They all want to get as much payment as possible. Is it not surprising that health care costs are spiraling out of control when all parties involved make more money if health care costs rise over time?

I have been a physician for over 20 years and have seen the medical care in this country seriously deteriorate, with decreasing quality of care and skyrocketing costs. It is particularly frustrating and saddening how increasingly difficult it has become to provide basic health care to patients over the last three to five years. There is little predictability for health care consumers in this country. Patients are increasingly frightened to use their insurance, as it has become a game where hospitals, laboratories and drug companies charge grossly inflated prices in addition to charging different prices to different patient groups for the same service. There is no set pricing.

If you are paying with cash or have a health care savings account (HSA), you may pay 10 to 20 times what a particular insurance patient is being charged. Patients and doctors have no idea what will be charged until the patient gets a bill a few months later. Generic medications that cost pennies a pill, or about $10 to $30 per month just a few years ago, are now hundreds of dollars per month. Routine procedures that were a few hundred dollars two or three years ago are now $20,000 to $30,000. Laboratory tests that were $30 a few years ago are being charged at $300 to $2,000 per test.

In what other industry do you not know the cost before you agree to buy the product or service? What if we had food insurance (food is important, right)? You walk into the grocery store and get a piece of chicken because it is healthy and you believe reasonably priced, but the problem is that the store will not tell you how much the chicken costs (if you push them, they may quote you 10 times the usual cost if you want to pay cash). The store will only take your insurance information and say that they will submit it for payment. So, you walk out with chicken in hand and go home to cook and eat it. A month later, you get a letter stating that your insurance is reviewing the claim. Then, a month after that, you may get a bill for a co-pay of $40 (remember, the chicken only really costs about $6), or they say that the chicken was not covered because it wasn’t “medically necessary” and that a hotdog was the preferred food on your plan, so you owe $2,000.

Another scenario is that the store might say the chicken costs $2,000, but the insurance company states that they disallowed $1,000 (for your benefit) and paid $800 for the chicken, so you now owe $200. You are so happy that you have insurance because you only had to pay 10 percent of the price (not knowing that the chicken should really only cost $6). Alternatively, you may also get a bill for $10,000, saying this is not a covered food (this happens all the time in medicine). When you get billed $10,000, you can try to get your doctor to write numerous letters of appeal, which are rarely effective, or the insurance company may settle with you for $5,000. You may have to take out an equity loan on your house or declare bankruptcy.

Unfortunately, all of these scenarios are commonplace in medicine. Over 60 percent of personal bankruptcies in the U.S. are due to medical bills. They are, however, not due to a lack of having health insurance, as many would assume. In most cases, they are filed by people who thought they would be covered by their insurance, but were unexpectedly presented with a grossly inflated bill that was denied coverage by their insurance carrier. I can attest that such a scenario is now seemingly commonplace with the patients thinking they were covered, but the insurance company refuses payment, often with little logic or explanation of the denial of payment.

The only way to successfully reform health care in the U.S. is to transform the bureaucratic, corrupt system of payment for health care goods and services with a free-market system that provides universal coverage. To achieve this, a successful plan will require five fundamental components that drive down the cost of health care:

• There must be free-market, consistent pricing regardless of method of payment with no penalty (or discount) for payment at the time of service (the insurance system will only be for emergencies).
• Put an end to corporate monopolies and corruption.
• The consumer must have knowledge of the pricing and have an incentive to get the product or service at the lower price by being able to compare pricing of different providers, empowering and allowing patients to decide how best to use their health care dollars.
• Bureaucrats must stop thinking that increasing patients’ options of third-party payers is a free-market solution and stop believing that more choices of insurance carriers will significantly lower long-term health care costs.
• Routine care will be covered by HSAs so patients can shop for the best prices. This should not be difficult, as shortly after such a requirement is in place, many websites will certainly compile the prices and help consumers compare prices to make the best decisions when spending their health care dollars.

The overall cost savings would be more than enough to allow the government to provide universal health care. A further benefit, however, is that many of those without any form of insurance in the proposed system would actually be better off than those currently with some of the best insurance plans because the free-market price for products and services will frequently be less than the total amount of out-of-pocket money, including co-pays, deductibles and expense sharing, that is typically required with current health care plans.

Again, this requires that pricing be the same for all the insurance patients, but equal or lower for cash or HAS payments. The hospitals, laboratories or doctors’ office will be compensated at fair, free-market prices for their goods and services, as is the case with every other business in the U.S. They will all also save significant money without having to submit massive paperwork to the insurance companies and wait for payment that may get denied or have to chase patients for copays that notoriously never come. Subsidies to lower-income populations will be given as deposits into their HSAs for routine care, so patients can decide how to best spend their health care dollars alongside an insurance component that is used only for emergencies.

This outlines the only reasonable method of reform that addresses the true underlying problems that are driving health care costs out of control. It would be an effective means of dramatically lowering spiraling costs that would effectively provide a truly free-market system with savings that would allow for universal insurance coverage for most everyone and that both reasonable Republicans and Democrats could support. If the key problems of health care cost are not the focus of the next health care reform plan, it, too, will be doomed to fail.

About the author: Kent Holtorf is the medical director at Holtorf Medical Group.