DM: What happens if a patient become acutely ill and needs hospitalization?

KH: Good question. THAT is what insurance if for, an emergency, a surgery. Let's say someone is spending $500 per month on insurance premiums with $100 a month for a good catastrophic [health coverage] plan. Now you have $400 a month to use as you see fit. Whether it's for visits or medications or supplements. The patient becomes empowered, much more educated and involved in their care. Most of the time they have left over money to roll over, or give it back and give the patient a big incentive to save money. It is a really good system but medical savings [plans] have a big fatal flaw as I said since cash should be worth five times as much in buying power but is not.


DM: Let's say we get rid of the middleman, the insurers, from health care delivery and we go purely from patient to provider, could there be a role for government as a clearing house in cutting out insurers?

KH: You have a lot more options that way. The key is bringing it back to the doctor-patient relationship. I would think they would need regulations saying cash is the cheapest.

Many places don't understand cash. What if we had food insurance? What if you went to a store and said how much is that carton of milk? Well I don't know, let's see how much we can bill insurance. So you bill $100. Well okay, we got back $35 and you owe $65. So you can see it's crazy and, unlike food, no one knows the cost of health care. And you don't care because you have insurance.

DM: What about indigent patients? How would they be served under a cash model?

KH: It's the same thing. Instead of giving them premiums and writing health insurance, you provide this fund for them to use and if they don't use it, they get some back. For any person it works, whether high income or low income, you are going to really drive down costs.

When you talk about preventive medicine and people need to be healthier, this is the way to do it, get them involved in their care. With insurance they are not. If you are paying for it, you make sure you get the best value.

DM: Are other doctors doing this?

KH: Many, many doctors are going to the non-insurance model because many of the good ones have gotten really frustrated. They know they can provide better care. So it's competition among doctors. Competition among insurers is not competition. You have to compete among doctors, among labs, among hospitals, that is how you bring the costs down and the quality up.

DM: You would think that chronic disease management would be something that a health care system or HMO would be good at.

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