System #26: Healthcare

I asked myself, why is healthcare so expensive and came up with the following ways to reduce our costs...

Right now, people say, we have a shortage of doctors, but what they mean to say is we have a shortage of people who can "heal" people, though that shortage is actually of our own creation. 70% of hospital visits are pretty rudimentary, stitches, bandages, diet and health advice, yet many of these things can be taught to well meaning citizens in a few months to a year at most. We don't need the shear mental power and knowledge of a human being who's gone to school for 4 years of undergraduate education, 4 years of graduate education, and 3-7 years of residency...

I believe we could massively decrease the pressures on the health professions, the costs of healthcare, and the access of healthcare if we stopped listening to the lobbying efforts of the American Medical Association (AMA) that says that only doctors can do these things. Nurses are already trained to do these things and much more, but I don't even think we need to place the burden on them either. Instead, we should move to a tiered licensing system, delineate the different levels that are needed and open the gates to allow people to certify and open up their practices. Here's how that could look.

Tier 1: Clinical Associate License (1-2 years of training)

Handles wound dressing and simple stitches, vaccinations and injections, basic physical exams (BP, heart, lungs, temperature, vitals), common prescriptions for things like antibiotics, antihistamines, blood pressure meds, birth control, preventive care: nutrition, diet, lifestyle guidance, request blood work, follow-ups for stable chronic diseases (hypertension, diabetes check-ins).

This would handle 70% of all doctors visits and would refer things to higher tiers if it required more experience.

Tier 2: Nurses (4 yrs undergrad + licensure/certifications)

Would be occupied by our already highly trained and capable registered nurses. These professionals would take over once patients required hospital stays, continuous monitoring, or more complex interventions. Nurses in this tier would read and interpret blood work, manage IV medications and oxygen, oversee wound care, and provide round-the-clock observation. Their role would be to care for patients who are essentially stable but precarious — people whose conditions are under control for the moment, yet could worsen quickly without expert supervision. Nurses here act as the bridge between routine outpatient care and the higher diagnostic or interventional expertise of physicians.

These professionals would handle 15-20% of patients.

Tier 3: Doctors (4 yrs undergrad + 4 yrs graduate + 3 yrs residency)

Would remain the domain of doctors as we know them today. Their job is to handle the complex and confusing cases that make it through Tier 1 screening, to diagnose the unusual or unclear symptoms, and to manage patients who have not improved with standard care. Physicians at this tier would decide on advanced treatment plans, integrate multiple streams of test data, and when appropriate, refer patients upward to subspecialists or surgeons. Their training, diagnostic depth, and multi-disciplinary knowledge would allow them to triage appropriately when needed, but be able to see the whole picture, navigate uncertainty, and manage the riskier end of general medicine.

This would include about 10% of patients.

Tier 4: Surgeons, neurosurgeons, specialists (4 yrs undergrad + 4 yrs graduate + 3 yrs residency)

Focused completely in their narrow speciality

At the top, Tier 4 would be reserved for specialists and surgeons. These are the practitioners who focus on one area of the body or a specific type of intervention — neurosurgeons, cardiologists, oncologists, transplant surgeons. They represent the pinnacle of expertise, applying years of fellowship training to highly specific and often life-saving work. Tier 4 doctors would be called in only when cases escape the scope of Tier 3 physicians, ensuring that the scarcest and most expensive expertise is concentrated where it is most needed.

Which would account for 3-5% of patients...

Insurance

Aside from the reason of a shortage of licensed healthcare workers, we also have the issue of health insurance driving prices skyward. Why are they driving prices skyward you ask? Because when the price of a service is detached from the person who actual pays it, prices edge up. This concept is called moral hazard: we don't care as much about someone else's money.

Let me ask you this, would you pay $2,600 (the national average) for an MRI? It's not the antidote to your pain, it's not gonna fix anything by itself, it's just one tool amongst many for diagnosing your root cause. To put that in perspective, that's 1/4 of a decent car, something you could use for YEARS to navigate our horribly designed cities. That cost, by the way, isn't the full cost of your visit, just one piece.

If you take out monopoly power (the fact that there may only be one MRI machine in a town), or regulatory hurdles (needing a trained radiologist to operate the machine - which would be one easy way to reduce costs), cost shifting (the practice of charging more for profitable services to make up for less than profitable ones), and the dreaded administrative fees, the true cost to operate an MRI is still not cheap, but it's closer to $200-400 dollars to account for the service contracts, energy requirements, and special requirements (cooling, shielding, etc).

Catastrophic Insurance

Instead of using insurance for everything healthcare related we should get back to a more direct form a payment, a subscription. Paired with a tiered medical licensing modal as discussed previously, we could have subscriptions to Tier 1 providers, with catastrophic insurance for the really bad stuff which would cost people about $2,000/yr with a $2,000 deductible, for anything necessary beyond Tier 1.

The US currently spends ~$2 trillion per year (2022–2023 data, CMS & CBO) and with a current population of 333 million that means we're spending about $6,000/per person, which means the government, with our current spending, could foot the bill for our collective catastrophic insurance. In fact, with savvy financial planning, and incentivizing better cultural norms around food and health, we could make money every year from bringing down the national utilization of those funds meaning that we could reinvest the money invested in this program that isn't used each year; ultimately aligning the government with the health of its people.

So, what does this all mean?
Imagine a world where you pay a subscription fee to your local Clinical Associate, supporting their practice as they support your health and the health of your community. You would be free to choose any practitioner you would like, as long as they have a Tier 1 license. Don't like the choices? Maybe you could become one, within 1-2 short years of training, you can open up your practice. In this subscription, everything would be included unless it escapes the scope of what the practitioner is licensed for, in which case he would refer you to Tier 2 or 3, which, over a certain price (your deductible), everything would then be covered by the government.

This would work towards reducing the wait lines in hospitals, providing faster service to many more patients. Utilize and unleash our capacity for innovation on the ground floor of our medical system by allowing interested people to aid their communities by being able to service them with an achievable licensing system. It would bring back the humanity to healthcare since folks would pay for the Tier 1 practices that provide a well rounded benefit to their subscription. This would unleash Tier 1 providers as the shepherds of their flocks. The healthier the flock, the more money they make. Not only that, the more successful the Tier 1 systems, the more money the government would save from having to fulfill catastrophic claims.

What do you think?