Open System Health Care

new-medical-distribution-systemI don’t know about you, but I’m growing a little tired of the lack of progress and new ideas coming forth for health care reform. I wonder if instead of making private citizens scream at their elected officials we could get those causing the problem to scream, instead? Here’s how.

Instead of reforming health insurance (which is what we mean today by “health care reform“) what if we reform the industries at the root of the problem? What if the government opens up distribution channels to the raw supplies so you can buy the stuff you need on the open market?

Let’s say you need a new knee. The doctor says, “I could buy the part and it’ll cost you $2500 or here are the specs on what you need, you may be able to find the exact same part cheaper.” (Take away the fancy titles, this is not unlike going to get a new muffler!) The doctor gives you the specs for the item you need, and you go to and price the part you need for the operation. works directly with the manufacturer in Warsaw, Indiana to carry the most commor specs and carries them in stock. Based on the laws of supply and demand, you are able to go to and buy the exact part you need for $800. A week later it is delivered to your house and you take it with you to your surgery.

Same thing works for medical equipment. The current system will not allow you to go to to rent a wheel chair that you need after your surgery. Instead, your doctor calls the local medical equipment distributor and they rent you a wheel chair for $500 that they’ve rented 25 times already but paid $322 for from the sales rep. Under the new system, since you can now work directly with the manufacturer, you go to their website and buy the thing for $280 or you go to Craigslist and pick one up for $50.

Naysayers will toss out this right away… “what about drugs? You can’t open up the drug market!” You actually can open this up as well. Your doctor could provide you with a unique code which grants you a certain prescribed drug. You make that purchase online and cut out the middle man, it’s delivered to your door. For drugs that are abused, have it delivered to the doctors office. Since the office won’t be meeting with endless drug reps and DMEs they should have plenty of time to sign for stuff from FedEx.

This really isn’t that complicated. It just opens the system up. Currently, everything you have delivered to you in the health care system is based on a closed distribution model. You have no ability to determine what the manufacturer made the item for, what the mark up was when they sold it to the distributor, what the sales rep made when he sold it to the hospital, nor what the hospital paid for the item. You only know what they are charging you for on the itemized bill. And you know that it is all negotiable because that’s what Medicaire, insurance companies, and private individuals do. So you may see that the hospital billed $5500 for the replacement knee but because it’s a closed system you have no way of knowing that the manufacturer in Indiana made it (at a profit to themselves) for $600. Consequently, the closed system is bloated with mark-up. It’s a closed capitalist system.

We’ve done this same thing in almost every industry. Why not do this to health care?