Presidential candidate John McCain said he believes we should find a “free market solution to the problem of unavailable and unaffordable health care.” I propose a solution that, unlike most of the recent campaign rhetoric, is not about rearranging the deck chairs, but instead offers a way to balance the needs of both the givers and receivers of health care.

The public health care debate usually begins by addressing the need for third-party funding solutions. Little is said, however, about the actual care givers: the hospitals and clinics. I advocate a different approach that will cost less while also strengthening the nation’s health care infrastructure: Let us buy insurance from the facilities that provide our medical care. In other words, let’s go directly to the source and avoid any intermediaries.

Under a system whereby hospitals and clinics offer health insurance to those in their communities:

1. Medical facilities could cover their overhead through monthly insurance premiums. As it is now, hospital administrators, some of whom I have interviewed, say they can only hope to admit enough adequately insured patients to cover payroll and operating expenses. A consistent and predictable revenue stream would allow such facilities to staff adequately, pay better salaries, optimize medical equipment and operating efficiencies — and provide better health care.

2. The cost of coverage would be lower than most health care plans (whose corporate entities are beholden to a long list of financial beneficiaries, from brokers to marketers to hungry investors). For example, if the overhead for a facility is $5 million/year, 5,000 insureds could pay $85/month to sustain the operation. Implementing a co-pay or including more members would further defray monthly premiums. Each medical facility would be free to develop its own agreement with the members of their community.

3. Affordable health care would generate savings — not only for individuals, but also for businesses and local government units. This would help control local taxes and create a better climate for the economy. And as Thomas Friedman said in The World is Flat, “Anything which can be done to reduce a U.S. company’s liability for medical coverage would be a plus in keeping jobs in the U.S.”

4. Under this plan, health care would finally be affordable to the previously uninsured or underinsured.

5. By gaining control over their own revenue stream, participating medical facilities could address needed improvements in health care standards and delivery, improving patient outcomes while sustaining their own business viability.

While the coming months will bring a steady stream of discussion (and plenty of rhetoric) on heath care, keep in mind the prescient words of another well-known Friedman. Milton Friedman said, “Two simple observations are key to the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own.”

By: Tom Obst