2013-11-06

Steal This Idea - A Creative Solution For Health Care

Pre-Paid Health Care
Let's say you're in a high-risk category for a particular medical problem - let's say breast cancer, for example - but you're still young. You know you'll probably need a mastectomy, but not any time soon.

One option you have is to just start saving your money for the inevitable. Another option is to load up on health insurance. The problem with these options is that you end up paying more than you have to. In the first case, you put money away and lose it to inflation. In the second case, you spend a lot of money on premiums well in advance of ever having to make a large claim against your policy.

What if you could buy a coupon from the hospital for pre-paid health care? "Good for one mastectomy" sounds stupid, but it's really no different than buying a stock option. Your coupon has a certain book value or you can redeem it for services. This way, you hedge against inflation while still committing to the purchase of the almost-inevitable surgery.

Other potential benefits of this idea might be:
  1. Hospitals can sell these coupons to increase their cash revenues without having to raise prices for services. This is good for hospitals because it's more revenue. But it's ALSO good for patients because it keeps costs down.
  2. Coupons are transferable, so if you find you don't actually end up getting the mastectomy, you can give your coupon to someone who needs it.
  3. Further to point #2, this implies that such coupons could be a reliable savings vehicle/financial instrument. They could be traded on the open market. A person could swap a mastectomy coupon plus some cash for a gall bladder removal. 
The whole thing would work a lot like whole life insurance policies, but whereas whole life insurance is nontransferable and illiquid, pre-paid health care would be transferable and slightly more liquid.

Or, is there some obvious problem with this that I am missing? Please share your thoughts in the comments.