Monday, June 29, 2009

A single transactor system

The Observation: A single transactor system is better.

If a provider must collect from the patient their expenses will be higher than if they collect from a single payer. This seems like the easiest way to save some money relatively quickly.

The Proposal:

Suppose that all money paid to health care providers for any professional service had to go through a single agency charged with the task of maintaining the records, protecting the identities of those involved, and ensuring that each provider's prices are consistent and independent of the source of the payment. (Not trying to set prices, but ensuring that the same service isn't billed at multiple prices.)

My Reasoning:

Most importantly it promises to lower costs by removing the burden of collecting fees from providers. It gives them the ability to discover the prices and ratings of their competitors which might also encourage them to be more competitive. And it assures us that all issues or complaints with any medical procedure will be funneled through a single agency allowing the highest degree of quality control.

It forces all providers, insurers, and other payers to register with the paying agency allowing them to establish the computer connections necessary to ensure the process takes place automatically, that the patients records are maintained in a standardized and secured place, and that those records are complete with respect to each transaction that takes place. It ensures that an accurate record of what each taxpayer spent on health care is available for tax preparation.

By establishing a single database of all medical procedures researchers can find trends and correlations that enable more preventative medicine to take place.
  • It allows for control over how much information insurers can know about those they insure making it harder for them to illegally cherry pick clients by canceling the riskier or more expensive ones. Once a company has registered their coverage it's up to the regulators to decide whether they should even get to know which of their clients needed it. It prevents the insurers from bullying individuals entirely, since everything must go through the transactor they'll have to treat all of their customers the same way.
  • It allows entrepreneurs access to the information they need to to find out where the greatest need for innovation exists and where their efforts are likely to pay off most.
  • It gives ordinary people access to a great deal of completely unbiased information in choosing between providers and insurers and gives them a reasonable idea of what it would cost them to self insure. Combined with a mechanism that allowed people to borrow some multiple of their prior years tax return for payments made through the transactor it could help people avoid finance charges for unexpected health expenses that break their budgets.

Related Video Clips

(I am not affiliated with any other these organizations in any way. The links are provided here as supporting testimony.)

Patient Privacy Rights is a 501(c)3 non-profit organization located in Austin, TX. Founded in 2004 by Dr. Deborah Peel, Patient Privacy Rights is dedicated to ensuring Americans control all access to their health records.

Glenn McGee on Health Data Chips on Prime Time with Erica Hill

Device connectivity should enable a single source of truth for patient data.


  1. Interesting idea...

  2. Excellent and thoughtful material. The single transactor system indeed solves a large amount of the problems we experience today.

    We would need a something written into the by-laws that mandate a published yearly audit (something similar to the 10k report for public companies), for the general citizen.

    Just as a measure to help prevent collusion with the Transactor by pissed-off "Ex-Uber Insurance" corporations, lol.

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