Donald J. Trump
President of the United States, White House

cc: Alex Azar Sec HHS
Jerome M Adams, Surgeon General
Russel Vought, OMB

Mr. President for the past several years you have been working to bring a new a healthcare program to the citizens of the United States. Having spent over 22 years in the healthcare industry, both with medical devices and pharmaceuticals, R&D, Manufacturing, Quality and Regulatory Affairs and dealing with multiple government agencies, and several significant healthcare issues of my own, I’d like to offer a solution for healthcare based upon my background in the technical side of the healthcare industry and in the business and economics of a regulated and exploited healthcare system.

The program is based upon the healthcare system that your parents enjoyed in the 1960s and early 1970s: I call this “Back to the Future”.  

You may remember that your parents paid out-of-pocket for most of your healthcare, whether it was a routine visit to the doctor or even a house call, yes, they made house calls back then. And for major medical expenses they had an insurance policy that covered those emergencies and hospitalizations.

So how can this work today, very simply, if you check into any hospital today and offer to pay cash, hospitals will typically give you a discount of over 40% on all charges. I know this because two years ago I had the experience to fill out those long financial responsibility forms, and right up front was the offer of that 40% discount. I then inquired if that discount is available from my personal physician, and to my surprise he said most definitely he would rather take cash then insurance.

That is the kicker, insurance adds tremendous costs for everyone, the private physician, the hospital, the attending physicians, and everything they do throughout the medical chain. The numbers are quite simple for how a cash system would work. 

In California, a healthy family of four picking “Covered California Healthcare” the state’s Obamacare Exchange, will pay an average of $800 a month premium and have a $6200 annual deductible a total cost of $13,200. That same family will probably visit a doctor’s office no more than 24 times during the year, and even that is an extremely high number. If they have no major injuries, surgeries, or hospitalizations they are paying $550 per doctor visit before they get any benefit from the insurance.

For that same doctor visit, my doctor bills the insurance company $125 plus takes a $35 co-pay. If discounted by 40%, it is a $96 net cost, that is what I will pay if I use no insurance. With a high deductible insurance plan, I would be paying $160 out-of-pocket for each of those visits.

For that same doctor visit, my doctor bills the insurance company $125 plus takes a $35 co-pay. If discounted by 40% it is a $96 net cost, that is what I will pay if I use no insurance. With a high deductible insurance plan, I would be paying $160 out-of-pocket for each of those visits. And at years end, never having met the total deductible amount. The cycle starts over on each January first and all you have is a pile of receipts for over $13,000 from the previous year.

So how do we make this work. Mr. Jones insurance premiums are $13,200 a year, he gets nothing back for his family if they don’t use it all, and it’s a good thing that he doesn’t, he has a healthy wife and children. So, if he were to visit his same doctor, who is now discounting for cash, those 24 times, he would have a total charge of just under $2400. This would be a net savings of $10,800, and he would have the same care and the same doctor. I think we heard that before, but it did not work out that way. If it becomes a cash system of doctors and health care facilities everyone saves.

So, what about those major illnesses, injuries, and surgeries, and how do we fund Mr. Jones and how do we set up accounts and controls. The mechanisms are already there in what is called Health Savings Accounts, I call them Health Losing Accounts because at the end of the year those dollars you set aside are gone, if you don’t use them, you lose them, every penny. So, besides his $13,200 a year premium and deductible for his California style Obamacare, he set aside $2000 for the Health Savings Account, and if he only used 50% of it, he spent another thousand dollars on his healthcare. Some states now have some limited rollover accounts with limits.

I would think that Mr. Jones or his company, who may be providing his healthcare premiums, and a much lower deductible, that are spending on average $16,000 a year per employee, would be very happy to fund Mr. Jones Health Savings Account for say $4000 a year, providing an additional buffer.

The major medical costs, those hospitalizations, the injuries, the surgeries would be paid by a company funded or individual funded pooled National Major Medical Hospitalization program. Again here Mr. Jones, if he is privately employed would contribute a modest amount say $3000 a year to fund this program or his company would contribute the same amount or maybe more to that fund. Again, the fund would pay the discounted hospital bills directly, at a significantly lower rate than those provided by insurance today. 

Several other things must happen to make this program work. The Health Savings Accounts would remain tax-deductible and rollover from year to year with no penalties or losses. Secondly, an electronic debit card would be provided for everyone’s accounts, which would restrict healthcare payments to approved discounted plan members and eliminate any fraud or waste in the system. 

I would think that companies and individuals at several government agencies would welcome this alternative system as would reduce our national healthcare costs significantly, as they are some of the highest in the world, and reduce them to a much more reasonable level. 

And in addition, it would place the responsibility for healthcare back between the patient and the doctor, taking the insurance companies out of the equation. Another benefit of the system would be as the individuals age their children leave home, they would start their own healthcare savings programs. 

Surplus unused contributions would be saved in the accounts, providing more dollars for quality healthcare as they age into retirement. A good option would be to place these funds with major financial institutions in secured interest-bearing accounts, to further enhance the values of the dollars they are setting aside for their healthcare.

Mr. President, as an extraordinarily successful businessman, you understand the value of a dollar, the ability to get the best deal and utilize your money wisely. During the 1980s and 90s insurance companies and the health care industry drove costs through the ceiling, increasing rates of 15% to 20% per year, when inflation was only 2% and 3%. This may seem simplified and it actually is, and if you were to look at one particular major healthcare company headquartered in New Brunswick, New Jersey with over 150,000 employees they use this principle to save huge amounts of money and provide outstanding healthcare to both active and retired employees.

Thank you very much for your time, I would welcome the chance to work with you and members of your staff on putting together a detailed plan for changes to our healthcare system that would be a phased-in approach during the four years of the second term of your administration.  

With best regards,
James McCay
Global Technology and Pharmaceuticals