A lot has happened since my last writing. The people of Massachusetts voted to fill the Senate seat left by the death of Senator Edward Kennedy last year. In the hush of the voting booth, the people spoke loudly and clearly, electing Republican Scott Brown by a 5-point margin, 52% to 47%, over Democrat Martha Coakley in a state where Democrats outnumber Republicans 3-to-1. The vote made headlines across the nation because it was in large part a referendum on the health insurance legislation pending before Congress.

Scott Brown made health insurance reform a central issue in the campaign, vowing to be the final vote needed to block the passage of the health care insurance bill in the Senate. The people of Massachusetts heard that pledge and gave Brown a resounding, “You go, Senator No.”

Now, the president has invited Republicans to share their ideas about health insurance reform at a meeting to be held February 25 and televised by C-SPAN. This meeting has all the signs of being nothing but political theater. You can almost hear Admiral Ackbar screaming, “It’s a trap!” Nevertheless, the Republicans have little choice but to attend the health insurance reform meeting and put forward their own suggestions for health insurance reform. I suggest they show up with a new negotiating option: Superfunds.

Malpractice superfund. Pass meaningful torte reform that insulates doctors from gigantic malpractice awards that drive malpractice insurance rates up and force doctors to order batteries of unnecessary tests just to protect themselves against lawsuits. Freeing doctors from practicing defensive medicine will go a long way toward controlling—even decreasing—health costs. This idea isn’t new, of course, but Republicans could give it a twist in the name of compromise.

Democrats will not abandon their trial lawyer constituency nor their parade of victims of the rare but dramatic malpractice injuries, so Republicans should not insist on capping malpractice awards outright. However, they could suggest that the government—i.e. taxpayers like you and me—pay any malpractice award over, say, $1 million dollars. We’re all in this together, right? Doctors would still need malpractice insurance and they would still face financial penalties for carelessness, but a $1 million limit on the amount private insurers would pay would drive malpractice insurance costs down, ultimately benefitting the health care consumer.

Meanwhile, trial lawyers could still earn their exorbitant fees by winning $10-, $20-, or $30-million lawsuits. The difference is that the taxpayers would be on the hook for the malpractice awards. This might make judges and juries think twice before making such awards in the first place, but whether it did or not, it would be a cost-effective way of driving down healthcare costs. Really large malpractice awards are few and far between, but their effects on the actuarial reality of malpractice insurance are huge. In addition, having government assume the cost of huge malpractice awards would be extremely transparent. The tax dollars in the malpractice superfund could only be used for one thing: paying malpractice awards. Everyone would know where the money is going. The cost of the program would be far less than the current proposed legislation. Keep in mind, it would take one hundred $10 million malpractice awards to equal just $1 billion. The savings from lowered malpractice insurance rates and less defensive medicine being practiced would be in the tens or hundreds of billions of dollars. Proponents of health insurance reform love to point out that Americans pay more for health care than any other people in the world, but they neglect to point out that a large chunk of what we pay is for defensive medicine.

Uninsurable superfund. I have suggested this before, but it bears repeating. President Obama and the Democrats make it sound like health insurance providers routinely deny coverage to people because of pre-existing health conditions. This is false; as a matter of fact, the vast majority of people with pre-existing conditions are covered with no waiting periods because they are part of group health insurance plans, which by law cannot delay or deny benefits because of pre-existing conditions.

Furthermore, those who are over 65 and qualify for Medicare cannot be denied benefits for preexisting conditions; nor can the poor who qualify for Medicaid; nor the young who qualify for S-CHIP, Health Families, and other programs; nor anyone connected with the U.S. military. The only people facing exclusion from insurance based on preexisting conditions are non-military people over 18 and under 65, too well off to qualify for Medicaid, not covered by an employer or other group insurance, and who also has a serious preexisting condition. How many of these people are there?

In the vast majority of cases, these unfortunate few are not denied coverage outright. They usually have a waiting period prior to receiving benefits. But once the coverage kicks in, it stays. Republicans could offer a safety net to those who really are denied coverage by paying their medical bills directly through an uninsurable superfund. Again, we would find out exactly how many people there are who fit this category, and the program would be extremely transparent. The money could only be used to insure the uninsurable. Whatever the program costs, it will be a lot less than the current reforms will cost. It will have the virtue of controlling health insurance rates by preserving the actuarial integrity of private health insurance. This measure would end the debate over the uninsured without threatening those who do not care to have insurance with fines and jail time.

Our health care system works pretty well. Its costs can be controlled by creating government superfunds that will preserve the integrity of private health insurance while protecting real victims of malpractice and those who are uninsurable.