Dr. Len Nichols appears, at first glance, to be a reasonably unremarkable fellow but appearances can be deceiving. In fact, Nichols is one of those fortunate mortals who gets paid to think (which, parenthetically, is my idea of a really great job). I didn’t think to ask but I’d guess that Dr. Nichols is much in demand these days. He is a health care economist and director of the Health Policy Program at the New America Foundation. Dr. Nichols initially brought himself to my attention a couple of weeks ago during a roundtable discussion on health care and small businesses, convened by the Senate Committee on Small Business and Entrepreneurship, when he mentioned that a new business model was needed in order to reform the health care marketplace in a way that works for patients and small business owners.

Right now, health insurance providers make money by collecting premiums and then working to arrange matters so that they don’t have to pay out on claims. The simplest way to do that is to avoid insuring people who might need to file claims. The best way to fix the system, according to Dr. Nichols, is to rearrange the rules to take the profit out of avoiding sick people, so that the financial incentives for insurance companies happen when they keep people healthy. Once insurers are required to insure everybody, the only way available to them to avoid paying out claims will be working to keep their policyholders healthy. It sounds wonderful but, of course, the big question is whether or not it will actually happen. In spite of the efforts of the anti-reform crazies, Nichols predicts that there is a better than 50% chance that health care reform will happen during the 111th Congress. (You can listen to a podcast of the full and fascinating interview with Dr. Nichols when it is posted later today at the Microbusiness News Briefs Podcast web site.)