Waiting for Barack
I’ve been waiting for more than a year for the President to tell us what he wants in a health reform plan. And with waiting comes hope. After all, the President didn’t sound like Reid or Pelosi when he campaigned for office. He sounded centrist, bipartisan and reasonable. Plus, there are reasonable people advising him. Orszag and Summers, just to name two. Still, along the way the questions have been nagging. For example, with respect to the House and Senate bills, I have been wondering:
- Will he junk the idea of paying for half the cost of health reform with $500 billion in benefit cuts for the elderly?
- Will he jettison the arbitrary and unfair tax subsidies that give $30,000-a-year families less than $2,000 of tax relief for insurance at work, but more than $13,000 if they enter the new health insurance exchange — a tax system that will almost certainly lead to major restructuring of American industry?
- Will he give up on the attempt to force employers of low-wage workers to spend more than $14,000 (half their salary!) on health insurance — an effort that will almost certainly lead to massive layoffs?
- Will he abandon the proposal he accused Hillary Clinton of backing in the presidential election campaign: “You want to force people to buy something they cannot afford, and then when they don’t buy it, you are going to tax them.”
- Will he endorse the principle that all taxpayers at the same income level should receive the same tax relief for health insurance, regardless of whether they belong to a labor union or that all seniors in Medicare Advantage should be treated the same, regardless of where they live?
- Will he reject the billions of dollars in hidden taxes on everything from wheelchairs to medicine cabinets?
- Will he remove the economic incentives employers will have to drop health insurance coverage that millions of workers now have?
- Will he get rid of the incentive families will have to give up their private health insurance and enroll in Medicaid (rationing-by-waiting) plans?
- Will he resist the one-premium-for-all philosophy that will unfairly penalize the young and the healthy — people who most need encouragement to obtain insurance?
- Will he reject the idea of health insurance exchanges with artificial prices that will encourage health plans to overprovide to the healthy and underprovide to the sick?
- Will he forego the CLASS Act ponzi scheme parading as long-term care insurance?
Finally, at 10:00 am this morning, the wait was over.
Waiting for You
And the answers to my questions are…..no, no, no, no, no, no, no, no, no, no…..and…..no!
Okay, time out. Take a deep breath. Run around the block. Do some sit ups. Then come back for…..more depressing news:
- The White House plans to impose the Medicare payroll tax (2.9%) on capital income! (Interest, dividends, annuities, royalties, and rent which is not otherwise “passive.”)
- The White House wants a national health insurance price-fixing body to approve rate hikes! (Despite evidence that state price-fixing leads to more uninsured, not less.)
- And, the White House wants to criminalize virtually every aspect of Medicare! (Even thinking about how to game the system could make you suspect.)
Full summary of the President’s plan here.
Here are ten changes for the President to consider if he wants broad bipartisan support for his health reform plan.
It is a little difficult to think of President Obama’s plan as serious proposal. It is little more than a slightly modified version of the Senate bill, passed on Christmas Eve. The CBO has not scored it because there are not enough details included in the proposal.
I wonder if this isn’t President Obama’s idea of a place to start the bargaining? He can claim to be starting over from scratch, when he’s really championing policy proposals that were already rejected by the GOP (and a majority of the American people).
I understand from other sources that this so called improved version of the Health care bill is going to be attached to a budget bill and will need only 51 votes from the senate. Doesn’t sound like a bipartisan bill to me………….just more of the same with fewer senators to appove to get it passed.
The issue is that the government isn’t listening to its constituents. I hear the drum beat of the Tea Party growing louder. http://www.ilovebenefits.wordpress.com
This is the same proposal, the same tax hikes, the same claim that it decreases the deficit – but first it raises taxes. Isn’t this transparent to people?
And what about tort reform?
You’re wrong John. This is immensley different.
Instead of using “subsidies” to help low income Americans buy insurance, the president will use “tax credits.”
How are the two different? The spelling… and I’d assume that he thinks it will be harder for a Republican to call an unfunded subsidy a bad idea if it’s called a tax credit.
this puke obama just wants everything his way and the hell with anyone else….
How can they even consider what plan should be approved without talking about the details of what it will cover? What about the co-pays and deductibles? How can Obama say it will expand Medicaid/Medicare when they are ridden with fraud and the service providers are so poorly reimbursed? That’s a primary reason why private insurance is getting more expensive, it’s the cost shifting to those who can pay for services by having health insurance.
John, whatever happened to the very basic “separation of powers?”
I am stunned that President Obama is now running the congress. This “healthcare summit” is nothing but an “end around” the Constitution. Obama must recuse himself from the debate. The Constitution does NOT grant him the power to act as a legislator.
The republicans should show up at the summit with a prominent constitutional attorney in tow. Before the meeting, he should serve the President with a restraining order demanding that he immediately leave the meeting since he is not a member of the Senate or Congress.
Marti Settle
Denton, Texas
As a practicing physician who recognizes the profound need for re-engineering of the health care system, I find your input to be a refreshing change form the standard divisive rhetoric of both sides on this issue.
I read your version of health care reform and you are correct on most if not all accounts. The problem is that there is no structure that could facilitate your suggestions. In addition, although your suggestions will improve the delivery of care and reduce costs, you do not mention how we can cover the poor, uninsured and underinsured. I am interested in hearing your input on this.
Unlike many of the writers on this blog, I think that Obama is very intelligent and well intended however the current proposal has its problems which you have articulated plus some additional problems that I see which you have not mentioned. During his recent speech, Obama stated that if anyone has a better plan, let him know. As it turns out, I have a better plan that I have been vetting for 16 years. My plan appeals to conservatives and liberals, covers all Americans, and provides a framework for implementation of changes like you suggested in your blog which will reduced costs and improve quality, plus it will stimulate America’s economy.
Unfortunately, when Obama told the nation to let him know if anyone has a better plan, he forgot to tell us how to reach him.
John,
President Obama knows exactly what he is doing. I believe that the Republicans should take a stand now. They should not attend the meeting, unless Obama is more specific about Reconcilliation with only 51 votes. If they do not take a stand now, what is to prevent President Obama from pushing all major legislation with the need for only 51 votes? What he is doing is unlawful, and I as an American intend to fight what he is doing. Thank you for your article.
Delores Smith
Delores109@cox.net
I agree with Dr. Blanchet. Good job, John.
Agree with Tom and Dr. Blanchet. Great job NCPA!
There is no new plan here. This is a regurgitation and mixing of two old plans.
Why is Obmam bothering with this? It’s an awful bill, the public hates it, and if the Democrats persist, the voters are going to retire them.
Obama only wants to control health care not pay for it. We and future generations will pay for a large bureaucratic infastructure bent on control of our rights as citizens to choose our own doctors and treatment options. As a senior now stuck with accepting Medicare and the gaps, it is no less of a concern that we over age 65 will be gradually forced out of what we paid for in the last 45 years since Johnson started collecting for Medicare.
This is merely one more step to his master plan to take away our freedoms. He wants a regime much like Hugo Chavez enjoys.
His bill is 11 pages long, except that it is really the 2,700 pages because the it is largely the Senate bill. Rather than start over, his starting point is to make the bill more expensive. Leader Boehner has made it clear that they have not adopted their ideas and certainly not bent the cost curve. The issue is not how much health insurance costs, it is how much health care costs.
In my opinion, what this President (who, by the way, has still refused to provide Constitutionally acceptable proof that he is eligible to hold this high office) is doing, in regard to this so-called (and still-morphing) “Obamacare” plan, is outrageous, abominable, and dangerous — not just because there are apparently better healthcare-policy choices available, and not just because there are better and more ethically-just ways to conduct the nation’s business — such as by listening to the will of the People, and being open and honest about what’s really about to hit the fan — but also because this proposed plan, at its core, will be a disaster for the nation, for the health of the American people (especially seniors), and for the Constitutionally-protected but fast-disappearing – and irretrievably precious – freedoms of every American citizen:
“Obamacare” is laden not only with a maze of cleverly obscured, complexly labyrinthine, buried-in-lawyerese interlocking provisions that will do much the opposite of the grand promises that Obama is proudly touting.
Worse, the plan is founded on a frightening shaky and, in my view, un-American — and unConstitutional — set of destructive mandates that will potentially CRIMINALIZE every American business and EVERY AMERICAN CITIZEN.
THAT is REALLY scary.
This is not so much a so-called “healthcare plan” as it is a monumental SHIFTING OF POWER – TO the Federal bureaucracy and AWAY FROM the American PEOPLE.
Yes, we do need a better healthcare system for the United States. Absolutely! But, I submit, this current “Obamacare Plan”, at least in terms of key elements of what’s been publicized about it , is not the way to do it.
Somebody please tell me:
How is it Constitutional — and how is it a sign of a plan’s alleged workability and popularity — if a PRIMARY BUILDING-BLOCK UPON WHICH THE PLAN’S OPERATIONS ARE BASED is a REQUIREMENT that DEMANDS – UNDER PENALTY OF LAW – that people MUST BUY A PRODUCT (e.g., a “health insurance policy”) ?
And that, if they refuse to buy that product (which, at least according to the United States Constitutional, they should have the right to refuse to buy) – or even if, for personal reasons, they just can’t buy that product – THEY WILL BE SUBJECT TO SEVERE PUNISHMENT FROM THE INTERNAL REVENUE SERVICE AND BE SUBJECT TO A POSSIBLE PRISON SENTENCE?
This is part and parcel of how tyrants – and legislators and bureaucrats who have forgotten how to inspire the voluntary backing of the people – operate: “the People” don’t know what’s good for them, so FORCE them to bend to your will — and create IMMENSE HARDSHIPS (or worse) for them if they dare resist.
How can this so-called “Obamacare Plan” be in the People’s interest if the plan itself sets the People up to be criminalized for rejecting the Plan and its unConstitutional mandates?
Seems to me that something is extremely wrong here.
Craft a “healthcare plan” that has the backing of the People, i.e., of at least the great majority of the American people, and people will WANT — VOLUNTARILY — to sign onto the plan.
That’s how democracy is supposed to work – and that’s the greatest guarantee that a decent, popular, plan will have the best chance of working and even of gaining in popularity.
It’s even how Obama himself got elected to the Office of President: at least for the majority of those voting, he was popular — they WANTED to vote for him. He did NOT get voted into office by THREATENING voters with FINES AND JAIL-TIME if they did NOT vote for him. Guaranteed that if he had dared issue such a threat during his election-campaign, he would have been run out of town on a rail – fast!
So why is he now pushing a plan that, if enacted into law, will potentially CRIMINALIZE every American who opposes what they see as its freedom-destroying, healthcare-damaging, unConstitutional aspects, especially its MANDATE that they MUST BUY A PRODUCT OR FACE SEVERE FINES AND JAIL-TIME FOR NOT BUYING THAT PRODUCT?
This, of course, is aside from how this “Obamacare Plan” — which may have started with legitimate high ideals — has morphed into a labyrinth of smoke & mirrors in which lurk a myriad of dangers — including, most disgustingly, as I see it, a ripping-away of $500-billion from an already weakened system of Medicare upon which the nation’s seniors are forced to depend.
Somebody please tell me, what kind of a person would do — and is doing — these things? How could they even CONTEMPLATE doing such things?
And what kind of person — and what kind of legislators — would do these things WHILE CONVENIENTLY EXEMPTING THEMSELVES FROM HAVING TO LIVE UNDER THE SAME PLAN — THIS PLAN — THAT THEY WANT THE REST OF US TO LIVE UNDER?
Doesn’t that tell us something about what is REALLY happening here?
Well said, Protonius. If it were only about giving healthcare to every American, the govt could issue a healthcare debit card at about $5,000 per person (that’s what it costs me to purchase KaiserPermanente health insurance for a year) and we could use it how we want to — acupuncture, massage, chiropractic, dentist, botox — and the smart people would buy health insurance with it. This would make the insurance companies more competitive to try to get our business. End of story. You need just one bureaucrat in an office printing out these debit cards.
but it’s not about giving more or better care — it’s about control. Google “government healthcare” and you’ll already see there are programs in every single state to provide health care for those who can’t afford it now.
Our healthcare is NOT broken — it’s the best in the world…at least, for now!
I’m tired of the rhetoric and politicing, the skirting around the Constitution and the blatant arrogance of our Commander in Chief. It should be clear to every American who gives a damn that this man and his czarist government is out to control as much of the economy as possible, and health care if a big ol’ helping of this economy.
God knows this man has stirred up a massive amount of anger in this country. Check out one of his latest moves, i.e. appointing Rashad Hussain, a Muslim, to serve as his Special Envoy to the Organization of the Islamic Conference (be sure to Google his name and the word “liar” and/or “terrorist sympathizer” to learn more about him). Also, Google “Muslim interpreters try to poison food supply at Fort Jackson,” something I bet most of you heard nothing about on the national news.
In my opinion, this inexperienced, progressive, racist, narcissistic human being who lied his way into the White House on the coat tails of a very unpopular Republic, G. W. Bush, needs to be taken out of office. The damage he has done in one year will pale in comparison to the damage he intends to do and likely will do if he remains in office for another three years. It’s time for a new Congress who has the kahunas to instigate proceedings for impeachment imo. I, for one, have had it with this hope and change garbage. I want no more change I can bereave in.
God bless America and those who fight for their right to be free.
I totally agree with Dr. Birch. I do not want Obamacare, nor his ‘change’ in any way. I want a change in leadership. I cannot understand why impeachment has not been called for with all of the actions he has taken that have hurt America. Bowing to a foreign king, apologizing for America protecting ourselves against enemies, refusing to provide his birth certificate, the list goes on and on.
Dr. Birch
AMEN!….BROTHER. This man ( Obama ) is out to destroy our country, he is a Communist and an anti American. The truth be Known I wouldn’t be surprised if hes not a Communist agent, who has been trained and indoctrinated from a very young age, just for this very purpose. I mean if you google ( Obama’s mother a communist ) you will find all kinds of very scary stuff. and you will see how she was a devout Communist sympathizer, and from very early on set her self on a so called ( holly cause ) which was some how to destroy Americas way of government, and our way of life. If this man remains in office one more term, I promise you as there is a god in heaven, he WILL!! destroy this land, and every thing so many generations of Americans have fought and ultimately laid down there lives to protect and maintain. We not only owe it to the past generations, but we also owe it to our selves and the future generations of Americans, our children and grandchildren, to stand up and fight for our freedoms and Liberties. In the words of Benjamen Franklin when he said:
” TODAY I MUST STUDY THE ARTS OF POLITICS AND WAR,
SO THAT TOMARROW MY SONS MAY HAVE THE LIBERTY TO
STUDY MATHIMATICS AND PHELOSAPHY.
This means that we the generation of today, have a responsibility to the next generation of Americans, to pass on the very freedoms and Liberties which was passed down to us by past generations. I have always maintained:
TO BE BORN FREE IS TO BE LUCKY
TO LIVE FREE IS A RESPONSABILITY
TO DIE FREE IS AN ACHIVMENT
I wonder how many Americans today, when there time of departing this world comes, will be able to claim that achievement??
MAY GOD BLESS AMERICA….OUR MOST DEAR AND BELOVED COUNTRY…AND MAY HE PROTECT HER FROM HER ENEMIES, WHO ARE NOW POISED AND READY TO DESTROY HER…AMEN.
Could it be that the United States of America that we were led to believe is actually a Corporation. I believe it is a foreign corporation and the Constitution really doesn’t apply. Look up 28 United States Code 3002 (15) (A). I hope this gets through so all the viewers can see what a hoax we have all been led to believe in. I found it quite amazing. Read this code and draw your own conclusions.
MJH opinion with solutions to Heal USA health care-
How
We the people want Health
For the people
By the people
Ask/tell the government to allow us -we the people the opportunity to solve this crisis – let the government solve the financial and job crisis
Enable everyone to own, purchase and select their own personal health insurance by simply “No taxes” on Health Care Insurance or medical expenses- Make personally owned Health Insurance Mandatory for everyone in the USA – even “visitors” and illegals through organizations such as Heart and Cancer Associations, Mensa, Mexican American Groups and Unions. All profits go back to the organizations.
This will encourage people being more intelligent through education, responsibility and involvement when provided the ability and responsibility to make personal choices regarding health care, it’s providers and coverages.
In my opinion also by allowing bartering of services by the individual or family members to help pay premiums if the policy holder is unable to make adequate income due to illness or loss of employment
I was told this idea although logical will never happen because the plan is for Big Government to Control USA.
Our government has been chipping away at our fundamental rights under the constitution since the beginning of the 20th century, and if America doesn’t wake up and take back the country, our lives are going to be completely government-controlled, not the other way around. This current healthcare plan is just the tip of the iceberg under the sea of the erosion of our freedoms that has been going on for decades! WAKE UP, AMERICA!!
What I don’t understand is how you can have a serious discussion of ideas to improve health care without including ANY congressmen who have medical backgrounds. Wouldn’t their knowledge and experience be invaluable?
I was not a big fan of Patrick Moynihan, but I agree with a statement he made once and was recently published on the web: “You should never pass a major piece of legislation without broad bipartisan support.”
I think that is something that every person working on Health care reform should take to heart and very seriously. I feel all the bills that have been touted to the public are cobbled together pieces of ‘pork’ that are not going to benefit one person in the general American public whether they are rich, poor, insurance holders, non insured, sick, well or any other label you wish to put on them. It’s so terrible and sad and I’m sick of writing letters and talking as no one in Washington seems to be listening at all – they have their ears turned off. Nancy Pelosi, Harri Ried, Mr. O, Mr. B, and all the rest are off on their own glory/ego trips and do not give one whit of care for those of us out here trying to make a living and keep our families safe.
How do we get this man who is out to destroy our rights to chose our physicians, get a mammogram? and who is out to take away our elderly’s benefits and healthcare. In Canada, if you have cancer, and cannot pay for your care by cash, you wait on a list, they give you pain meds and you die.
Obama may have charmed his way into office, but so did Lucifer.
The above comments from those who know what is in this bill must be listened to and taken seriously.
I am a Senior,but a futuristic one which means I have taken responsibility for my own health as much as possible. “Your plate is your fate” so I watch what I eat, exercise, try to stay out of stress through prayer and meditation, take foodsupplements, and have stayed out of hospitals (except for colonoscopy). I am in my 80s and very active with many activities..
My plea is don’t let the above bill be passed as it is.
Thank you.
I didn’t know we were living in a dictatorship, when senator Dodd said “either join us or get out of the way” . That sounds exactly like Hitler .
I didn’t know we were living in a dictatorship! When senator Dodd said ” Either join us (democrats) or get out of the way.”
My wife and I are in our 70’s and like many of you have hated this more than gradual loss of our fundamental liberties. And we definitely do not want this Obama Health Plan.
All the talk about Healthcare, Cap and Trade, Company Welfare, and on and on. This country is at a crossroad. It doesn’t matter if we turn left or right. Either way takes this country down, one faster than the other. This is a simple plan to restore or country. It will require the American people to work harder to restore Americas might and credibility. Heres the plan, through out every law made after 1860 and start over, using the Constitution as it was first written. Lets see if after that point was helping America, well we had a civil war, WW1, WW2, Korea, Vietnam, Lebanon, Iraq 1 and 2, Afghanistan. We had 5 major melt downs of our economy during this period. I don’t see were these laws made this country better. In-fact, after 1915, when the Progressives really came to life, those laws passed from that point on really have destroyed our nation. So, I say we start over.
I agree with many of the threads above; especially Dr. Birch, Mary Jo and B. Kerr!
To Tigerlilly, and all, I say this; All the elected Republicans who showed up for this Health Care Summit meating were in fact, used as ‘props’ for the Obama illusion of a bi-partisan discussion. In no way did he even entertain the thought of having any one there who really knows the Health Care enviornment to shed light on this complex topic. Although I do remember hearing from one of three Doctors there who shed light on the ordering of labs to protect themselves and not for the benefit of the patient! All for the practice of defensive medicine… a CYA approach.
This being one of the pots of gold to seek out and change. The first being Medicare fraud, saving $15 billion.
Obama could really care less. We all saw him staring at the Rep.s while they gave there thoughts, intently, to intently to seem sincere, when all along it didn’t matter what came of this meeting, HE’S GOING TO RAM THIS SO CALLED HC BILL THROUGH WITH RECONCILIATION, as he stated in one of his closing statements!!
This is not a HC bill, but is truly a power grab toward Socialism! The kind President Ronald Reagan warned us of way back in 1950 or 1951.
If we cut all the “free” medical care we give illegals in the US we wouldn’t have to cut the care to seniors….How about taking care of citizens?
The Medical Clinic where my husband and I attend is one in which the Dr.’s there had a meeting and Our Dr. told my husband that “If the plan passes, we won’t have a Dr., as two thirds of them vow to quit.
I find this plan (for all I can get from it ) will not meet the needs of the people.I cannot see the answer anywhere as yet.
I agree with Dr. Birch. Pretty sad situation.
Blast away people. Our President is a lier. expect the worst from him, as that is what you are going to get.
Healthcare reform: a solution for all parties
As I begin writing this, the healthcare initiative proposed by the Democrats in Congress is on the ropes. It has lost its liberal basis of support because it does not address many of the major tenants that proponents of reform deem necessary. It has not garnered the support of conservatives because (although it claims to be otherwise) it will not be budget neutral and will increase the federal bureaucracy rather dramatically. The election of a moderate Republican to fill the late Ted Kennedy’s senate seat provided the symbolic coupe de grace for the current health care reform proposal.
As a physician with 30 years experience, having seen the adverse consequences of poor access to healthcare, I am firmly in favor of re-engineering healthcare delivery in this country. That said, I am not pleased with the current proposal and fear that even if it passes, the resulting system, although arguably better than our current system, will remain very expensive and unsustainable. My greatest concern is that passage of the current proposal will drain such resources that meaningful reform will be stymied for another generation.
Over the next paragraphs, I will describe why I feel that re-engineering of healthcare is essential, discuss the flaws with the currently proposed solution, and propose an option that should meet the needs of the majority of informed parties, and at the same time provide a major economic stimulus.
Chapter 1.
Why we need to re-engineer healthcare delivery.
Universal Access
The most obvious argument regarding the need for healthcare reform is the issues of lack of access for too many Americans. This not only is a national disgrace that poor Americans are dying due to lack of access to basic healthcare, this lack of access is actually increasing the ultimate cost of delivery. For instance, it is much less expensive to allow someone access to a physician to treat their bronchitis than it is to wait until they are hospitalized with pneumonia.
Paul was a 54 year old diabetic with elevated cholesterol. I first met him when he was admitted to the hospital through the emergency room for treatment of a foot infection. He had a job delivering news papers but had no health insurance. During the course of the next few months, we diagnosed coronary artery disease and he was given coronary stents for severe coronary blockage. His foot eventually healed and his diabetes and coronary artery disease were treated. Unfortunately, this was not the happy ending.
Paul could not afford his medications. I supplied what I could from samples and used cheap, generic medications when I could. He had accumulated significant medical bills. I knew that I would never get paid but assured Paul that his health needed to be our first priority and that I would survive without getting paid by him. Unfortunately his hospital bill was well over 100,000 dollars. Our not for profit, charitable tax exempt hospital gave him no quarter. He was the single dad for two teen aged boys. He knew that he could never expect to be free from his debt and that his illness would continue to cost him more than he could earn. In addition, he would never be able to get health insurance.
It was a cold and icy March morning. The canyon had areas of black ice around curves. Paul’s truck crashed into the creek and Paul died instantly. Officially this was determined to be an accident. Through death, Paul got rid of his debt and his small life insurance policy provided a way for his sons to attend college. Accident or suicide, who knows, but I have my opinion.
If Paul had been given access to healthcare to diagnose his diabetes early, we could have prevented the onset of atherosclerosis and the consequential foot infection. The system would not have spent well over 100,000 dollars to react to his problems. And he would likely be alive for his sons today.
There is a great irony in American healthcare delivery. We have determined that healthcare is a right however we have not figured out how to manage it or pay for it. “How is it that healthcare is a right” I hear you question. Here is the reality. If a homeless man without money or insurance walks into an emergency room with chest pain, he will be treated the same as if he were the mayor of the city. If he was sent out of the emergency room untreated because of his lack of financial means, he would have no difficulty finding an attorney who would sue the hospital and the physicians and certainly win a very large amount of money.
For a point of comparison, if the same homeless person went into a grocery store with no money and walked out with 6 doughnuts, he would be arrested. Under the “3 strikes” law, there is a man who is currently serving a life sentence in California for stealing 6 doughnuts. Instead of stealing the doughnuts, he should have had a heart attack; the doughnuts in the cardiac unit would have been free.
In life threatening situations, we provide high quality healthcare for all. Unfortunately, we fall short in providing basic care to those without adequate insurance or resources. If we could spend our resources in prevention and early treatment, we could improve quality and reduce costs at the same time.
Cost containment
Healthcare cost has been going up faster than inflation since 1960. In 1983, I bought a health insurance policy with a $1,000 deductable and 80/20 coverage and no pre-existing exclusions for a premium cost of $45 every 3 months. Today a similar policy for a 28 year old man would cost 16 times what I paid in 1983, providing he had no previous medical history which might prevent him from getting insurance at all. It is not rational to think that the cost of healthcare can continue to exceed inflation without it eventually collapsing from its own weight.
Why does healthcare cost so much more today than it did 28 years ago? The most comfortable and obvious explanation is that we have had progression in diagnosis and treatment of illness with the use of costly technology which results in improved outcomes and longer life expectancy. Although there is truth to this explanation, it looses some credibility when we compare our cost of healthcare and outcomes with other countries. When other counties with similar financial and ethnic demographics demonstrate comparable or better outcomes with respect to life expectancy and health quality at half of the healthcare cost of America, we must evaluate how this is possible.
The 8,000 pound elephant in the corner that no one is talking about is the fact that Medicare is destined to run out of money within the next couple of decades. Ignoring this fact will not make it go away. We knew that the levees in New Orleans were inadequate 30 years before the Katrina flood, yet we did not respond. We now know that Medicare will be bankrupt in our lifetimes and no one has the courage to even discuss this reality much less propose a solution.
Economic considerations:
Due to circumstances unique to America, the cost of heath insurance has evolved to be the responsibility of the employer. This was not an economic problem when health insurance was a small additional benefit of employment. Today, the cost of healthcare is a major financial consideration of many companies and is one factor that makes American manufacturing less competitive in an international market. For instance, how many more cars could GM sell if each car did not bear healthcare cost which in 2005 was estimated to be $1,700 for ever vehicle. The near failure of the American automobile manufacturing sector has cost the economy dearly and has cost taxpayers billions of dollars. Could this have been avoided if American cars were more competitively priced by $1,700 each? Perhaps.
As a physician, I have always felt that providing quality healthcare for my employees was my responsibility. With a large practice, 6 providers and 24 support staff, in 2007 my annual medical insurance expense was over $160,000. My specialty is Internal Medicine which is a poorly reimbursed branch of medicine with a large number of elderly and ill patients. The revenues of the practice could not meet the overhead and my practice closed. Had I not been burdened with the cost of health insurance for my employees, my practice could have survived. I suspect that I am not the only example of a small business being closed because the incremental overhead of medical insurance made the business unsustainable.
What is wrong with the solution currently being discussed?
Let me preface this answer with the disclosure that although I am politically independent and not party affiliated, I do believe that Barak Obama is a brilliant man and a skilled leader. I also believe that healthcare reform is essential for our citizens, our economy, and our credibility as an international leader. That said, I am horribly disappointed by the solution currently being proposed, and feel that any watered down version of this will likely be worse than nothing.
My biggest concern with the current proposal is enforcing employer and individual mandates for medical insurance coverage as a major underpinning for the solution. As I discussed in a previous paragraph, saddling the employer with the cost of health insurance makes it incrementally more difficult for the employer to succeed when the international competition likely has no healthcare cost. Mandating that all employers provide health insurance will cause businesses to close.
Very concerning is the fact that there are employers who have very low profit margins. If we mandate an increase in their overhead by insisting that they provide health insurance for employees, we may turn a low profit margin into a loss. Which is worse, to be employed without health insurance benefits or to be unemployed? I realize that the current proposed plan is supposed to have provisions to prevent this from happening but there will always be the case of someone who is not going to qualify for an exemption to this mandate but will also not be able to afford it. In addition, how many dollars do we want to waste in investigating and enforcing this mandate? Dollars spent on bureaucratic administrative costs are health care dollars wasted.
The individual mandate is even a worse idea. It represents the most regressive tax this country has seen since we eliminated the poll tax. When a person making $3,000 a month is required to spend the same as a person making $100,000 a month by virtue of a federal law, this is by definition a regressive tax. Again, there are provisions to assist those in lower income brackets however there will certainly be those not poor enough to benefit from the assistance yet will be unable to provide essential services for their families when saddled with the increased cost of the individual mandate.
The argument is made that we mandate auto insurance be purchased by anyone driving. This is true but auto insurance is dramatically more affordable than medical insurance. In addition, one can chose to not own a car and therefore not need to purchase insurance. We have no such easy outs with health.
I am not surprised that Nixon supported the individual and employee mandates during his administration; however I am a bit surprised to find this to be the solution of the liberal Democrats today.
Cost savings? Universal coverage?
In addition to my concerns about the negative economic aspects of the individual and employer mandates, I am also disappointed by the fact that the current proposal does nothing to contain costs and may fail to provide universal coverage. It also avoids the question of what do we do with a foreigner (legal or otherwise) who presents to a hospital sick and without insurance.
The administration is adamant that the proposal will not increase costs. I doubt that this is true but even if it is true, it does nothing to slow the rate of escalation of costs. I realize that the major insurance companies have reassured us that they will be able to reduce costs. This strategy of relying on the assurances of health insurance executives lacks credibility. If insurance companies were capable of reducing costs in their current dynamic, they would have done it long ago. Let us not gamble our children’s future upon promises that cannot be fulfilled.
The “Federal Option”
There is a significant contingency of folks who think that a Federal option is the solution to cost containment and that if the current plan a Federal option, everything would work out. The thought is that the lack of profit motivation and absence of marketing costs would save a dramatic amount of money and reduce the cost of healthcare to a reasonable level. I do not believe in Santa Clause and I do not believe in a Federal option as the solution to health care cost escalation.
When Michael Dukakis ran for president in 1988, he was asked how he intended to handle the impending bankruptcy of the Medicare Trust. His response was that it would be simple. “Just direct Medicare recipients into private HMOs.” He calculated that the savings encountered with privatizing Medicare would extend the life of its trust. If the Democrats way to save money in 1988 was to direct patients away from a “Federal option”, and in 2010 the Democrats way to save money is to direct patients to a “Federal option”, I have trouble believing that this is a real solution.
Although it is true that there will be savings with respect to no need for profit and no need for marketing with the Federal option, there will be other costs which will likely offset these benefits. Medicare HMOs are not significantly more expensive than Medicare and often provide a better quality service. It is not beyond imagination that a federally administered system could add its own special inefficiencies that could impact global costs even without marketing costs or profits. The billions of dollars Medicare looses each year to fraud in Florida alone, if you can believe news media reports, lends skepticism to a single federal option being the cost effective option.
Medicare has been held up as an example of administrative efficiency. The VA system is promoted as a measure of low cost, quality medicine. Sadly both of these representations are wrong. Medicare has been the victim of gross fraud and abuse by unscrupulous physicians and durable medical goods providers. I don’t care how cheaply you process claims, if you have no mechanism of detecting fraud, you are not efficient. In addition, Medicare requires a hideous amount of paper work by physicians and hospitals; costs that are very real but never show up on the GAOs ledger. The VA system looks much better than it really is. I have many patients who use their VA benefits. They see me for most of their healthcare needs but go to the VA twice a year to get their medications refilled. From the VA’s perspective, they cost very little with only two visits; from my perspective, for these patients, the VA was nothing more than a very expensive pharmacy.
My conclusion is that a Federal option saving money is at best a long shot and not a gamble that we should rely on as the salvation of our health care cost crisis. I am in favor of including it in our options, but to make the Federal option the salvation of healthcare is foolishly optimistic.
A solution that will work: (in 5 pages or less)
When running for president, John McCain suggested that we give everyone a $5,000 check to help defray the costs of health insurance. Although I considered his proposal to be inadequate and not fully thought out, I do think it provides a starting point for the real solution.
Instead of passing out $5,000 checks, I propose that we provide every citizen plus every tax paying legal alien with a voucher that can be used to fully purchase a “basic health insurance policy”. (Non tax paying legal aliens such as foreign students and retirees would be required to provide proof of insurance as a condition of residency). We need to decide what elements are appropriate to qualify as a conforming “basic policy”. I would propose that the basic policy provide for preventive care before deductible, limit out of pocket expense to no more than $5,000 a year, and otherwise leave the options up to the individual insurers to decide. One insurance company could offer a very low deductible policy with a 20 % copay to a maximum out of pocket expense of $5,000. Another could offer a high deductible policy but provide the insured with and partially fund an HSA (health savings account) which would get the enrollee interested in saving money from the first dollar. The greater the flexibility allowed the insurance companies, the greater the potential for innovation and improvement and the less federal scrutiny is needed, with its inherent costs.
The value of the voucher would be based upon age/gender/acuity formulas which are well understood in the healthcare industry. This would result in preventing the rewarding of insurers who cherry pick healthy patients. In addition, individuals could change insurance carriers at will. When a subscriber changes from insurer A to insurer B, insurer A would be penalized, say perhaps one years premium, and insurer B would be bonused the same amount. This would strongly incentivize the insurance companies to keep their subscribers happy. The Federal government would also provide stop loss insurance for annual claims costs > 100,000 dollars. This would reduce the capital requirements for insurance companies, and further dis-incentivize insurance companies from cherry picking patients.
More robust packages could be purchased by individuals or employers by adding additional money to the vouchers. These higher end packages could include a broader range of covered procedures, advanced preventive screening, lower deductibles, or added benefits such as life, disability, or long term care insurance. It seems like a logical alignment of incentives if the same insurance company was providing health, disability, long term care, and life insurance for their clients. When keeping a client well means making fewer disability payments or delaying life insurance payments, this might create some creative thinking among insurance companies.
Medicare would be upgraded to qualify as a “basic policy” option. In its current form, Medicare is not adequate as a stand alone insurance and that needs to be corrected. A person who today has Medicare can keep the policy but it would be improved to the point that a secondary or “Medi-gap” policy is not needed. When a provider must bill Medicare, then bill a Medi-gap policy and then bill the balance to the patient, the undocumented administrative costs are astronomical
A person with Medicare today could chose to take the voucher and purchase a basic policy from any commercial insurance company or they could retain Medicare. Anyone not currently under Medicare could have the option to use their voucher to purchase a Medicare (Federal option) policy.
There are dramatic benefits to be had with incorporating Medicare in the reform package. First off, the administrative costs of maintaining a secondary insurance policy would be eliminated. The losers here are the Medi-gap insurance companies. The winner is everyone else. Perhaps there is some way that the current Medi-gap providers could receive one time compensation for their loss so that everyone wins.
The Medicare trust could not afford to upgrade Medicare policies to equal the “basic policy” on its own. It will require some additional Tax dollars to make this work. As a consequence, this logical additional revenue source to improve Medicare will result in providing a mechanism to prevent the ultimate bankruptcy of the Medicare trust.
Medicaid insurance and VA medical benefits would no longer be needed as everyone will have coverage. This will increase access and convenience for current VA beneficiaries and will dramatically improve access for Medicaid recipients who are currently unable to find physicians outside of subsidized indigent clinics which is not always available.
So let’s evaluate the results of this policy. Everyone is covered, this is good. The insurance companies will be very interested in keeping their enrollees happy as it will be very easy to change companies and it will be painful for the company to lose enrollees. Physician input will be valued as saving money with retention or improvement of quality requires physician input. And finally, there is a mechanism for true cost savings.
For the first time, physicians will have a legitimate chair at the table. Today if a physician does not like the policies of an insurance company (reimbursement or otherwise), the options for that physician is to grin and bear it or to quit the company and lose the relationship with their patients enrolled in that company. With the voucher system, the physician could inform their patients that they will no longer be participating with company A, but that they can change to any of the other companies remaining in that physician’s portfolio and not need to change physicians.
Yes, this can work!
Is it possible to have an insurance company that is interested in the welfare and happiness of their physicians as well as their clients? Actually it is and there is a real life example to be examined.
Rocky Mountain Health Plans in western Colorado is an example of an insurance company doing it right. It was formed as a not for profit insurance company administered by a for profit management company. The management company makes a percentage of the premium but does not directly financially benefit from denying services. The incentive of the management company is to enroll as many insured as possible, keep costs controlled to maintain solvency of the HMO, and retain as many insured as possible. Toward this end, they have engaged the physicians to help determine the best and most cost effective mechanisms to provide health care.
The reason President Obama visited Rocky Mountain Health Plans in 2009 was because it was the least expensive provider of Medicare services in the country. Historically, areas such as New York or Florida would cost two to three times more per member per month to provide care to similar patients as Rocky Mountain Health Plan affiliated physicians and hospitals could. Satisfied consumers, satisfied physicians, and low costs, all out of the same formula.
So we have a model of success. Why do we not see this same model all over the country? The answer is that not all insurance companies think and work the way Rocky Mountain Health plans works. Strategies to purchase market share and reduce costs through denial of needed care (rather than from investing in optimization of care) is too often the strategy implemented by insurance companies. As only a minority of enrollees develop medical needs in any given year, the insurance companies are allowed to get by with unreasonable practices and still have a majority of enrollees satisfied with their coverage. Very little effort is spent on the arduous task of developing health and prevention programs as most enrollees will be changing their insurance carrier within a few years, before there is a return on investment. Short term profits are rewarded and sought out.
Due to its geographic isolation on Colorado’s western slope and the historic investment RMHPs has made in doing it right, they can be rewarded financially by illness prevention and trying to encourage and reward healthy choices. In more urban settings where there is an oligarchy of insurance plans all behaving in about the same way, the concept of saving money by improving care is lost and is not a profitable course of action anyway.
OK, so we have the model of improved efficiency and the concept of vouchers to cover a basic insurance policy. How are these related and how will they reduce health care costs?
First, let’s not overlook the power of an intelligent, educated public and the free market when the educated public is allowed to make choices. For instance, if I truly had the choice of spending my voucher on a plan like Rocky Mountain Health Plans who have a track reputation of quality service vs choosing a plan that rewarded its CEO with a 100 million dollar golden parachute as he was being terminated for cheating on stock futures, I know which one I would choose and so would most other informed consumers. We are in the information age people, let’s use it.
With everyone covered and consumers in a position of power, the insurance companies will need to change to be more responsive to consumers. The companies that succeed will be those companies who work with physicians and consumers to provide the best quality care at the lowest cost. Those that take their profits and reinvest a percentage into further refinements toward improving their product, offering more than the mandate of the “basic policy” or adding rewards to their enrollees for healthy life choices will rise to the top. The model of making a small profit per insured life, based on having a large number of happy enrollees, will result in a very adequate profit for the insurance company and evolution toward lower healthcare costs with better quality.
A recent case in Colorado had an insurance company denying a person care for the results of an auto accident because she forgot to mention that her doctor had described “uterine prolapsed” on a prior exam. They canceled her insurance retroactively and left her with a 150 thousand dollar medical bill. She sued and got a jury reward of 2 million dollars. If consumers were really empowered, everyone who heard of this case would drop that insurance plan and move to an honest one. No one did because no one can. Replace our current failed system with the voucher system and the result would have been different. Would we see a change in insurance company behavior? Ya betcha.
What about the economy?
The voucher plan would provide a major economic stimulus which would keep on stimulating year after year. As manufacturing would be more competitive in the international marketplace against companies whose healthcare costs are not part of the cost of the product, we should see growth in this sector. The result would be increased employment and an increased tax basis. The small business sector would be in a better position to flourish as health care costs are currently putting people out of business and discouraging others to begin business. Stimulating small businesses with tax credits will help only those who are currently profitable and pay taxes. Removing the cost of healthcare will allow businesses currently unprofitable to become profitable, employ more individuals, new businesses to start and this will increase the tax basis.
We have experience with the trickle down economics of the Regan era. I propose that this health care reform would create a trickle around economic scenario. If the middle and lower income individuals have more spending money due to decreased health insurance and health care costs, a very high percentage of that money will be quickly be spent on goods and services and thereby stimulate economic growth.
How much will this reform cost and where will we get the money?
The reality is that providing adequate care to everyone should not cost much if any more than we are currently spending. The uninsured poor are currently cared for and the expense of their care is passed on to the more wealthy and insured. When providers are paid for caring for all, the individual costs to each will decline. This would be close to a net zero sum transaction.
As the vouchers will come from the federal government, the government will collect the money to cover these vouchers from income tax. The good thing about income tax is that tax assessment is based on some consideration for one’s ability to pay. I would argue that the increase in tax to fund the voucher system should not fall exclusively on the very rich but be born to some extent by most tax payers. As with income tax, it would be graduated and the very rich would pay more. When you analyze the winners and losers of economic growth vs increased taxes, the very rich are in a better position to benefit incrementally more with economic growth and loose incrementally more with economic failure. If funding the voucher system increases your tax by 5% but the resultant economic stimulation increases your stock portfolio value by 15%, you win!
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