With 258 House and 57 Senate Democrats, it’s almost certain that major health
reform will be passed, right?

Actually, that was the number of Democrats Bill Clinton started off with in 1993 and we know what happened to health care reform in that Congress.

With similar Democratic majorities, I do not expect a major health care reform bill like the one President-Elect Barack Obama called for during the campaign–in 2009 or 2010.

 

I do expect a number of important health bills including the renewal
of the State Children’s Health Insurance Plan (SCHIP) and a major
Medicare bill.

Here are the reasons why we could have a big health care reform bill in 2009:

1. Obama and the Democrats called for health reform during the campaign and many voters expect them to follow through.2.
Senator Kennedy has already begun a significant bipartisan effort and
many in the Congress want to see the Senator succeed in what could well
be his last effort toward a career-long goal.3. The health care
system continues at unsustainable cost levels–the average family cost
of employer-provided health insurance reached $12,800 this year.4. There are 45 million uninsured.

Here are the reasons why, in spite of all of our health care
problems, I don’t believe we will have a big comprehensive health care
reform bill in 2009 or 2010:

1. There is no consensus in the Congress or the country on what a comprehensive health care bill would look like.2.
Our people don’t want health reform badly enough to force the Congress
to stand up to the powerful stakeholders and make them do it.3. We don’t have the money.

No Consensus

Barack Obama did win a big victory. He did promise health care reform. But he won with slightly more than 50% of the vote and John McCain’s voters gave him close to 50% of the vote. The country remains split over the degree to which government should be involved in our health care system and that is reflected in the Congress–even after the Democratic victory yesterday.

In the House, the Democrats will enjoy a big majority. However, last session we had 49 "Blue Dog" Democrats and will have at least that many this time. Without "Blue Dog" support, the Democrats will not have a majority on any health care bill. No big health care reform can pass without the support of these fiscally conservative Democrats who are pledged to a pay-as-you-go policy–you can’t spend the money unless you either raise taxes or cut spending someplace else.

In the Senate, it appears the Democrats should have 57 or 58 seats in January. But Republicans can stop a big Democratic health care bill with only 41 votes and they will likely have 42 or 43. Forty-three is exactly the number of seats Bob Dole had when he stopped the Clinton Health Plan in 1994.

Any big health care bill will have lots of reasons for any number of powerful special interests to try to stop it. Or, a big bill’s authors could do what they did in Massachusetts–pay everyone off. The problem is if you give insurers, doctors, hospitals, drug companies, and all the others what they want to get them onside, you will create an enormously expensive bill and create opposition on that front alone. That’s why the California effort crashed earlier this year when that bill’s total costs became clear.

We are simply not at a place where any of us can outline a health care bill that clearly has consensus support and you don’t do something this big unless you have a clear consensus.

People don’t want it badly enough.

We really do have a democracy. For all the things you hear about the "special interests controlling Washington," the fact is that if there is a huge outcry from voters the Congress will respond. But there is no huge outcry from voters over health care.

The big issue in this election leading to Obama’s big victory was the financial meltdown and the economy–not health care.

Support for health care reform among voters is soft. Health care had consistently been the number three issue (behind Iraq and the economy) in the Kaiser Family Foundation tracking poll until gas prices spiked this summer. It then fell to fourth behind the price at the pump. In August, 22% of those polled thought paying for health care was a serious problem for them–but 36% said paying for gas was a serious problem. After the financial meltdown, in October only 12% thought paying for health care was a serious problem.

Health care costs $12,800 a year for a good family plan and when gas went to $4, the cost of gas was more important!

Health care is a chronic issue for the voter but support for big change is not deep-seated. It is not deep-seated because most people have very good health insurance that is largely paid for by someone else. Lake Research reports that 92% of those who voted last year had health insurance–82% had everyone covered in their household. For the vast majority, health insurance comes from the workplace where someone else pays for it.

For all the issues of the uninsured and health insurance costs, the vast majority of voters have really good health insurance and their employer still pays for the largest share of it. So, it’s no surprise when $4 gas is a bigger issue than $12,800 health insurance. It should also be no surprise when next year voter pressure for the Congress to do anything big and controversial will be tepid.

As long as the employer community is willing to subsidize our incredibly high health care costs for those who vote don’t look for anyone to be marching on Washington to fix our health care system.

No money

Passing an Obama-like health care reform plan will easily cost $100 billion a year to implement.

Two years ago the budget deficit was $162 billion. Last year it was $455 billion. In this fiscal year, it will be at least $1 trillion! The deficit was going to be $550 billion before it became necessary to book $250 billion of the bailout this year. It is expected the economic deterioration will create an additional $100 billion in deficit, and the Congress is getting ready to pass another stimulus bill costing at least $100 billion. That totals $1 trillion. Add to that the cost of the Iraq war, a bigger stimulus bill, any more deterioration, and $1 trillion is going to look good.

Add to that Obama’s preeminent campaign promise–he will cut taxes for all families making less than $200,000 a year. He can’t avoid this one. He intends to raise taxes for those making over $250,000 but just keeping the Bush tax cuts (which expire in 2010) for those making less than $250,000 a year and then cutting taxes further for those under $200,000 will have a big cost. Keeping that promise at a time there are already huge deficits will trump other spending–like health care.

With 43 Senate Republicans and at least 49 "Blue Dog" fiscally conservative House Democrats and pay-as-you-go health care reform looks pretty unrealistic.

And watch Massachusetts. That health reform plan was passed by giving all the players what they wanted–hospitals, docs, insurers. It was passed with virtually no cost containment. Coming up on its third year this summer, just as any federal health care legislation would be on the table, those chickens are going to come home to roost.

What will happen in 2009?

I expect the new President and Congress to keep their health care promise by starting incrementally to insure more Americans. They can’t afford, or would be able, to do it all so they will make a down payment.

There are a number of unavoidable health care issues for the next Congress:

  • The reauthorization of SCHIP, which must be done by April. Last year the Congress approved a $35 billion expansion that would have increased the number of kids covered from 6 million to 10 million. President Bush vetoed the bipartisan expansion twice. Obama will sign it and it could well involve a big cigarette tax to meet pay-as-you-go demands.
  • Physicians are scheduled to get an automatic 21% Medicare fee cut on January 1, 2010. The Congress has fixed this Sustainable Growth Rate problem seven times before. The last time was in July when they fixed it for just 18 months. While we desperately need physician payment reform, we won’t likely have the votes to do more than another temporary fix because the doctors don’t agree among themselves how to reform the payment system.

With pay-as-you-go so important an issue there is one place, other than a cigarette tax, where the Congress can find the money for health care–private Medicare. Pit the kids health program and the big Medicare fee cut against the cigarette companies and Medicare HMOs and, in the new Congress and White House, there is no competition–tobacco gets taxed more and the HMOs get cut.

But even the extra HMO payments and a cigarette tax aren’t large enough to both expand SCHIP to 10 million kids, fix the doctor payment problem, and pay for Medicare as it is. There will have to be more Medicare cuts–hospitals, nursing homes, durable medical equipment…Look for a big provider food fight over who gets what.

There are also a number of things the Congress can do that won’t cost the government much or any money–health information technology standards and requirements, transparency in provider pricing, health outcomes research, and others.

If there is any money left, there have been bipartisan efforts to help small business owners provide health insurance. This is the one area where we are seeing significant coverage erosion.

Expanding SCHIP, dealing with Medicare payments, adding on things like health information technology, and maybe doing something for small business would give the new President and the Democratic Congress bragging rights on health care if not comprehensive reform.

In the end, Obama and the Democrats can accomplish a fairly substantial health package without doing a big comprehensive Obama health plan and that is what I expect.

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19 Responses for “Despite Democratic control, major health reform still unlikely”

  1. Organic Grog says:

    I really liked your thread. I thought it was right on topic. “With the Do nothing Congress” that left prior to 2006, the Congress of today has a lot to make up for.

  2. jd says:

    One thing I have not seen discussed on this blog is the possibility of using special rules regarding budget legislation in the Senate, which allow for a straight majority rule vote without filibuster. If Baucus is able to do that, we may well get universal health care in the first term, if not the first year.
    In the House, I really don’t think it will be that difficult to peel away 5-10 of the Blue Dogs, and it may not even be needed because the Republican caucus is more fragmented than usual and moderates may be in a mood to cooperate. But as always, the tricky part is not to pass legislation that increases coverage. The tricky part is passing legislation that has the direct or indirect effect of cutting revenue for providers.
    Even though hospitals had their most profitable year ever in 2007, and specialty physicians have 9 of the 10 best-paid professions in America, they will do their utmost to convince Congress and the public that they can’t afford cuts in revenue. And they will probably continue to win, for the most part, for now.

  3. Another reason people don’t want it badly enough is that most of the public is healthy. It’s not until you get old and sick that you’re likely to pay attention – and given what health care is like, by then you’re likely to belong to the poor or the barely getting by, and too preoccupied with your own problems or those of the sick family member to become much of an advocate.

  4. Maggie Mahar says:

    Bob–
    I agree with you. Universal coverage is not
    going to happen now.
    The public don’t want it enough because 85% of the public has employer-sponosred insurance. They don’t want to give it up becuase:
    a) it is familiar and
    b) their employer pays a large part of the premium.
    Secondly, we really don’t have the money to cover everyone unless we first begin to wring the waste out of health care spending. As you know, right now, we have much evidnence showing that 1/3 of the dollars we spend on healthcare are spent on unncessary, ineffective and somtimes harmful treatments. This is why we spend roughly twice as much as other developed countires–and yet our outcomes are no better and often worse.
    Figuring out how to get value for our health care dollars will require thought, educating the public, and bringing in support from voters–not to mentiion a huge fight with the lobbyists representing those who profit form the current, wasteful system. This will take time.
    Third- right nwo we have other, very expensive priorities “the war in Iraq; get out of it and brining our pepole home; bthe medical needs of the Vets and the VA; the deepening recession and the unemployment that will follow; the need for infrastucture repair which will create badly need
    jobs . . I could go on.
    I agree that next year Congress will probably cut the windefall bonus for Medicare Advantage (the insurers just haven’t delivered value to being to justify the bonus) and I suspect that, one way or another, we’ll be seeing lower prices for drugs. (Importing drugs from Canada; and, i f that doesnt work, Meciare may begin negotiating for–and insiting on — lower prices.
    Bottom-line: I think that in the next few years, we’ll see steps that will really being to contain costs. And that will pave the way for being able to provide affordable, sustainable, high quality health care for everyone.

  5. jd says:

    I think Maggie and Bob may be too quick to conclude that the current financial-cum-economic crisis makes universal health care less likely.
    Obama has never set himself up to be the primary driver of a universal health care bill. His platform as a candidate didn’t even include a UHC proposal. On the other hand, three major players in the Senate (Baucus, Kennedy and Clinton) all do have UHC as their topmost goal, or close to it. Obama will not veto a UHC bill passed by Democrats as long as it isn’t totally irresponsible (i.e., it has some cost control measures, even if they don’t cover the entire cost of the program).
    As for the impact of the current crisis, it cuts two ways. True, we can’t be as sanguine about being able to make health care delivery reforms down the road, which means that probably deeper reforms to how care is delivered and paid for would have to be built into the bill, which would then make it harder to pass. However, other things need to be considered.
    First, people are losing their jobs by the millions, and tens of millions live in fear of losing their jobs. It’s true that most still don’t understand the true cost of care or what creates that cost. It’s also true that healthcare is on people’s minds, and more people are hurting from lack of coverage than ever before. The very thing that most generates a demand for UHC is rapidly increasing in importance.
    Second, we are all Keynesians now. Deficit-spending is nearly universally accepted as a legitimate way to get out of a recession…actually, it is nearly universally accepted as necessary to get out of a recession quickly and with minimal damage. A trillion dollar deficit is huge. How much huger is a 1.1 trillion dollar deficit? Also, as much as half of that trillion dollar 2009 deficit will be recovered, assuming the bailout funds are investments or loans rather than handouts (which, under an Obama administration, they would be).
    I agree with everyone that there are other things that take higher priority, and I still can’t see how we overcome the industry lobbies to get more than minor reforms to the incentive structure and delivery system of health care in 2009. But, that doesn’t mean UHC can’t be passed in 2009, and I’m not even sure it’s less likely now than it was 3 months ago.

  6. Maggie Mahar says:

    jd–
    Here’s the problem, as I see it
    a) universal coverage will increase the nation’s health care bill by 13–15% according to a recent report by the Centers for Health System Change/Robert
    Wood Johnson Foundation.
    Many people (yours truly uncluded) have argued in the past that if everyone were insured, our bill would be lower because today, uninsured people who don’t receive timely care wind up becoming much sicker than they would have had they been insured–and we all share in paying their hospital bills.
    It turns out that, over the last decade or so, the growing number of uninsured has actaully held the nation’s health care bill down–because the uninsured die sooner than the rest of us. That’s how we save money; they don’t live long enough to have Alzheimer’s or any one of many expensive, long-term diseases.
    This of course is not an argument against insuring them, it’s just a fact we need to recognize when estimating how much universal coverage will cost . ..
    In additon, while we do need to spend to stimulate the economy and create jobs, spending on healthcare doesn’t do that. It won’t create jobs. If health care reform is done right, we would close some hospitals providing sub-par dangerous care, and eliminate some redundant facilities that actually drive up costs.
    It would be great if we could hire more primary care docs and nurses–but no one is applying for the jobs.
    We should open some community clnics, but net/ net
    health care reform would trim jobs in a bloated industry (fewer drug sales reps, as drug prices come down, fewer underwriters if insurers are no longer allowed to either gouge or refuse to insure peolple with “prior conditoins” . . .)
    Moreover run-away health care inflation takes away from spending (and job growth) in other areas.
    So if we want to stimulate the economy ,we should
    spend on infrastructure repair, building schools, developing alternative energy. These are the things Obama talked about in his victory speech. He never
    once mentioned health care. . .
    The good news is that the Democrats have already announced that they plant to expand SCHIP and give more money to the states for Medicaid (They would not have announced this unless Obama agreed). This is good–they are making the youngest and poorest among us a first priority. And if Washington can put together enough money (by killing the windfall bonsus for Advantage insurers for instance) even the poorest states might be able to include families who make 3 to 4 times the poverty level in Medicaid (which the most generous states do now.) That would cover the working poor and lower-middle class. . . I’d also like to see fees for Medicaid providers raised (docs who take Medicaid patients are paid far less than doc who care for Medicare patients). We’ll see
    As for Hillary, she has introduced legislation that would take all of hte money that both the govt (Medicare etc.) and private insurers spend on preventive services, put it under one umbrella, and spend it more rationally—this would probably mean putting more money into public health, smoking cessation clinics, programs in public schools, etc. and less spent on diagnostic imaging and other tests that
    provide little benefit and can do real harm by leading to unncessay treatment (MRI’s for breast cancer, etc.)
    Hillary understands that $1 out of every $3 healthcare dollars is now wasted on ineffective, unproven, often harmful treatments. I don’t think she’s going to want to throw good money after bad until we’ve begun to
    contain costs–especially when we have other urgent priorities (growing poverty among children, the Vets, the war, unemployment that will probably hit 10%. )
    As others have written, Obama is facing most difficult situation since FDR became president in 1932.
    He’s going to have to spend resources very selectively . . .
    I think he’ll manage to get to universal coverage, but as he keeps saying, we have to do things “right.”
    And we did elect him because he’s intelligent, so I’m inclined to let him set priorities. ( It’s nice to actually have someone in the White House who might actually lead the country!)

  7. Deron S. says:

    Maggie – I agree that the consistently underperforming hospitals should be closed down, but only if that capacity can be replaced with better performers. The number of beds per capita has already been on a steady decline over the last decade or so, at a time when we are getting sicker.
    As to Obama’s spending priorities, I’m not so sure healthcare should ever be a spending priority. The system is already expensive. If reform solutions are done in the right order, I don’t think a whole lot of government spending is necessary. Developing insurance company policy standards to reduce complexity in the system will be a net gain right out of the box. Realigning the RVU system to increase primary care reimbursement and take money away from the procedures that are unnecesarily driving up costs would be another win without significant up front costs.

  8. Greg Pawelski says:

    Obama’s resounding defeat of McCain delivered a mandate for a progressive policy agenda, which includes a promise of universal health care coverage, mandatory nursing staff levels, raising the minimum wage, a dramatic transformation to a low-carbon economy, opposing Social Security privatizaton, promoting “fair” trade, and a historic investment in education. The progressive directon of the country, symbolized in Tuesday’s victory, is perfectly clear, it rejected conservative ideology.

  9. Matthew Holt says:

    I;ve been a naysayer for more than 2 years about anything happening quickly and on balance agree with Bob, but, it does depend how bad things get how quickly.
    Remember that most of the bad numbers we are now seeing on income/production/employment/ etc PRE-Date the late september-October meltdown in the financial sector. If things continue to get worse, we could be at 10% unemployment in 12 months (much more in reality because of how we fake that number) and perhaps up to 120 million churning through uninsurance (that number was at 80m in the boom time). And then who knows, Bushvilles? Breadlines?
    And in that case Bob will be right, Congress will do something…

  10. MG says:

    Nice summary by Bob. In the short-time, 2009 is likely a year where SCHIP bill that got vetoed by Bush will be reintroduced and approved. It was a bill that did not require any additional borrowing and complied with the “pay-as-you go rules” (e.g., that really mean nothing and conveniently got suspended for the massive Agricultural pork bill that passed last year). I imagine almost of the “Blue Dog” Democrats and even some moderates in the Republican party may support it. Only a question is if the tobacco lobby raises a big enough stink about the increased federal tax hikes on cigarettes that are going to be used to fund it over the next few years.
    Even with SCHIP being passed, most states are going to be a big bind financially over the next 2 fiscal years due to the huge drop in revenues from capital gains, failing housing prices, and income taxes. Some states that were irresponsible with spending to begin with the past few years like CA or NY are really going to get hit hard/face some really difficult spending cuts. Maybe they can expand the scope of their Medicaid coverage a bit but it won’t be any kind of significant expansion. Money just isn’t there and states usually have to pass a budget neutral spending bill every year even if there are some tricks around this too.
    Congress might address some of the other minor health care bills in Congress too (e.g., limiting recission of individual health insurance policies, funding for health IT, setting medical-loss ratio levels for health insurers, smaller solutions to health small employers offer coverage) but the money just isn’t there to do anything big especially with the huge looming Medicare fee cuts to physicians that has been conveniently backstopped and not fundamentally addressed for the past 2 years.
    Almost a certainty is that Democrats take the extra money in Medicare Advantage (and depends on how much) to fund the gap in physician fee cuts. Hopefully they don’t take too much as to cause health insurers to completely drop out of the Medicare Advantage market because it is just unprofitable and that there is some fundamental reform of the physician payments in this country. Basically a golden opportunity to rightly stop the overpayment to specialists. Somehow I don’t see Pelosi and the House Democratic leadership making the smart but difficult choice on this matter (or many others either).
    The big possible expansion of a health care coverage bill is coming in 2010. It is the year the Bush tax cuts sunset and it will set off a political fight that will produce some serious fireworks for both parties. If the economy stays poor into 2010 with unemployment that really has inched up to 9-10% (official manipulated bogus number put out by Dept. of Labor), then I think you will see more of a clamoring for expanded health insurance coverage of some type.
    Much depends upon what tax cuts Obama keeps and what new tax cuts he introduces. Additionally, healthcare is likely to be one of only several areas where Obama and the Democrats can choose to fundamentally use some of the additional revenues. Clean energy, infrastructure improvement, expanded educational funding, and several other domestic areas were identified by Obama during his campaign as fundamentally critical areas. Unless there is real pain and an outcry for expanded health insurance coverage, I see more of the incremental type of healthcare reform bills from the 109th Congress.

  11. MG says:

    Reforming entitlement programs (Medicaid/Medicare) is probably the single booming issue for the federal gov’t in the medium-to-long term but there is no way healthcare dominates the 1st year of his presidency unless the one wildcard gets played in Ted Kennedy. The prognosis on his survival has been kept very hushed and quiet. Not sure if he will even survive through 2009 or being able to function in a capacity as a standing Senator.
    If it becomes known that Ted Kennedy only has months to live and he chooses to make expanded health care coverage his last hoorah, I can see the Democrats in the Senate and the House using this as a rally cry to push a meaningful expanded health insurance coverage bill through by the end of 2009. The problem is will this roar be loud and sustained enough to get past the like torrent of poor economic news/uncertainty and potential foreign policy issues.

  12. S M says:

    Paul Krugman points out the fact that NY and other states, albeit few, have community based underwriting. Wouldn’t a healthcare bill that started with community based underwriting be a good start?

  13. MG says:

    Community based underwriting has its pluses and minuses. NJ did it several years ago with mixed results.

  14. Ali Al-Rajhi says:

    As Brian Klepper & David Kibbe stated in a previous article (which I have tagged on my blog), there needs to be more funding toward Primary Care so to reduce the amount of ‘unnecessary’ to the hospital for preventative conditions.
    For those interested, here is the article Brian Klepper & David Kibbe wrote: http://publichealthbugle.com/?p=97

  15. Nick Polimeni says:

    We don’t have the money to implement a universal system: This is utterly FALSE; the idea comes from long misunderstood economic concept on methods of creating the necessary liquidity to support any social project required by the nation. The “we have no money” idea has been promoted by the politicians as a one-size-fits-all excuse to hide their vested interest. Projections on ALL of Obama’s plans attainability are easily feasible within various economic studies by various institutes, including PEI, and so forth.
    Do we have the personnel? We have enough people unemployed who within a year can be trained as nurses and medical assistants, and physicians will be graduating from internships to be added to the system gradually.
    Do we have the physical resources, buildings, equipment? Unless there is extremely sophisticated equipment which must be built to order, then, in which case we are only up against the delay to create the equipment.
    When the personnel and physical resources are available, the only obstacle is obstinacy to hide greed, under untenable guises, such as “there is no money.” We’ve fallen for that excuse far too long.
    To say that people don’t want it badly enough is FALSE. Just because the majority of the population is relatively healthy, and isn’t terribly vocal against the carelessness of politicians isn’t a sign of “not wanting it badly enough.” To say so, it’s to say that American’s don’t care enough about others. True they have other priorities and concerns that are knocking at their door now; but the health issue is looming large in the horizon, and as one ages, it gets bigger. I’m 67 years old and have the standard Medical insurance provided with retirement. I never had health insurance before, except brief periods when it was provided by employers. I’ve been healthy all my life, with minor clinical visits, and I don’t expect a quick deterioration over the next 15 years. But when that comes, whatever the Medical doesn’t cover will be on the heads of others to pay for it as I will not be responsible enough should I come down with any serious illness.
    Finally, to say there is no consensus because 41 Senators can sabotage any efforts to the attainment of universal health insurance is an indictment of our political system, which further cries out for change, and I dare hope to trust the new man in the White House to deliver on that change.
    Some people gloat on the failure of others and on the failure of government.
    As citizens we have to press for the needs of the public, and as the man said, stand up to power; contribute communication and ideas, and community service, and get things moving in the direction we want. To sit back as spectator is what brought us to where we are now. I hope Obama’s win will serve as a sample that sitting back and predict doom is less productive than to come up with solutions that will make things happen.

  16. Richard Ferreira says:

    Bob presents an excellent argument as to why under the current circumstances there will not be any major healthcare reform. Economics are the overwhelming concern of the majority and similarly, their apathy respecting what healthcare actually costs them are the facts. Finally, these do nothing legislative good-old-boys might be moved out of sympathy for Ted Kennedy but is that rational?
    I would take a position that inventing other programs SCHIP or modifying existing programs such as Medicare and Medicaid are wasteful and will not address the issues but will further worsen and increase the costs of healthcare. The existing programs are ripe with fraud and abuse and their administration and management (provided locally or at the national level) only address the numbers and not the acts and as a result increase waste.
    In these threads we frequently see references to other nation’s response to similar past problems and what needs to be remembered is that those nations tax their population for healthcare. Here, we address healthcare costs at the individual and private level hiding national programs costs in various taxes. This is in addition to payment of personal health insurance as a direct out-of-pocket expense, a employer contribution in lieu of wages, direct premium payments from already taxed wage dollars and supplemental payments.
    Our current healthcare economy is based on an old model and that model is uncontrolled and costly. Maggie is correct in that cost control is needed but when implemented at a non-professional level we get the horrors of a rampant HMO denying care. Organizations have implemented cost-containment through professional efforts that were successful and that did not deny appropriate quality care. The problem becomes an issue of what is appropriate and who makes the determination. When it is done at the insurance company level, the control is based on actuarial predictors and past premium experience. In other words, costs are contained based on history but not on need and appropriateness. When done through professional efforts it is based on current practice patterns and appropriateness to that individual.
    The time has come to realize that our current uncontrolled healthcare costs be recognized as a national tragedy and that they must be contained not by implementation of a patchwork of legislative acts that only add to that burden with that burden passing to the individual.
    What must occur is a rational approach that begins with a budget neutral act (at present 2 trillion dollars WOW!) implementing what may be called universal care for want of a better term. This plan would apply to all residents of the United States, hence it would be mandated. It would be paid for through a fixed tax applied to the pre-tax income dollars of all individuals (including all corporations). The exact figure (percent of income) would not be as great as currently being paid for all the band-aid and patchwork concepts being applied both in taxes and out-of-pocket costs and premiums.
    While initially, it may seem that what I outline is a call for a single payer system, it is not. I propose that the model be based with all insurers currently selling insurance being mandated to sell health insurance to all residents in a given state or region and with all residents being members of the same community or risk pool. Use existing nationally mandated cost containment plans such as DRG, RBRVS and best practices to address costs and administered these uniformly on a national basis. Remove the pork as it currently exists in US mandate that allows reimbursements that can be as much as 3X greater for individuals and institutions in one city as compared to another. While local costs (rent, utilities, etc.) may be slightly greater, nothing justifies the existing discrepancy in payments to add up to fees and reimbursements that are 3X greater.
    While I agree that nothing will probably happen during Obama’s first term, I would like to think that someone will actually begin to assess health-care economics and how it can be rationally reined in before we find out that none of us except perhaps for the Gates and Buffets will be able to afford their own home. I would further hope it would be done out of reasoned approach and not based on sympathy for someone’s life.

  17. Laura L says:

    From a hospital perspective, here are the things that are driving expenses up and need to be addressed quickly to help with the looming medical crisis:
    Drug costs – even though our docs and providers are on a strict pharmacological review program to contain costs, the drug costs our hospital absorbs is still going up faster than our revenues. We’re talking 12% a year and as a state hospital, we get discounts so you can imagine how the private sector is taking this.
    An extremely lagging ejudication system between hospital and payor. Real-time is on its way so I hear, but until it is in place, the lag time and cost over claims maintenance/srcubbing and review is out of control. If a patient is covered, then you pay, just like any other transaction. We need to rid our system of companies that exploit the claims review process that looks for ways to deny payment. It happens and the hospitals and covered patients are paying for it.
    Non citizen health care or as we call it, charity write-offs. Every hospital that is having a hard time meeting ends, I guarantee there is a disproportinate share of self-pay non-citizens. The hippocratic oath is clear when treating these patients, the way to cover their costs is not.
    I sincerely hope that an Obama plan is not rife with bureaucratic jargon with threats on non-compliance. That truly would be more of the same! Patient enrollment in state and federal plans needs to be simplified. Our state medicaid program is ridiculously complex to sign up and even more difficult to get reimbursements from. I work at a state hospital that does its best to stay afloat but the problems I listed above, are putting way too much strain on our system and quality is suffering because of it. I do support a health care plan because ultimately certain economic pressures are going to bankrupt our hospital; especially with the numbers of boomers now becoming eligible for medicare . However, I do know that govt programs tend to have very unfortunate consequences on the markets they are trying to help. I suggest that health reform take place slowly since a quick, impulsive fix will likely result in a fiasco.
    Also, for those looking to an answer for more emphasis on primary and preventative care, look no further than your PA’s and nurse practitioners. They are a necessary and cost-effective key to assist with our primary care docs. They are trained to focus on education and preventative care and in conjunction with physicians and specialists, I think we can have a successful, comprehensive medical model.

  18. Richard Ferreira says:

    The issue is not the hospital system (private, public, academic, community, for-profit,not-for-profit, etc), nor the pharmaceutical inductry, nor the physicians abiding the Hippocratic oath. The problem is the economics and the system(s) that have developed to address the issues.
    Claims review would not be needed if hospital billing practices did not contain fraudulent claims, professional services for which no compensation is due to the hospital, unnecessary hospital days and a whole list of infractions to numerous to delineate in this commentary.
    Provide all residents of the US with universal health care coverage provided through multiple private insurers and not a single payer. The Medicaid system is more than difficult, so is Medicare and reimbursement from the Public Health Service even more bizzare. In short, the government is ill equipped and too incompetent to provide the necessary management and administration of a national health care package. Let the Well Point, Aetna, Cigna, United Health and other health insurance companies do what they are expert at, but make them answerable and accountable for every penny they recieve and address the entire system. Set the standards as a quality cost contained system with reasonable profit not intended to benefit Wall Street, but for the greater good of all residents.

  19. Robert – In this era of inflated expectation, I was relieved to read your analysis of the health care crisis and the liklihood of comprehensive reform. I have been working for many years on an economic theory that provides, among other things, a unique solution to our health care crisis. In this system, billions of dollars are saved, government and private industry are no longer involved in its management, and government subsequently downsizes upon implementation. Please visit my educational website (www.containedcapitalism.com) to review my work. I would appreciate your support. Thanks.

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