Health reform prospects in the wake of Black Sunday

"Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation," said John McCain to a reporter in an interview in Contingencies magazine. The article is titled: "Better Care at Lower Cost for Every American."

This isn’t a Photo-shopped, made-up comment. See page 30 of the publication, the last paragraph in the left hand-column which continues into the right side.

Contingencies is the magazine of the American Academy of Actuaries. These are those sober professionals who, according to their mission statement, "put a price tag on risk." They do that through evaluating the likelihood of future events, and, in their words, "designing creative ways to reduce the likelihood of undesirable events."

Let’s think like actuaries, then, and consider prospects for health reform following last week’s major implosion of the financial services sector. That is, what are the risks of not taking on a comprehensive approach to health reform in the next administration?

Uninsured and under-insured rolls increase. We learned in April 2008 from the Kaiser Family Foundation that every 1% increase in unemployment translates to a 1.1 million more uninsured. At the same time, there is a 1-million person increase in the number of enrollees in Medicaid and SCHIP. Whence the funding for these new enrollees’ coverage?

State and city tax revenues are falling. I listened to the eloquent Michael Bloomberg, Mayor of New York, tell Tom Brokaw yesterday morning on Meet the Press that he expects New York City’s tax revenues to fall 12% in this fiscal year. His low tax-expectations will be echoed throughout the nation as state governors and city mayors will receive lower revenues while demand for services will increase. Remember that health care is the #1 line item for a vast majority of governors.Plan on more ER visits for primary care. The health provider for people without a medical home or an ongoing physician relationship is the emergency room. Uncompensated care is a major fiscal challenge for the vast majority of hospital CFOs. More visits from uninsured people will lead to an even greater percentage of unpaid bills by consumers who, until they can find steady work and a "good" paycheck, can scarcely cover the growing costs of food, gas, and utilities.

Consumers will forego necessary care. Today’s Wall Street Journal published an article by the smart Vanessa Fuhrman who agrees with me that consumers are foregoing care — even important, ‘non-discretionary’ care. I have been documenting this trend for the past year. Most recently, on June 28 I covered the Center for Studying Health System Change study on consumers putting off necessary health care.

And so on…

Jane’s Hot Points: Senator McCain’s article in Contingencies concludes with the following sentence: "Any ‘solution’ that robs us of that essential sense of ourselves is a cure far worse than the affliction it is meant to treat."

I take this sentence to be a version of the instruction, "be careful of unintended consequences" when you meddle with public policy.

We are at a turning point in American society — given globalization, the oil business, the decline of public education, and the growing number and serious nature of challenges facing the U.S. As I write this post, for example, the price of oil per barrel has just jumped 25% and the dollar is sinking.

I am absolutely for stabilizing financial markets ASAP. But I am also advocating addressing comprehensive health reform in the immediate term based on the mini-implosions that are already happening in our system. If you take a bird’s-eye view over the entire landscape — and not just in your own town, or in your own health benefits — you can see from my exercise in connect-the-dots that health care in this nation has been imploding for some time.

The lesson from financial markets is not to put off to 2012 what we can and should do in 2008.

20 replies »

  1. I am curious. It is evident, that there is a crisis. As I read the blog and the comments, everything that is wrong is clearly declared. I suspect more (Much more) can easily be added to it. BUT what is the solution? It’s good to say it begins at home..nice principle. HOW? WHAT IS THE SOLUTION IDEA?!! I would really like to hear that.
    And undoubtedly, politics cannot be kept out of it, since it is the most prominent factor in deciding public policy and driving either reofrm or something that looks like reform but is not.
    I agree BUSH has been the most comprehensive disaster to US economy, but I have a strong feeling he hasn’t finished yet. There are a few more things he will do before he leaves..I think he has some permanenet impact in mind.
    ALSO, while what OBAMA suggests may not be a great or useful suggestion, one still needs to remember he is not like Maccain and Palin. Obama, one hopes has a human brain…one cannot hope that much from the woman with a Beehive hairdo and a buzzing brain space!!!
    I would like to know if any one has an idea about what can be done?
    The problems are…Healthcare spending is basically exploding along with healthcare cost. This is complimented with demented policies, and rampant healthcare fraud. Not to mention that healthcare delivery system either stinks or is bursting at the seams..in other words it is inefficient. We have a VERY VERY elaborate system, that expertly fails to deliver more often than not. HOW does one tackle all of this together!?

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  3. “Its funny (or sad depending upon how you look at it) but health care is just like defense spending in this country right now in many ways.”
    Some would call what we have the “medical industrial complex”.
    I think that a bigger obstacle to real health reform, especially reform that addresses both cost and coverage, is that hospitals are some of the largest employers in many cities. Healthare spending employs huge swathes of America.

  4. Deron, healthcare IS politics and the title of this blog is; “Health reform prospects in the wake of Black Sunday”
    Ronna, simplistic statements like, “the cause of America’s Health Care crisis begins and ends in the HOME!” does not recognise the extent or complexity of the problem. It’s like saying we need to pray more.
    How would this, and many more like this, be solved in the home?

  5. Yes individuals must have some level of accountability for their own health through the personal decisions they make (if the “wellness program” is actually going to work for wide segments of the population) but it is shear ignorance that politics doesn’t play a large and important role.
    Even if you just look at the issue of enacting fiscal penalties of some form on individuals for “negative” behaviors, there are a number of important federal and state statutes and regulations that needed to be examined around several large issues including potential discrimination effects.

  6. Who’s going to get us back on track, Deron? We start with ourselves. And then we pass on what we know and learn to everybody around us. Then they pass it on to their loved ones. It’s a grassroots movement.
    We have to foster a legacy of health and wellness in the family, in the home.
    I have help but I need much more.

  7. I think everyone on Earth needs to read Ronna’s post! Finally someone who gets it. I’m amazed by how few people in this country recognize that role individual citizens/patients play in this mess. Everyone is so quick to blame the other guy and it’s alarming. Personal and social responsbility in this country are on a downward slide and it’s spilling over into healthcare. The big question is, who is going to get us back on track? Let’s keep these discussions on track and stop playing politics with healthcare. At best, it’s unproductive.

  8. Both candidates economic positions are so “pie-in-the sky/ridiculous” given the current situation economically and the national budget, that I am very curious to see what impact this has on the debates.

  9. Its funny (or sad depending upon how you look at it) but health care is just like defense spending in this country right now in many ways.
    The US is sent to spend a staggering $750 billion dollars on defense and 2 wars this coming fiscal year. Not only are we not assured of positive outcomes in the long-term in either war (just like in health care), we are also spending money on select defense programs to fight an enemy that no longer exists (Warsaw Pact forces no longer exist and the Soviet threat is gone) or doesn’t remotely fufill a more immediate need except to give one of the branches of the Armed Services more toys but doesn’t really so anything to address America’s current security concerns/issues (do we really need more freaking Seawolf attack class subs at a few billion a pop?)
    You could easy make the case that in health care we doing the same thing we are with defense – spending tons of money on things that doesn’t address more immediate needs and pursueing policy options that are in most cases much more expensive in the short-term/long-term than other options.

  10. It doesn’t matter who wins this election because the cause of America’s Health Care crisis begins and ends in the HOME! The government can not and will not fix this problem for us. We MUST fix it oursleves and we CAN do that.
    What we can’t do is continue to expect our government to bail us out every time we make a poor and/or greedy personal choice. We should all be held responsible for our own actions individually and some states are doing that by ‘charging’ obese workers $25 to help with the costs of their own health care which, by the way, is substantially more than the average weight person.
    We are Americans. Our entire history is based on taking control of a bad situation and making it better so we can ALL benefit.
    We better start Taking It On and quick!

  11. BJ, tell me why politics and financial policy is NOT also about healthcare and very relevent? Bittered, Frustrated? Yes, and angry. Tell me how you feel about the present situation – calm, placid, accepting? I wonder how you’ll feel when you get your tax bill. We have always talked about the candidates here and their “proposals”, I’ve even said Obama’s falls way to short to be of much value, and McCains is about how we got in this unregulated mess in the first place. You’re welcome to respond anytime BJ, even if the conversation gets a little beyond the PC.

  12. we spend more than $7,200 per capita, and growing. The commonwealth fund proposal (see their site) has a proposal that will ensure all for less than current expenditure. never thought i would say it, but a single payer solution is looking awfully good….

  13. we spend more than $7,200 per capita, and growing. The commonwealth fund proposal (see their site) has a proposal that will ensure all for less than current expenditure. never thought i would say it, but a single payer solution is looking awfully good….

  14. I love reading this blog on a daily basis, but holy crap! These things are always littered with bitter, frustrated comments by guys like Peter who, rather than talk about healthcare, say stuff like,
    “But I’m not sure Americans totally understand the consequences of electing an idiot to two terms yet.”
    “They seem eager to put an even bigger idiot (Palin) in the White House”
    I guess I’ll keep checking back in and hope that the conversation on healthcare gets relevant again. Maybe when the election is over….(sigh)…

  15. Maybe this is a good thing in the long run, as both candidates plans would result in a catestrophic failure of our delivery and financing systems for health care.

  16. And while we are at it, let’s throw in another 700 billion dollars to buy all the doctors out…..save us!!

  17. And while we are at it, let’s throw in another 700 billion dollars to buy all the doctors out…..save us!!

  18. The US pays twice as much per capita as every other country. New taxes are not needed. Truly comprehensive reform can use the money we already put in the system, and merely reallocate it more effectively. Unfortunately, I don’t think this type of reform is politically feasible, not even given this dire situation. We’ll have to wait for it to get worse…

  19. ^^Exactly Jeff, and it won’t just be healthcare but every other needed and growing crisis from energy alternatives to global warming. But I’m not sure Americans totally understand the consequences of electing an idiot to two terms yet. They seem eager to put an even bigger idiot (Palin) in the White House to give the country the coup de grĂ¢ce. The biggest damage Osama bin Laden did to this country was not the Twin Towers, it was creating the event that gave us Bush, who will go down as THE most destructive and stupid President we have had yet – aside from Palin (Bush on steroids), if McCain can fool us into thinking that his choice for VP was, “country first”. Our only hope now financially is if China forgives our debt – hell, we’ve done it enough times for other countries.

  20. Jane has missed the most obvious implication of the implosion: the bailout will use up the fiscal margin for any subsidized solution to health reform. There will simply be no extra dollars in the federal budget for the uninsured for many years. Obama’s health reform plan, which relied on new taxes, is dead as a doornail unless he is willing to push the budget deficit into Argentinian territory, or finance it from savings inside existing health spending or health related tax subsidies. Even the existing base of health spending will probably have to be re-examined. Stay tuned for a more detailed analysis.