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Let’s get real about the economy and health care

I just got a call from a reporter at one of the major news organizations to talk about the chances for health care reform.

We both commented on the almost surreal environment we are all in. I’m not sure if my friends and neighbors are in denial or just numbed by the recent cascade of events in the financial world. Up on the Hill and in the presidential campaigns it’s business as usual when it comes to extending the Bush tax cuts, spending on alternative energy, or the imperative to do health care reform.

The reality is we are now headed down an unavoidable slope into a recession. The only question is how bad. Today, Dr. Phil told his audience to stop spending money, get their credit card debt paid off, and hold cash–"Cash is king." They are and they will.

General Motors’ stock hit a price today not seen since the 1950s because no one is buying cars–and won’t be for quite awhile.

A slowed economy means less tax revenue at a time we were already headed for a $500 billion budget deficit in 2009 — and that was before we would spend as much as $200 billion to extend all (McCain) or most (Obama) of the Bush tax cuts. (Anybody want to give odds on that?)

The next Congress and the next President are facing unprecedented fiscal challenges presuming the credit crisis starts to work itself out.

Someone recently told me an economic crisis doesn’t necessarily mean we won’t have important social legislation. After all, Social Security came from the depths of the Great Depression. It did. But it was pay-as-you go–there was no big upfront cost as there is in health care.

This denial–or numbness–in the face of a harsh reality reminds me of the times I have called the airlines in the face of a blizzard looking to get them to rebook my flight without penalty. The usual answer is, "The computer says its on time so far." Of course you know it isn’t going to take off in the midst of the terrible storm outside.

Health care reform isn’t going to take off in the midst of this huge financial storm either and McCain, Obama, all those offices on the Hill saying it will aren’t going to make it so.

The sooner we get real–on health care and everything else–the sooner we can start talking about what is really possible.

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giovahniNoahCharles Van Way MDBradford Kirkman-LiffKrista Recent comment authors
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giovahni
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giovahni

i think that the econymical struggles in this contry have been very intrugeing for the past few years i also think that the goverment is over going a huge economic scam of the people 9/11 was a goverment consperisy lead by president bush so he can start a war put it thrugh to iraq and collect the exses money as pocket money why do you think hes so happy about obama becoming president? any way as far ans health care goes the goverment is using

Noah
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Noah

I propose that we use the consumerism model being employed by most health insurance companies as a basis for real universal healthcare. We can use this model to institute a true single payer national healthcare system without losing the benefits of a competitive free market. All preventative healthcare such as physicals etc. would be covered 100% as well as all families under the poverty level would be 100% covered. All families above the poverty line would be required to meet a yearly deductible via the proliferation of HSA’s (we could potentially explore the possibility of letting people access their 401k’s… Read more »

Charles Van Way MD
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Charles Van Way MD

Health care costs as a percentage of GDP continues to rise, not only in the U.S., but in all other Western countries. Right now, with costs at 16% of GDP, we are at a breaking point. Productivity increases? Sure. But it still takes a surgeon an hour to do an appendectomy, and it takes a physician ten or fifteen minutes to see a patient. The blunt fact is that more procedures, drugs, and tests are available each year, and people demand to have them. So… who’s going to convince the public they will have to settle for less than they… Read more »

Bradford Kirkman-Liff
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Bradford Kirkman-Liff

Social insurance can be combined with multiple payers as in the Netherlands, Germany and Israel. While it will be a difficult process, we may see the following emerge: 1) In 2009 Medicaid may be folded into Medicare to remove a major burden from state budgets. States cannot run fiscal deficits – the Federal government can. Rather than give Federal bailouts to the states, it might be easier to cover the acute care costs of the low-income population and long-term care costs of the elderly using nationally uniform eligibility standards and benefits by having Medicaid becoming 100% Federally funded. It would… Read more »

Peter
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Peter

tcoyote, neither candiate has a good plan for healthcare. I’m not in favor of employer financed plans but an income tax based single-pay system where the government will create a budget and control costs. This way people are always covered, even the self employed. The money would come partly from money we now pay insurance companies, sorry insurance industry but you’ve never been part of the solution. I actually think John McCain’s plan will get us to single-pay much faster than Obama’s plan because McCain believes the private market and individuals negotiating with insurance companies will actually work. As for… Read more »

Krista
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Of course health care reform isn’t going to be easy, or even fully plausible at any point in the near future. But we need to start somewhere. We need to focus on making small changes to the system, and those changes will hopefully trigger larger changes over time. Any major “reform” or “overhaul” of the health care system touted by the Presidential nominees is just “fluff” – great ideas, but nowhere near realistic. And maybe that’s ok, just as long as it doesn’t stop us from making any changes at all, regardless of how small they might be.

Deron S.
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Robin/Dr. Levin/others – You are all so eloquent in your comments and your personal blogs, but the biggest question I have is: Are you ready to be part of the solution? The reason the overwhelming majority of Americans can’t talk about healthcare reform without mentioning the U.S. government is because we, as insiders in the healthcare system, have not developed solutions on our own. I talk a lot about reform in my blog (that’s really all it’s about), but I’m ready to step up and be part of the solution. If anyone else is willing to be part of the… Read more »

tcoyote
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tcoyote

Where the subsidy funds are going to come from to help pay for health insurance for the unemployed uninsured (who are not already on Medicaid)? Obama not only plans to raise taxes on all the Sub S Corporation that make more than $250 k, but also hit them for paid family leave. So in addition, to mandate that they provide health benefits or pay a tax instead will invade shrinking corporate cash flows and divert funds which would otherwise be used to create jobs. Tough to do in a recession, no? Would you rather have jobs or richer, federally guaranteed… Read more »

Peter
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Peter

Don’t worry, there’s plenty of money now. Seems the Dow is up 900+ today. There, glad that’s fixed, wasn’t that easy. Next bailout, healthcare – no problem.

Claudia Chaufan
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Claudia Chaufan

By all accounts, a social insurance system (e.g. single payer) is the most fiscally conservative: it is the only one that can guarantee that total health care expenditures, including what comes out of our individual pockets when paying privately for medical care, will come down, and that the disgraceful situation of Americans dying because they are priced out of perfectly standard medical services, will stop. Social insurance, which all developed nations but ours have adopted, works on the basic principle of spreading risk widely, exerts the greatest purchasing power over providers of services and goods, and cuts wasteful paperwork(dividing people… Read more »

Robin Strongin
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Robin Strongin

I take the opposite view — I actually think the ecomonic meltdown will be a catalyst in moving the needle on health care. I have always believed we’ve needed something catastrophic to get our attention and push us to make real change. Health Reform is at once, too broad and too vague a term to be truly meaningful– What aspect of health reform do you think won’t take off during this economic storm of ours? While Congress and states have tinkered at the margins, health care is tethered to the economy and while I don’t expect to see the new… Read more »

Gary Levin MD
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Clearly Robert, you are spot on. There is not going to be additional funding for health care, and some programs such as funding for healthcare by the government will be delayed for some time. Even providers and health institutions will not capitalize these “improvements” in health care, which in reality have no effect on the quality of the science and medicine. The bells and whistles are not, nor never have been the essence of why American Health Care was once considered to be the best of the world. The medical establishment, driven by those who write the checks, ie providers… Read more »

Peter
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Peter

According to George Soros we’ve been spending about 8% more than we have been earning for the past 25 years. Our wealth has been because of debt creation, not production. Kevin Phillips also pointed this out when he stated that the financial services industry has over taken the manufacturing sector as a portion of GDP. We move money, not products, and usually that money is moved from the lower income groups to the upper income groups. I don’t see this changing and went into a zero debt, cash position a while ago. As for solutions tcoyote, I’m not sure there… Read more »

tcoyote
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tcoyote

I love the airport monitor analogy; clearly the plane isn’t taking off until they have a new crew and possibly a different aircraft. But “Get real” means what, please? Put off “reform” until there is a budgetary surplus? Create a budget-neutral version? Cut spending? Work on “reforms” that don’t involve tax-funded subsidies?
You’ve clearly got some ideas about this, Robert L, so let’s hear them. What are you expecting them to do exactly besides admit that the pandering stage of the health reform debate is over?

Deron S.
Guest

I’m not sure why we should wait for the candidates to tell us how we’re going to reform the system. Let’s get busy assembling the people who really understand the system and what it will take to get it functioning properly.