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Health Care Reform Lite

J.D. Kleinke

J.D. KLEINKE

“The only constant in health care is change.”  It’s one of those shop-worn things you hear too often on health care’s rubber-chicken circuit; and not only is it not true, but it is exactly untrue.

Of course, there is one thing different in 2009: everybody gets to whine about it on Facebook.

So too health care reform.  When the “journalists” at Fox News, the red-faced demagogues in Congress, and the alarmists in your organization are done ranting about “ObamaCare” and the sky falling, understand that the essence of the health care bill moving forward today is one very simple thing: a violent endorsement of the status quo, paid for with an artfully diffused redistribution estimated to cost, on an annualized basis, less than 4 percent of the system’s annual $2.2 trillion haul.

Under the plan that looks most likely to pass after some classic Capitol Hill 3 a.m. horse-trading – this time between the grumpy far left and poll-sitting centrists on both sides of the aisle – health care “reform” will involve little of substance beyond (1) the long overdue jamming of 46 million people currently outside the system into that system, and (2) an equally long overdue prohibition against health insurers kicking them back out.  For the middle-class taxpaying swing voter in denial of what could happen in 90 horrifically unlucky days at their job and within their bone marrow, i.e., the average voter with coverage they might not be able to afford after simultaneously being fired and getting leukemia, #2 is worth the entire effort – and the reason any politician of calculation if not conscience should vote for the plan.

But at the end of the legislative process, and as with the bitterly debated Medicare Drug Benefit in 2004, all we’re doing is expanding exactly what we have today for most Americans, to include (almost) all Americans.  We’ll spread the economic pain around the system fairly evenly, via mandates, taxes and fees that will show up in new equilibrium prices for insurance, drugs, and devices.  And the economics of finally putting everyone into the system – instead of waiting until they are on death’s door, a.k.a., the door to the emergency room  – will more than offset the upfront costs of getting them there.

Best of all, that last bit of accounting – which lifts what everyone knows to be the worst economic and emotional drag on the entire system – has not been accounted for in the current plan’s financial scoring.  Such accounting involves too multivariate a set of equations, too many interdependent factors, too many unknowables in the cost and epidemiology of unmanaged disease – and so the CBO had no way to consider the most profound part of the entire initiative.  Meaning: the systemic economic effects of including everyone in the system are gravy.  Billions of dollars worth of gravy, if you believe any of the estimates of what the “safety net” costs all of us every year via the madness of hospital-to-insurer-to-employer-to-you-and-me cross-subsidy.

My point about how the Medicare Drug Benefit has played out in the past five years bears repeating. When the “Part D” benefit was debated in Congress, the hysterics on the right screamed on cue about “government bureaucrats” in our medicine cabinets, an entitlement that will bankrupt the country, etc.; while the hysterics on the left carped about the evils of capitalism, the program’s outrageous use of money-making corporations to deliver products to people, etc.  Out of that political sausage-grinder came a classically American public health care program of government funding and corporate delivery.  The health plans, specialty drug plans, and PBMs that administer the program – and the drug companies that supply it – did not get everything they wanted, but they got enough to stay in business, make some money, and deliver long needed care to millions of people who previously couldn’t afford it.  Yes, many of the plans did especially well thanks to Federal subsidies, included in the “Medicare Advantage” program to prove the “efficiency” of the private sector; but that was a bone to the right, not the left, to support the program, so we’ll ignore that pesky irony.

The Medicare Drug Benefit may be working no more perfectly than anything else in health care, but it is working just fine for millions of Americans who had too often been forced to choose between medicine and food, between certain death and slow starvation.  Maybe that’s why so few on the right or the left have brought it up in the debate: its embodiment of political compromise and its programmatic success constitute enough actual empirical evidence to sully anyone’s ideological polemics.

Consider the Medicare Drug Benefit a perfect trial run for what we all should hope will pass into law in the next few months: health insurance market reform.  It’s not true health care reform – this would apparently require an Act of God rather than an Act of Congress.  But the bill before Congress today will finally let the health care system function like something closer to an actual system, because the worst external perturbations to that system – the chronically uninsured, chronically sick, and chronically most expensive to care for – are finally included.

And if you are running a health care organization and worrying about the effects of “health care reform lite,” take note of what happened to those involved in the Medicare Drug Benefit: a few organizations failed miserably, some have profited mightily, and most have muddled through, figured out the rules of the new game, and are doing just fine.

Just like most everyone in 1989.

J.D. Kleinke is a medical economist, author, and health information industry pioneer.  He has been instrumental in the creation of four health care information organizations; served on several public and privately-held health care information company boards; and written

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Joe The User
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Joe The User

I would agree that the same game as fifteen years ago is happening and the results can same be expected.
The thing is the result last time was an exponential growth of health care costs and thus the same thing can be expected this time.
You have tumor and you do nothing and it does “the same thing as yesterday”. Yes, but at a certain point, “size matters”. At nearly 20% of the GDP and growing uncontrollably, “nothing changing” with what you appropriately call the US health care non-system is something of a disaster.

Gary Lampman
Guest
Gary Lampman

The Congressional Health Care Bills are nothing less than a Bait and Switch. The Con in the Conservative vernacular is just that “a Con Job.”There angle is I’m against everything that does not Cater to Corporate Welfare and profitability. Wars are acceptable without justifiable cause in exchange for unjustifiable blood shed and lost of life of our Armed Forces for personal Gain. Health Care or more accurately Health Insurance Reform is no different. Catering to Corporate interests of manipulation and exploitation of the sick for personal Gain. Can you see the similarities? Since the Two wars ,we have already exceeded… Read more »

Gary Lampman
Guest
Gary Lampman

It may be true that we have made several advances, but Health Care has become Fractured by Health Maintenance Organizations. J.D. You have mentioned Aids which is World Wide. Today,Deaths from HIV/AIDS amount to approximately 15,000 deaths each year in the US. However,Hospital Acquired Infections are Preventable and Kill nearly 100,000 people a year. Still,some 2 million others end up with life long disabilities and expenses that are of no fault of their own. Its Ok if you wish to pay Excessive Fees for substandard inflated care. Still, I would rather support justifiable expenses. A gallon of Gas is still… Read more »

J.D. Kleinke
Guest

The same coverage, Ken? Really? You mean your health plan today doesn’t pay for any drugs, devices, surgeries, MRIs, genetic tests, or other medical innovations created since 1985? You’re definitely not getting your money’s worth. In 1985, most heart disease and cancer diagnoses were death sentences; we had no surgical or pharmaceutical treatments for stroke; we had no drugs to slow the crippling and often killing effects of dozens of diseases like multiple sclerosis, arthritis and Alzheimer’s; organ transplants were rare events that usually backfired and killed the patient anyway; HIV/AIDS was called “gay man’s cancer” and was also a… Read more »

Ken Williamson
Guest

In 1985 I paid $20 a month for family health insurance. Today I pay over $350 a month for roughly the same coverage. If you do the math {((350-20)/20)*100 = 1650%}, that is a premium increase of 1650% over the past twenty-four years. By comparison, in 1985, the cost of gasoline was around $1.20 a gallon on the East Cost. If the cost of gasoline had increased 1650% over the last twenty-four years, we would all pay around $21 a gallon today on the East Cost for gasoline.

J.D. Kleinke
Guest

Yeah – except the kids starting showing up only after Sarah Palin posted. I can’t blame anybody their school-boy crush, especially on a pol moll as hot as Tina Fey, but the important lesson we should all be teaching our young people is that there is no simple answer to ANYTHING in health care. So much for Palin’s ideological bluster, here or anywhere. High school kids beware: our health care system trods into the most profound and sacred parts of our lives; and too many adults with what sound like sound politics show up in health care only because they… Read more »

Steve Beller, PhD
Guest

Round and round in circles with each side quoting “facts” that contract each other, such as: American healthcare is the best in the world … Oh no it’s not! It provides mediocre quality for exorbitant cost and leaves nearly 50 million without coverage … No, it’s only round 15 million, and the money we spend goes to good use (e.g., drug research, better medical devices, etc.) … Wrong! Too much of the money goes to big pharma and insurance company profits. Not only that, but lobbyists for the major player groups pay government officials to write rules favoring them. So,… Read more »

Nate
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Nate

THCB = scarred strait for kids who don’t appreaciate their childhood.This is what you have to look forward to kids, no get outside and break or sprain something

Matthew Holt
Guest

I’m really proud. THCB has turned from being a free-for-all bar fight into a corrupter of the youth of today!
I anticipate hearing the sirens coming down the street any moment now!

Nate
Guest
Nate

J.D. your doing a terrible job informing our youth. Our systems have been a mess since Congress passed Medicare in 1965. The only fix you reference is far from true. Medicare was a major change, HMO Act 1973 was a major change and failure. COBRA and HIPAA both major changes. GINA minor but significant changes. When the autopsy is done there won’t be one fatal blow but death by 1000 mandates and reforms. You should instruct our young student, and most adults, to study the last 44 years of reform, what was promised, what was passed, and what the outcome… Read more »

Laura Hamberg
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Laura Hamberg

If the Federal, State and local government employees work for the American people then why don’t we chose to cut their healthcare? Most individuals do not make the changes needed until they are personally effected. Maybe our government officials should have to live like average Americans. The Federal Government, is the largest employer with more than1.8 million employees, and with an additional 636,000 for the US Postal Service and an estimate 17,000.000 for state and local government.. These Federal, Sate and local agencies offer employees flexible work schedules, telework; child care and elder care assistance. programs. They also receive incentives… Read more »

J.D. Kleinke
Guest

Hi Zac – It’s great that you are engaged in this debate at 15 years old, and you are right about the current plan not covering quite everybody. But like a lot of intelligent and well-meaning Americans, you are misdirecting your anger and frustration with our serious economic problems – some of which were created during the past decade and some of which are normal cycles of an economy through history – at our President and his health care plans. Understand that the U.S. health care system has been a mess for decades, and the only real attempt to “fix”… Read more »

Zac
Guest
Zac

the only point you have to make is who’s leading the healthcare bandwagon. Obama (who else). Do you really trust him to lead us out of these ‘heard times”. The man has more than doubled our deficiet of all time in a matter of months, he’s sky rocketed unemployment rates to the roof. On top of all of that even is his plan does go through and does suceed there will still be (if my numbers are correct) around twenty million sum odd people still not covered with health insurance. We are turning a leaf more and more everyday to… Read more »

Nate
Guest
Nate

“”In short, in the US, you pay more, get less, and die younger than we do in Europe. What part of that don’t you understand?” Actually Tom I get far more and live longer. Seeing as how there are very few 30% black, 20% Hispanic, 5% asian, etc etc people in this country you can’t compare these statistics on the simpleton level your French family is. Compare white Americans to the French and see how that changes things. Compare our asian population to that of asian countries. Our black and Hispanic populations far out perform Africa and south America yet… Read more »

Reimagineer
Guest

What baffles me is the fact that there is an entire Plan that addresses all of the needs of America without any government intervention. It’s the LOOP Plan and it would be owned by every American, will eliminate the current unfunded liabilities, would(in about 5 yrs)eliminate Medicare…Medicaid…and Workers’ Comp, will eliminate the highest % of the deficit, and does not limit or restrict medically necessary services. And you would own it yourself!! It covers every aspect including legal and illegal alien concerns. And it will lower healthcare costs by more than 50%. Get a free copy of the Plan (24… Read more »