Healthcare Reform Part 3: Understanding the Proposals
By Roger A. Forsyth, MDOctober 25, 2009
The various Congressional proposals have several similarities. First, they are very long—1,000 to 1,400 pages. Anything this complex is bound to be full of hidden agendas and items that will lead to unintended consequences. Moreover, instead of laying out a brief, coherent path to specific goals, the bills put the politics before the policy and address the concerns of various interest groups rather than those of the general public. The bill has provisions for retirees, physicians, pharmaceutical companies, insurers, unions, and the states served by specific politicians, but almost nothing that demonstrably reduces the public concern—the cost of care.
It is cost that is causing bankruptcies, loss of insurance, and the inability to purchase insurance. Yet rather than addressing the root cause of the escalation in cost (the overuse of services) in a disciplined manner, the bills adopt a shotgun approach and expand coverage to the uninsured, create new entitlements, add new expenditures, and then add new taxes, fees, and penalties to pay for the additions. When it comes to true cost containment, there are only vague programs that the Congressional Budget Office cannot certify as being capable of saving money.
A single payer system (SPS) would lower cost by letting the government determine the number of specialists and availability of technology and the compensation rates for physicians, hospitals, and medications. However, when the public looks at many (but not all) of the countries with a SPS, they see a shortage of specialists and specialty equipment, drug manufacturers that rely on the US market for their profits, economies with higher unemployment, longer disability, lower productivity, lower growth rates, and longer waiting times, and populations that are asking for a private option or crossing borders to get care. In America, we have a country that is first when it comes to cancer survival, heart disease survival, and in responding to patient concerns.
However, it should be noted that SPS citizens generally do not complain about these drawbacks because “free” care and unlimited primary visits are greatly appreciated. Americans resist a SPS because they expect to get a knee replacement in less than 45 weeks and would not accept an eight-fold difference in the use of dialysis (as once existed in Europe). The ideal would be to maintain our plusses and work on our negatives rather than adopting a system that replaces our current flaws with new ones that we will then have to overcome.
Proponents of a SPS are convinced that we could institute such a system without the drawbacks.
As previously stated, there is nothing in the history of Medicare and Medicaid that would justify the assumption that government ownership is cost-effective. Despite the fact that Medicare and Medicaid push some of their costs onto the private sector, they are going broke. As a result, the public has not supported this approach. In response, SPS proponents developed the public option alternative. The stated rationale was that competition would force the insurance companies to cut excessive CEO payments and/or shareholder profits. If Congress wanted competition, it should simply invoke the Commerce clause and end the current lack of interstate competition.
In any event, if a CEO of an insurance company with 10 million subscribers were making 100 million dollars, canceling his salary completely would return only $10 to each individual. On the other hand, if you eliminated shareholders and the dividends they receive, the insurers would then have to borrow capital from banks at a higher rate. There is nothing in a public option that will lower the cost of healthcare except its ability to institute price controls and to hide cost by issuing bonds that will be paid by future generations.
When healthcare reform was announced, the public was told that high healthcare costs were causing bankruptcies and making the US economically uncompetitive. Unfortunately, the legislation that is currently being proposed will increase the cost of healthcare by 829 billion instead of lowering it. In fact, because costs are increased immediately but benefits are delayed by up to five years, the true cost is over one trillion. The fact that new taxes, penalties, fees, cancellation of Medicare Advantage, etc. will limit the growth in the deficit does not change the fact that the cost of healthcare will go up and not down.
If we look at Congressional efforts to reduce cost, we should not be reassured. Medical information technology was touted as being able to save large sums, but as the Congressional Budget Office pointed out, the cost is so great that there will never be any savings. “Comparative effectiveness” refers to a theory that you can save money by setting up multiple boards that will set up standards for multiple aspects of medicine then set up multiple bureaucracies in multiple parts of the country to enforce the decisions of the board. Again, the cost will overwhelm any savings. Enhanced screening programs will cost money and should be considered a tool to reduce illness, not one that will save substantial sums. “Pay for performance” or “outcomes” is a little-tested theory that changing the way we compensate will produce better results and save money. Should we really be risking the loss of what we have by nationally adopting changes that are based on the results of a few small studies?
Ideology hampers both the right and the left. We should not let our individual ideology lead us to adopt bad reforms because we are told it is better to do something rather than nothing. The uninsured should be insured—but not by comprehensive policies and not before costs are reduced. Employees shouldn’t lose their insurance when they change jobs—but this can be accomplished without setting up costly government programs. The cost of care should be reduced—but eliminating deductibles and co-pays and imposing taxes on suppliers will have the opposite effect. We should not borrow to pay for reform—but adding taxes or imposing new fees and penalties will also have a negative effect on our standard of living.
There are many positives in the Congressional proposals but it will be a disaster if we accept the negatives in order to get the positives. Where the extension of coverage has been implemented before cost was controlled (Tennessee and Massachusetts), costs have soared. It would be folly to believe that the Federal government will be more adept than the states were. The concepts of universal coverage, community rating, and low-income subsidies are all good, but we should not put the cart (a reduction in the uninsured) before the horse (a reduction in utilization).
The choice is not between either accepting the new insurees and new taxes or staying with the status quo. There is an alternative. Those who want to see true cost reductions instituted before obligating the country to new costs and new taxes must contact their Congressperson, set up chain letters asking others to do the same, and forward this or your preferred alternative with your letters. When it is the public and not a lobbyist involved, it takes intense pressure to get Congress to act. If your point of view is ignored, vote against those who ignore you.
Please read our legal disclaimer.
Write a comment
- Required fields are marked with *.
Bookmark with:
What are these?