Faulty reform

Most Americans support health care reform. I find however
Obama’s and the Congressional Democrat’s proposals flawed in three
major areas
First is how to pay for it. Second are substantial implied
rationing or reduced availability of health care to seniors and
lastly the impact on the insurance we have.
The Obama administration relies on so-called savings. Most
dubious is $550 billion in productivity saving derived in part from
initiatives like electronic medical records. Those who initiated
electronic medical records many years ago report major gains in
patients but minimal savings. Another is saving from Chronic
Disease Management alternatives through treatment at clinics or
hospitals, which potentially is a good idea but untried. If these
savings are not achieved some Congressional Democrats want a major
tax increase to kick in impacting high income taxpayers and small
businesses reporting as individuals.
Additional cuts in Medicare funding are more subtle, as were
Obama’s public comments when pressed about rationing. The Obama
administration proposes cuts in long term care, home health care
and inpatient rehabilitation, all of which translate to major
reductions in accessibility to health care for seniors. If one’s
opportunity to access Convalescent Hospital care or Sub Acute care
in a hospital or even at home care, is cut, how could you call it
anything but rationing?
In order to evaluate the impact on one’s existing health
insurance, one has to look at the details to the so-called
government plan and other provisions. First, one must recognize the
Medicaid services that are proposed, which increase the hidden tax
(or subsidy) on those who buy insurance, be they individuals or
employers. Secondly, the government plan even if through an
insurance exchange would, under the House bill, impose so called
fixed negotiated Medicare reimbursement rates which are about 15
percent below doctor and hospital costs, causing insurance carriers
and healthcare providers to make up the difference, again from
those who buy insurance.
That is the difference between Medicare reimbursement rates and
those of private insurers, the majority of which are large
corporations or Trust self insured plans or not for profit plans
like Kaiser or Blue Shield. As the difference grows between the
government plan and other insurance plans, one can see accelerated
movement of people to the government plan until the point down the
road when the insurance industry goes out of business. The Obama
promise that we can keep our existing insurance over time is not
true.
Other elements of the plan enjoy wide support. One is an
individual responsibility to buy health care insurance. One-third
of people without insurance are those typically younger who make a
deliberate decision to not carry insurance, many under
union-negotiated cafeteria plans, who can afford the premiums.
These are the people who when they face a major need go to the
hospital emergency room. This category also represents the highly
publicized few who file for bankruptcy because of excessive medical
bills because they are not eligible for hospital charity care
discounts. Other uninsured groups are the illegals and the poor who
slip through the cracks or the unemployed. Former President Reagan
supported the concept of individual responsibility to have health
care insurance just as we have to have auto insurance.
Other consensus elements of the reform discussion include
removing the ability of insurers coverage because of pre existing
conditions. Those enrolling in medicare at 65 don’t face this
limitation nor do those enrolling in AARP or State employee or
retiree plans so why should others?
There are a number of obvious reforms proposed over recent years
that were ignored. First is the need for tort reform to stabilize
the skyrocketing cost of medical malpractice insurance. Second is
to reverse the 1997 FDA action which permitted for the first time
prescription drug advertising, which according to CalPERS and the
New England Journal of Medicine has been the primary driver of
increasing health insurance premiums caused by a doubling of cost
of the 100 most commonly used prescription drugs. Big Pharma did
propose some saving and pledged to help fill the so-called Medicare
Part D donut hole for more lower income people but retained a
prohibition against reimportation from Canada, which Obama had said
he would lift and open up the drug market to more competition.
The Obama and Congressional Reform plans do not address the
inequities in the current Medicaid or Medicare programs. These
include the unfair Medicaid (or Medical in California) Federal
share when it comes to high income states in New England or
California or the Urban/Rural reimbursements and designations under
Medicare. Some view the proposed regional disparity actually
compounding the current problem and making things worse.
While proposing increased portability of health insurance the
Obama plan lacks concrete enabling legislation that would allow
increased numbers of businesses to buy insurance across state lines
or more importantly to allow small businesses to buy insurance or
self insure in large numbers achieving the necessary economies of
scale. The Obama and Congressional Democrat Plans do not require
insurers to offer plans in counties with large percentages of
seniors as a handful now do to keep their costs and rates down.
We need healthcare reform but I am afraid Obama’s plan doesn’t
cut the bill.
Kurt Hahn is a Board Member of the North Sonoma County Hospital
District.