From September 10, 2009: Healthcare or Health Cost?

Dear friends,


As I’m sure you’re aware, there is considerable debate right now on healthcare reform and Congress is currently debating over more than 1000 pages of proposed legislation (HR 3200).

Considering that our nation’s political leaders are contemplating spending at least $4 trillion of our (and probably at least 2 future generations worth of) taxpayer money to fund their reform, I thought it might be worthwhile to consider some of the facts (and not the rhetoric) around this debate. Below are some links you might find helpful:

Fact checks on Obama’s speech:
http://blog.heritage.org/2009/09/10/obama-speech-fact-check/
http://news.yahoo.com/s/ap/20090910/ap_on_go_pr_wh/us_health_care_fact_check

Rand Corporation’s thoughts on Senator Baucus’ proposed “coops” (for those of you who don’t know, Rand is a think tank that studies everything from healthcare to war game theory):
http://www.rand.org/commentary/2009/08/19/WP.html

As one of my friends put it (she works at Rand and voted for Obama) – if Obama really wants to reduce healthcare costs, he would encourage everyone to smoke or eat at McDonalds everyday – because unhealthy people are actually cheaper in the long run than healthy people (since healthy people live longer).

Links to the actual text of the bills being proposed (which most of our elected representatives have admitted to not having fully read):
www.opencongress.org/bill/111-h3200/show (you can actually vote here on whether you support or oppose the bill)
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf

There is no link yet for Senator Baucus’ bill – it will not be introduced until next week.

My thoughts

First, I should probably say that I believe that everyone should have access to healthcare. And in our country, it is a misnomer to say that NOT everyone has access to healthcare. In fact, we all – and everyone in this country, citizen or not – have access to healthcare already; if you can be transported to an emergency room, you can get healthcare regardless of your finances. In fact, we have the best and leading healthcare facilities in the world – which is why a lot of people from outside the US come here).

The problem, as our president has pointed out, is how to solve the issue of rising healthcare costs. The problem is that most politicians (and the news media) confuse the ideas of healthcare access and costs with health insurance. What’s worse is the fact that these same politicians seem to think that all our current problems will be solved by creating a solution to health insurance (which they call healthcare reform).

Now don’t get me wrong…I am no great (or even a small) lover of insurance companies; I love them about as much as I love politicians. But I do not think they are the only bad guys here and I have yet to see any empirical evidence that supports the idea that if we introduce a government option or a coop option that this will in fact reduce healthcare costs or insurance premiums. In fact, there is no empirical evidence whatsoever that any of the programs being proposed will in fact do what the politicians say they will. (I mean, let’s consider how incredibly successful Medicare has been. It is a government-run health care option that has done nothing to reduce rising/escalating health care costs – but it has reduced the quality of care many seniors receive and it has resulted in over-testing.)

I do not profess to have a be-all solution to rising healthcare costs and how we can get everyone an insurance card (because apparently once you have one, it will make you healthy and if everyone has one, we will create economic growth…. if you believe the pundits. ;-p) But I do believe the following:

· Increased competition and public disclosure on pricing and performance would result in more competitively priced and better products/services – whether its hospitals, insurers, etc. For example, many states require that an insurer maintain an office(s) in the state in which they provide coverage – limiting the number of providers consumers have access to. What would happen if…. consumers knew how much it would cost them to get a service at a hospital or from a doctor before they went there or if we knew how effective the hospital or doctor was (# of complaints, average experience of providers at a location)? Or if when looking at healthcare insurance coverage, we could see what % of claims an insurer denied?

· Reforming tort law would reduce the number of ridiculous medical malpractice lawsuits that are filed every year – and reduce health providers’ overhead and malpractice insurance costs.

· We should not get rid of health savings plans nor should we require that people have health insurance. In some cases, it just doesn’t make sense. For example, when I was 30, I was told that to continue the coverage I had with my former employer, I would need to pay $430+ a month (Yes that is more than $5000 a year; under my employer, I paid ~$1300 a year of the cost). Yet, my annual healthcare costs were less than $1500 (that’s including dental) had I paid out of pocket. The reality is that health insurance is not really insurance in many cases – it is a managed care program – one in which you likely overpay for services in your youth and may or may not underpay as you get older. (I mean, your auto insurance doesn’t have a co-pay for oil changes and smog checks does it?) (I won’t go into detail on this…but if you ever want to have a glass of wine with me and talk about it, let me know!)

· Health insurance, health care costs and health savings plans should be tax deductible or not counted as part of your taxable income. (That would be one way to encourage people to get health insurance!)

· I also believe that if you have health insurance that your health insurer should cover everything that they promised to cover at the start of your relationship. I’m not sure that spending $4 trillion in taxpayer money to develop ANOTHER insurance option is the way to do that. Maybe having better oversight and more accountability and transparency would.

· Finally, I think that reforming health care will do very little to solve the much bigger problems we have right now. Healthcare reform means very little (and actually will be a further TAX on our resources) if our economy is in the tank/is not growing and people are out of work; it will not solve the auto industry or banking industry crisis; it will not make our education system better; it will not better prepare us for a green economy or solve climate change; and it will definitely not make government more efficient, less intrusive and less wasteful.