THE COMING ‘OBAMA-CARE’ TRAIN WRECK
TODAY’S NEW YORK TIMES (6-22-09)
“The three different House committees working on the legislation hold a flurry of hearings, the Senate health committee resumes its public drafting sessions, and the Senate Finance Committee continues its intense back-room negotiations in an effort to bring down the cost of the legislation and find common ground on how to pay for it.
“In the Senate, the initial cost estimates by the Congressional Budget Office left lawmakers with severe sticker shock. And the joint bill unveiled on Friday by a trio of powerful committee chairmen in the House seemed to offer Americans even more generous health benefits, suggesting an even higher price tag.”
The current hard sell is like pushing bypass surgery on someone who just needs cholesterol reducing meds and daily aspirin. Worse still, the bypass that is proposed will actually starve the heart, eventually requiring a new one. By that time, the only option will be a crude mechanical heart, one size-fits-all, and a wheelchair. We are on the precipice of a legislative catastrophe, one that risks permanent damage to the best health care system in the world.
THE PRESIDENTIAL CHALLENGE
On June 10, the president said that affordable health insurance is “an economic imperative, but it’s also a moral imperative.” He went on to tell the crowd that the “next eight weeks is [sic] going to be critical. And you need to be really paying attention and putting pressure on your members of Congress to say, ‘There’s no excuses – if we don’t get it done this year, we’re probably not going to get it done.’”
And he added this challenge: “To those who criticize our efforts, I ask them, ‘What’s the alternative?’”
A SANE RESPONSE
Mr. Obama, your partisans are disturbed by that irritating, in-house truth teller, the Congressional Budget Office, whose cost numbers are chillingly honest. There is no realistic scenario in which the pending utopian plan, however the costs are disguised, does not come with a huge tax burden. You have asked for an alternative. There are several sane ones. Let’s have a look….
The health-care partisans are in a headlong rush towards an autocratically administered “single payer” model that presents the risk of degrading or even destroying the finest health care delivery system in the world.
Their core proposal creates a covertly subsidized, federal plan to “compete” with the pay-as-you-go, over-regulated “private” plans. But that is a loss leader, analogous to the corporate behemoth that uses predatory pricing to destroy its rivals then takes over the market. But instead of wringing out profits from the customers who were undercharged as a lure, the health care “reform’ partisans are planning something even worse.
This is a “bait and switch” game: First the government “reform” will offer unaffordable arrangements at cut rates. This is just to ensure political buy-in, counting on the magical thinking of an enraptured congress the less tightly wrapped members of which are still willing to pay the bills with fairy money. Because the proposed level of care is unsustainable at cut rates, the government will then be forced to substitute reduced care levels for the 80% who are already generally satisfied with their care. Why will this inevitably happen? When entitlements are created, the money will run out. This is a political axiom, like night follows day. When cost containment fails, as it must, taxes and fees will go up dramatically. When voters complain about that (and they will because taxpayers and politicians will eventually refuse to fund exponentially growing open-ended entitlements), the government will be forced to cut budgets.
Over time, services will be reduced until the socialist equilibrium is reached: equally mediocre care to all at bloated costs.
Top-down, bureaucratic cost containment has a clear history: It always fails. The pathetic attempts of government bureaucracies to imitate market-driven efficiencies are like drunken Cossacks plodding their way through a ballet. Subsidies prop up prices. Bureaucrats are clueless when asked to produce real efficiencies, but they do know how to reduce performance. The inevitable budget cutbacks are always felt in delayed diagnosis and treatment (check out Canada, the UK and Europe – follow the treatment exodus to the USA). Soon we get questionable clinical decisions to deny “costly” therapies, then…finally, a health care system that begins to resemble the Soviet model: The politically favored get reasonably adequate service and everyone else is left standing in line. Want to see how difficult the achieving recovery from that end-state would be? Have you visited the new Russia lately?
This well trodden path would be foolish to take in the best of times. During a recession it would be flat out insanity. Fortunately, a growing number of Blue Dog Democrats are beginning to see this scheme for what it is. Should the answer simply be NO? That would be far, far better than the poison-pill entitlement scheme currently at the prow of the “reform” juggernaut. But there are realistic alternatives. If moderates and conservatives take up the president’s challenge, here in outline form is what their response should look like.
- Incremental reform. We are living through an economic crisis, not a heath care crisis. Global, top down “reform” proposals have failed in better times, and they deserve even more to fail now when the consequences of making bad policy are amplified tenfold.
Better portability and access. The proposal is for “better” not perfect.
No new unfunded (or under-funded) entitlements. See the financial crisis referenced above.
Address the real problems. These are the three categories of health care problems that affect most people some of the time and some of the people all of the time:
(a) Increasing the portability of insurance coverage; (b) Improving basic care access for the indigent; (c) Containing runaway costs.
Note that these problem areas are presented as “Needs improvement”, not “Crisis demanding radical solutions”.
- Make incremental, testable progress. By addressing the real problems realistically and gradually, there will be an opportunity for a progress metric, allowing for self correction and adjustment.
REAL WORLD REFORM
PORTABILITY AND COST CONTAINMENT
Americans need to be retrained to go to a physician or a clinic (see indigent services below) for routine care. The common, real world patient experience is that direct pay-for-service prices are priced lower than subsidized services, particularly when all costs and charges are widely posted. Pre-tax income should be voluntarily allocated to medical care accounts, whether directly by an employer or an individual, whether in a lump sum during a tax year (for a credit if the money had already been subject to federal income tax withholding) up to 10k per individual or during the tax year as non-taxable income.
These funds can be freely transferred and shared, within a family or circle of friends, or when a charitable campaign is organized to assist a deserving patient. Prepaid medical cash cards will be developed and used for this purpose (see indigent services below) for the needy.
Hospitals, physicians and clinics will be required to post actual costs and prices and given incentives for discounts, including a tiny subsidy for accepting credit card payments (offsetting the bank-lender fees).
Expanded, shared risk pools:
In cooperation with state governments and private insurers, the government will insure shared risk pools that contain a sufficiently large mix of patients to offset the high-cost patients. The resulting per-patient cost then is shared by all private insurers who buy into the pool, subject to the federal guarantee. Note: The scope of the guarantee is carefully limited, though it can be augmented by state, municipal and charitable supplements.
The risk pools should be assembled incrementally, but available nationally as they come on line. An illustrative example of the first pool: $4,500 deductible per condition or per year for serial conditions, with a $1 million cap. Private individuals could buy in directly; private insurers could contract to fold the group in to a package that expanded coverage at either end. Each fiscal year, the prices would be reevaluated by industry and government actuaries.
Means-tested, “free” clinics:
The requirement that no one can be turned away from an emergency room would be relaxed whenever a hospital, otherwise subject to that mandate, facilitates the establishment of a qualifying clinic nearby to which the hospital contributes at least one physician on call and a nurse practitioner. The financial arrangements are to be kept flexible, with an expectation that private donations, religious or otherwise, could be commingled with public resources, including volunteer medical staff protected by law from all but the most extreme malpractice claims and other work restrictions. Ditto: all qualified volunteers.
These are to be structured as not-for-profit entities, loosely affiliated with the parent hospitals that would establish operating standards but would be fully insulated by law from all liability.
Fees for service would be scaled, a nominal fee for all (to be waived in extreme cases) up to the full fee. Credit cards and prepaid medical cash cards accepted. Prescriptions issued. Generic drugs offered at cost.
Fast Track Medical Bankruptcy:
A separate, streamlined bankruptcy procedure will be established for medical expenses only, debt discharge limited to the medical ones plus ancillary debts directly related.
At the bankruptcy court’s discretion under rules established by that court, for good cause additional bankruptcy filings can be entertained before the current waiting period for regular bankruptcies.
Generic Drug Program:
Any drug withdrawn from the market by its patent holder or primary manufacturer after the original patent has expired becomes “public domain” after the expiration of one year from withdrawal.
All disputes relating to the public domain issue, including those arising from controversies concerning the asserted scope and duration of the patent(s) or grounded in clams for compensation based on “public taking” grounds will be referred to the courts for expedited eminent domain proceedings; these courts are empowered to reasonably compensate the patent holder or aggrieved licensees for any taking.
A list of all reasonably efficacious generic medicines would be maintained and posted by the FDA. All listed generic medicines may be manufactured and sold within the USA or outside for sale in the USA without restriction, at the market price or they may be donated below that price without restriction.
FINDING THE BRAKES
Blue Dog Democrats are beginning to get the message: DON’T SCREW THIS UP FOR OUR CHILDREN AND GRANDCHILDREN.
The American people are profoundly uneasy about ‘health care reform” for a good reason. A one-party political machine is currently at the controls of the runaway train. POTUS and this congress have jammed the in-box with spending so far beyond the national means that the unpaid bill is staggering. The train is running out of control and our president fears a loss of momentum?
We should fear a coming fiscal train wreck. That will be difficult enough to endure without adding the unnecessary destruction of the best health care delivery system in the world.
Will the forces of reason and restraint acquire the necessary backbone in time?