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Wednesday, October 14, 2009

Back To Health Care

As Summer gets further away and Fall ensconces much of the country the town hall debates, the protests, the marches, the nasty statements, have settled back into committee rooms and back offices of Washington D.C. and the halls of Congress. Yesterday the Senate Finance Committee finally passed its version of health care reform and it appears headed to the Senate floor. Where it will probably get shot down.

Meanwhile across the building Speaker Nancy Pelosi is said to have gathered her strongest allies in the Democratic Party and is hammering out her own version of health care reform to put through the House of Representatives. Where it will probably get shot down.

In July it was critical, in the eyes of the President and senior Democratic leadership, that health care reform be passed by August, September, now the date has been moved to the November recess. But we are no closer today than we were when Obama took the Oath of Office.

So what to do about health care reform? There are many who feel governments should learn more from the private sector on how to run their business of governing. Health care reform is an area where the practices of private business could lead to health care reform that will be long lasting and positive for America.

First let's take a basic look at the problem. We have a huge amount of press and anxiety in some corners of the country because approximately 30 million Americans do not have health insurance coverage (I am aware that the White House and others have tossed out up to 45 million uninsured "in" America, but this includes illegal aliens). This amounts to approximately 10% of the population. So when it comes to costs of covering these 30 million people consider many of them have the opportunity for insurance but elect not to purchase it, while others are without and truly want insurance. So 10% uninsured that we want insured. Of the 90% with insurance polls suggest that upwards of 85% are satisfied with the insurance coverage they have. So 77% of the population happy with insurance, 13% unhappy with insurance and 10% without insurance but want it. Approximately 90% of those with insurance wish their premiums were lower and quit rising every year at renewal.

From the provider side, doctors and hospitals are getting squeezed by the government for Medicare and Medicaid reimbursements (currently about 18% of charges, due to drop in January) and insurance companies are looking to cut better and better contracts which means less reimbursements. The way the game is played reimbursements are based on a percentage of actual charges, charges must be in-line with other health care providers in a region, so every provider inches up their costs whenever possible to get the inches up in reimbursement. As this goes along government regulations increase the costs of personnel, equipment installation, oversight and other operating factors. Approximately 50% of hospitals in the country operate at a loss, were it not for private insurance reimbursements, which significantly outpace government reimbursements, many of those in the red ink category would close. So providers are getting less and treating more and the hospitals with less private contracts are in danger of closing.

Politics of course come into play on resolving this issue, a factor that is not an issue with the private sector--it is but not to the same extent dealing with shareholders or partners versus an electorate. Politically the President has been hemorrhaging political capital all summer and into the fall. His party has a large contingent that is aligned philosophically with the Republicans on health care reform and there are elections approaching in thirteen months that could cost Democrats the majority in the House, their filibuster proof 60 seats in the Senate or deep dents in those majorities. Passing health care legislation now will give Republicans thirteen months to pick out every issue within the legislation and make a case for how it is bad for the people of Greensboro, Columbia, Lexington or Talladega. It is easy for those on the coasts to say "big deal what they think," but those people vote and elect members of the House, and many of them did not see big margins in 2008.

Boiling this very complex problem into a few items: the overwhelming majority of Americans are satisfied or pleased with their health insurance, a small percentage of Americans are uncovered; health care providers are getting less and less for the same procedures under government contracts that could put them out of business; politically the party in power has an increasingly tenuous grasp on their majority heading into mid-term elections.

So what to do about health care reform? My advice to President Obama is this: take a long term approach and layout a plan for this and future Congresses to follow in a step by step manner, just as a private company would do when overhauling a process that is instrumental to their business but needs to be brought into the current era and technologies.

Were Obama to lay out a plan with time frames that are not days and weeks but rather months and years he would create a vision for Americans to follow to health care reform. Rather than tearing down the existing system that three-quarters of Americans are satisfied with in order to insure 10%, show a path of reform to existing processes and practices that will take several terms of Congress and will probably need to continue into the next Administration--be it his or someone else's. If the plan is working in 2012 he can pretty much guarantee his re-election based on his courage and vision to create a long term plan of reform that is methodical in its process rather than a short term plan that no one has read that is crammed with special interests and payouts that harm the entire system.

Step 1: Having admitted that Medicare/Medicaid is rife with fraud, abuse and waste, Obama creates as new department that only exists for two years, no permanent bureaucracy, that is composed of officials from Justice and Health and Human Services that is charged specifically with auditing the entire Medicare/Medicaid structure and correcting the waste, prosecuting the fraud and eliminating the abuse. With the savings from this audit and investigation contracts to health care providers are raised back to levels that would if not encourage at least not discourage their seeing patients. The remainder of the savings goes back into the general fund to cut deficits.

Step 2: Overhaul private insurance laws nationwide. While I am very much in favor of states rights over federal rights, in this instance the American public benefits if there are not 50 different regulatory bodies overseeing health insurance coverage. Allow insurance companies in Iowa to offer medical insurance in California and vice-versa--watch what happens to premiums when this type of competition is allowed into the marketplace. Next disconnect the insured from their employers and their insurance pools. Small and medium size companies, who employ the majority of Americans, are disproportionately impacted by a severe illness to one of its employees or beneficiaries, have a couple huge medical cases in a few years and watch premiums for everyone skyrocket. Further, too many employees are trapped in their employment situations because of the health benefits, having their own health insurance premiums and health savings accounts allows individuals to pursue better employment opportunities and will increase the efficiency, satisfaction and productivity across the nation. Just as employers make direct deposit into their workers checking accounts for salary and 401(k) accounts for retirement, so too can they make direct deposits into Health Savings Accounts that can be used for insurance premiums and co-pays. Make the individual responsible for seeking and obtaining their own medical coverage with a company, plan, deductible and payment that meets their family's ability and needs.

Step 3: The uninsured in our country already have access to health care, go into the emergency room of any hospital and you will see them sitting there waiting to be seen for routine medical care. Hospitals are not allowed to ration care based upon ability to pay, and the ethical and moral obligations of the health care providers prevent them from doing so as well. Beyond the moral aspect the legal aspect is one that is subject to legislation and enforcement. Allow a national database on uninsured patients, providing personal data such as name, date of birth and social security number, and reimburse health care providers for some of the cost of treatment. Not all of it but some of it. With the tracking the government can issue communications to those who appear to be abusing the system with liens and other fines to reimburse the costs through withholding, tax refunds, etc. Find a method that does not penalize the providers, does not unduly punish the tax payers and makes the individuals responsible for their health.

Sounds simple doesn't it? Present a plan with a realistic time line and reform the existing system within its current framework. It works for business and it would work for government if any of the elected officials had the courage to present a long term plan where implementation goes beyond their term of office. Voters would reward this type of vision and leadership if only given the chance.


Gabriella said...

Hello Dennis,

Excellent write up. This is very similar to the health care proposal I outlined for our state during my 54th Assembly race last year.

On a national level, I would add one more bullet - medical malpractice tort reform similar to what we have here in California. Thanks.

Gabriella Holt

Sheryl said...

Hi Dennis,
I have also given the health care issue a lot of thought and am very worried about. I don't have any answers for suggestions. I would nit-pick with you about the happiness stat though.

I was very happy with my insurance plan 10 years ago. Since then, every year we've had changes to the plan. Bigger co-premiums and co-pays and larger deductables. So while I am still reasonably happy, I know that I won't be able to keep the plan I have now. I suspect that most people are in the same situation. How does the disclaimer go? Past happiness in your insurance plan does not guarantee or predict future results.

I totally agree that insurance should not be strictly linked to employers and it should be easier to transfer or get coverage for those pesty pre-existing conditions.