Wherein, I bite the hand that feeds me. But for the common good.
In the November 17, 2008, issue of Business Week, Catherine Arnst writes:
Health-care reform is crucial to most U.S. corporations as they recalibrate for an Obama Administration. The reason is obvious: About 60% of Americans receive health insurance through their employer. . .But for business, extending coverage to the 45.7 million uninsured is secondary to to bringing down the cost of health care, which adds up to 16% of U.S. gross domestic product and rising. . .The cost of insuring employees will increase by almost 7% this year, with no relief in sight (Italics added).
“Bringing down the cost of health care,” for Business, is the primary issue. Believing that there is some magic bottom line that constitutes enough “bringing down” to include the uninsured is just that: magic, or at least, magical thinking. That moment of acceptable cost does not exist. Setting a percentage is meaningless. Setting a maximum that a given employer would have to pay to cover their employees is equally meaningless. And using that as the criteria for when to add coverage for the 46 million Americans without health care insurance returns to magical thinking. It has no rational solution for solving America’s need for radical health care reform and universal coverage.
It will not work. Period. Yet, as stated in Business Week, that is what Business believes is their only solution. The real solution, however, is simple in concept but admittedly complex to implement.
The solution is to extend health care benefits to all Americans over a very short period, say one year. I’m quite aware that this is a defibrillator approach, but it is the only strategy that will give policy makers and the health care industry a true picture of the scope and financial support that will sustain the program over time. And health care in the United States is close to going into cardiac arrest. The symptoms from the “disease process” can no longer be sustained.
Any other approach will create a implementation nightmare and waste billions of dollars. For instance, if a ten year plan is created, who gets onto the plan first and who decides that, and by what rationale? You might exclude those who already have health insurance, but then you still have to decide in what order the 46 million uninsured will be admitted to the coverage. That’s a lot of people, and those who can’t get in early will be in an uproar. Undoubtedly, an army of lawyers will take up their cause and sue all the way to the Supreme Court. That process alone, coming from every state in the Union, will cost millions of dollars coming right out of the taxpayers’ pocket. And not one dollar of it will have gone to providing health care to a single American.
What about letting the states come on line over a predetermined period of time with the coverage? But how do you decide which states get to go first? The big ones, like California, Florida and New York? In terms of population that would create the big expense hit to the coverage early on. In the mean time do you give the states waiting in queue supplements to their health plans, or the money to create one, until their number comes up? Since the United States is in a recession, each state is in a recession to varying degrees. Their legislatures will howl with indignation over having to put up part of the money to get some health care coverage to all their state residents until the federal program kicks in. The pressure on Congress, even those in the right wing who hate the whole idea to begin with, will be enormous, to get their state on-line ahead of the others. Think of it as a pack of 50 hungry dogs biting and scratching for a piece of meat. That would not be pretty.
There is good news, however. Senator Max Baucus (D-Montana), Chair of the Finance Committee, has decided to move full speed ahead on getting health care access for all Americans. In the November 12, 2008 New York Times, Baucus is quoted:
“Every American has a right to affordable, high-quality health care,” Mr. Baucus said. “Americans cannot wait any longer.” Far from being a distraction from efforts to revive the economy, he said, “health reform is an essential part of restoring America’s economy and maintaining our competitiveness.”
Sen Baucus states precisely what I have been advocating since I began this blog: A healthy America will produce a nation of unparalleled personal, social, and economic strength. The Times also reports in the article that the pending Obama administration has voiced support for the idea even as they prepare to grapple with the financial crisis.
As of this writing, I have not yet had the opportunity to read Sen. Baucus’ plan, but once I do, you can be sure I will post my analysis of it.
But a dark storm still covers the health care industry landscape. The annual rising cost, that Catherine Arnst points out above, will be at least 7%. The question I have not heard addressed is, in a contracting economy, how can the health care industry justify that kind of increase to its consumers, which, is basically all of us? All sectors, the AMA, pharmaceuticals, health insurance, durable medical equipment, expendable medical supplies, medical technology, hospitals and care facilities (both for-profit and not-for-profit) and all other medical services are being hit equally hard by the economic meltdown and the growing recession. What is the rationale to continue this out-of-control inflationary cycle?
The answer, in my opinion, is that the health care industry has a dirty little secret. Just like the financial sector, they believe the bubble will never burst, and, are practicing the same kind of extravagant managerial compensation practices just like the AIGs have been.
The critical question is, how much of that 7% (and all the annual increases for decades in the past) is a true reflection of needed development in the industry and how much has been to support managerial salary excesses? Just like the banking and monetary trading industry, because there has been little accountability and oversight to the public, i.e., their customers paying the bills, and no transparency for their actions, health care executives have been living high-off-the-hog by hiding in plain sight. Unbridled corporate greed, no different than Wall Street’s. Another blessing of strangled regulation laid bare.
Since I am a capitalist and not a socialist, and I understand that companies are in business to make a profit, and that, in fact, that profit positively supports our economy, the solution must strengthen the health care industry across generations so they can effectively serve the health care needs of all Americans.
The health care industry, however, must make sacrifices to contribute to the common good. They have no right to complain or insist on an exemption, so that everyone else has to play by the rules while they go about their merry way. They should be working with Congress and aggressively working on a new paradigm that will transform the way they do business, where their first obligation is to the health of America. Period. That includes the American Medical Association, whose plan I have criticized in previous postings because it does not come close to the needs of that new paradigm for health care reform.
My radical idea is that health care costs be frozen until the new universal health care system is in place and implemented as close to 100% as possible. Accompanying this freeze would be acceptance of a new set of regulations, similar to those being developed for the financial industry, that creates reasonable accountability and transparency, but also supports new avenues to make profits to benefit both the companies and their shareholders.
The billions of dollars that would be saved by all sectors of the economy, would provide a chance to adjust to universal health care, be a huge benefit to large and small businesses by controlling their costs during the transition, be an equally huge benefit to individuals and families trying to survive the economic impact of the recession, reduce hospital and health care facilities’ expenses, and medical service providers costs, allowing them to catch up and also adjust to the changes brought about by universal care.
Nobody gets to sit on the side lines and pretend the world has not changed. The health care industry is the cornerstone for the foundation to build a new, health America. They have to be fully in the game and play by the new rules that are essential for the health of the nation, both its people and its economy.