Phil Hauck's TEC Blog

Sunday, February 28, 2010

Thoughts On the ObamaCare Plan Problems

Why does Congress think that the solution to the health care dilemma lies in insurance pressures.
It is not the responsibility nor mission of a sickness insurance company to provide for the U.S. population. As private enterprises, their job is to carefully judge the next year's risk profile (likelihood of needing care, and for how much cost) of a prospective customer ... and to put a price on it based on the going rates in that community. The prospect can accept or reject. If many people have high risk profiles, as many of us increasingly do, and the going rate/cost is more than we can afford, then they go without. Don't blame the insurance companies.

Right now, we have too many people with high risk profiles (30%-40% of us are obese, for instance, with all that brings along with it ... asthma, diabetes, cancer, joint repair and replacement, etc.) and a too high "going rate" ... driving the premium costs very, very high. (Of interest, our Healthy Lifestyles Co-op just went through our three-year re-ratings of members, and the new premiums came in very, very high; indeed, we know of at least five companies who will now go without insurance.)

So, how do we "provide" for those who can't afford private insurance? Not what Congress is doing.

Here's what Congress is trying to do: Effectively, give everyone access to sick care ... with service coverage for what they can't afford provided by the "larger entity" ... the "larger entity" being an insurance company if they can afford it, or if they can't afford it, a "public option" that will be funded by the American people or Medicare funded by the American people. (Note: There is no Congressional requirement that any of us pursue a lifestyle that will do much to keep us away from needing the system, and as many of us know, when something that we want is free, we use lots of it. Why not? Think open bars.)

Congress would theoretically force cost savings by cutting the Medicare reimbursements to providers (even for prescriptions?). Right now, the provider system isn't efficient or effective enough to operate at current Medicare reimbursement levels ... and cutting them further just might force some cathartic reorganization of how sick care is delivered (we're still ignoring incenting people to healthier lifestyles). (And Congress doesn't have a great track record of rebelling against lobbyists and actually cutting the income levels of a huge industry. Where are the unions?) Actually, that cathartic reorganization might probably happen, which might be very good.

In the meantime, we will have what other countries have: We will have more people trying to access the same number of doctors/providers, so waiting times will go up. We will probably have fewer people wanting to be doctors given the cost of education/skill development and lesser income levels, exacerbating the access challenge. We will need to think about funding grants for health care professional education. Under Medicare cash controls, the ROI for developing new medicines and diagnostic equipment will be lower, reducing the incentive and investment levels for medical advances. You've read about other implications as well.

As we know, when government tries to keep up with advances so as to adjust its regulations and other controls, it's always behind the times as well as being conflicted when change is happening at a high rate.

All of the above is to explain in a different way, perhaps, why government control won't work ... why the current effort should be defeated and why Congress should immediately think through what the ideal system would look like, and enable it. What will work is for Congress to determine what the best structure of the key elements would be, and then to enable them with regulations, incentives and penalties.

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