Health Care Reform – My View

We’ve recently been having discussions with a variety of people and reading and listening to a number of public statements on health care.  I have read the four-page table of contents and parts of the 1018 page  Dingle House bill as it existed about a week ago.  It is heavy going but interesting.  It has three Divisions: Affordable Health Care Choices, Medicare and Medicaid Improvements, Public Health and Workforce Development.  It does not reflect the ideas presented below.

I have reached some conclusions that make sense to me.  I am a registered Republican but for some time I have felt disconnected from what the party has become.  What follows below is apolitical.

The Need
The fundamental point is that everyone needs to be covered by some form of medical insurance.  It is a moral issue.  When it comes to illegal aliens there is some wiggle room, but since they already get medical care in emergency rooms, we might as well include them too, at a lower cost.

Some say that we don’t need medical reform because anyone can get emergency room care.  However, emergency rooms are not a substitute for appropriate medical care. In the first place they are too expensive for many of services they provide.  Doctors’ offices and urgent care clinics are the most appropriate and economical place for much of what goes on in emergency rooms.  Secondly, preventive medical care is what people need, and nobody goes to the ER to deal with obesity or high blood pressure until it is too late.  The nation’s medical costs will be reduced if we develop more universal preventive care practices.  And we will feel better.

I have heard that the death rate for children under one year in Europe is 4 per thousand while in the US it is 6.3 per thousand.  Although there are differences in the standards of measurement, it says something about the quality of our health care.  We can do better, and part of the solution is better preventive medicine.

The Public Option
I believe we can and should expand Medicare as the “public option”.  For the most part, people on Medicare are satisfied with the service they receive.  The fact that Medicare is “running out of money” is due to a number of causes including the aging of the population, fraud, and the high cost of medical care in general.   We absolutely need to fix the fraud problem.  The aging of the population is an actuarial fact that we just have to accept.  The high of medical care is discussed below. It looks like the “pay as you go” approach will not work for Medicare and so we will have to accept substantial support from the government (your taxes) as is done in other countries. Our schools don’t pay for themselves, and neither do our libraries.

Consider the United States Post Office.  It provides excellent service.  The fact that you can use a competing service at lower cost in some cases may be that they can at least theoretically tailor their service to minimize their costs, while only the Post Office is legally required to provide economical service to everyone no matter where they may live.

In effect, the US Post Office is the “public option” for mail delivery, with UPS, Fedex, etc., playing the role of independent providers.  The analogy soon breaks down, but it does provide a starting point for discussion.  The point is that they are an example of public and private service providers that successfully co-exist and compete with each other.

We would need to charge a reasonable price for the “Public Option”, which will allow private insurers to compete. They may not make money at the same level as they do now, and that’s why they are lobbying so intensively, and apparently, successfully so far.

We would need to subsidize those who cannot afford it.  Of course this is a tricky issue, and one which will need fine tuning along the way.

Another tricky issue is how to handle people in marginal categories such as illegal aliens, people who have not yet gotten green cards, those who have, and so forth.  I think that is a matter, while extremely controversial, can be worked out and must be worked out.  It cannot be allowed to divert us from the overall goal.

Insurance providers should be required to accept clients with preexisting conditions, and should be prevented from dropping patients with poor medical histories.  Portability would be a feature of all future insurance coverage.

There are many details to be worked out, and that is, in part, why the proposed bills have so many pages.  We have to rely on our legislators and their staffs to get it right, or at least close to the mark.

The Cost of Medical Care
The high cost of medicine, is to a certain extent, a separate issue.  Two reasons for the high cost seem to be 1) Our current fee-for-services approach to medicine, and 2) The lack of tort reform.

The fee-for-services approach, which pays a doctor for each test or procedure performed, provides an incentive to provide services that might be only marginally necessary, especially when justified on the basis of defensive medicine as a result of lack of tort reform, as a result of which some settlements are unreasonably large.

The Mayo and Cleveland Clinics operate at low cost and provide excellent medical care and service.  They operate as multi-specialty clinics and the doctors are on salary.  That doesn’t mean they are not well-paid.  They are rewarded for the quality of the care and service they provide, and not the number of procedures they perform.  Can we extend that model?  I think we have to. Not every multi-specialty clinic would have to be a center of excellence as the Mayo and Cleveland are, but the others could provide excellent care with the doctors appropriately rewarded, which should mean well-paid.

Tort reform would require bucking the lawyers’ lobby, and Congress is dominated by lawyers.  I don’t have a high expectation of solving that problem anytime soon, but reform is needed.

The high cost of medicine cannot be allowed to divert us from the goal of acceptable health care for all. High medical costs are a problem that requires a solution, but we can’t do everything at once.

I am not qualified to comment on the effect of medical care reform on our national budget and deficit.  We can probably agree that we have spent much more than the cost of medical reform on activities that have returned significantly less value. Regardless of the cost, it is something that must be done.

The Need for Leadership
Achieving the goal will take the kind of Presidential leadership we have not seen in many years.  At a minimum, Barack Obama will have to bring his own party into line, and hopefully convince many others that it is time to “do the right thing”.  As journalist and commentator Bill Moyers said on Bill Maher’s “Real Time”, it’s a moral issue.  “We need to care about each other.”  If Obama is beholden to insurance companies and/or pharmaceutical companies, he will have to cut himself loose and take the political consequences.  It could cost him a second term, but it might instead make his place in history.

I would be pleased if you would add your comments to the discussion.

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4 Responses to Health Care Reform – My View

  1. Hi John,
    It’s a difficult topic, regardless of your political beliefs. I’m a Christian and am registered Republican, but sometimes it seems that the Democrats do the more “Christian” thing in providing for the poor. So I applaud them for wanting to provide health care to those who don’t have it.

    I’m no expert, but here are a couple of my thoughts. First of all, you said that the number of infant deaths as a percentage are higher in US than in Europe. Good point, and I’m sure that statistic is related to the lack of preventative medicine in the U.S. But for every one statistic I’ve heard like this, I’ve heard 5 statistics about how the life expectancy in other countries with socialized medicine is lower than ours, especially when you add a medical condition like cancer, heart disease, or a need for a transplant to the mix. It’s hard to see through everything the media throws at you and find the truth of the situation. I wish I had time to dedicate a few hours per day reading about this, but I just don’t, so it’s very confusing.

    Next, we keep hearing that 47 million people have no health care coverage. But of those 47 million, how many do you think are in their 20’s and 30’s and have no health care insurance because they are healthy and choose to have no coverage? I, myself, did not purchase health insurance until I turned 28. From age 18 to 28, I exchanged taking on the risk of needing expensive health care for keeping the premiums in my pocket.

    Then how many of those 47 million are illegal aliens? I agree that they should have some sort of essential medical care offered to them, hopefully at lower cost than ER care, but I admit, I do struggle with the age old argument about why people who don’t pay taxes should be receiving benefits from my taxes.

    Lastly, how many Americans truly “cannot afford” health insurance premiums? Let’s be clear. “Can’t afford” should be defined as “No cell phone, no internet at home, no cable TV, or going out to eat and to a movie all the time.” For the majority of Americans who say they “can’t afford” something, what they mean to say is it’s not as big of a priority as the other luxuries they’re not willing to give up in their lives.

    In short, I agree that we need to subsidize those who cannot afford it, but if people like me are going to be footing the bill with my tax dollars, I say these should only be people who really can’t afford it. There should be an application to qualify for this free health care, and on it, there should be questions not only about their income, but how they spend their income.
    No free handouts. It’s like how you get unemployment income only under certain circumstances, and only continue to get it if you are looking for a job.

    Lastly, I’m a life insurance and annuity agent. I work as an independent insurance agent representing various insurance carriers. Not all of the carriers I represent provide health care, but some do. I’m concerned about how any of the proposed plans will affect the carriers I represent. Do you have any thoughts on this?

    Nice job summarizing the issue, John. I appreciate your sincere concern about the subject.

    • jfistere says:

      Hi Chris,
      I think you raise good points about the validity of the health statistics.

      Regarding healthy people in their 20s and 30s, I would say that one basic concept of insurance is to spread the risk as broadly as possible. It would be advantageous perhaps to require all people to contribute, if we as a nation really are committed to health care insurance for all. That way it would not be insurance for just the higher risk people.

      Regarding insurance carriers, and a public option, I don’t see why they can’t compete with other, as long as a level playing field is established. It seems to work with the US Post Office and the other delivery services.

      I’ve heard that one impediment to efficient, transportable insurance coverage is that companies are required to offer state-by-state coverage, rather than on a national basis. As an insurance person, what do you think about eliminating that restriction?

      I’ve been hearing more about what a good service the VA provides. Perhaps that would be a better model than Medicare/Medicaid. Do you have any information or an opinion about the VA as a model?


  2. jfistere says:

    Thank you for your comments, which are indeed constructive.

    Regarding the coverage of pre-existing conditions, I see that a transitory issue, because in a few years, if all people are covered, there will be no such thing as a pre-existing condition, and the issue will be moot. If we believe in coverage for all, we should step up now. If that is show-stopper, that feature could be abandoned.

    Regarding portability, it would seem to me that both the employer and the insurance company are involved, but it different ways. Employers offer better or worse insurance plans, depending on their employee recruiting and retention strategies. However, it seems to me that basic coverage should be made portable so that a person is always covered regardless of employment.

    When you say “That is not what the company was organized to do.” It appears you are talking about the insurance company, and I would say that’s what it should be organized to do.

    With regard to multi-specialty clinics, not every one has to be a boutique “rarefied” operation. An Urgent Care facility has some of the elements of what is needed. Perhaps that model could be adapted to provide more complete staffing and services.

    The Cleveland Clinic has clinics in Ohio, Weston, Florida, Toronto Canada, and Abu Dhabi. The Mayo Clinic has clinics in Arizona, Florida, and Minnesota. Hopefully they will continue to proliferate, and alos more “average” facilities will develop.

    I agree with you that people are overwhelmed with the expected cost of what the government is trying to accomplish. And the President must focus on what’s most important. We all have our own priorities. I don’t think he can “get past health care [reform]” by abandoning it. I do think our economy and our people are resilient enough to handle the expenditures needed, although I can’t substantiate that belief. There are no easy answers.

    Thanks for your comments.

  3. Ernest Pepples says:

    Re Health Care Reform

    Limits on malpractice recoveries never seem to make the grade because of the heavy political contributions the trial lawyers make to both parties. Their biggest contributions have gone to the political campaigns of the people now running the Congress and the White House.

    You don’t expect a property insurer to issue a policy on the car after it’s been wrecked. If a home owner’s policy covers storm damage to the roof, but excludes damage from storm water that backs up in the basement, the policy holder cannot insist that the company cover both kinds of loss. Why is health care different?

    An insurance company is not at fault for declining to cover pre-existing illness. Or for excluding portability. Requiring it to do those things is to change it’s business character. That’s so even if the government graciously were to provide for a premium increase for writing such insurance – BTW none of the schemes under discussion do that. That is not what the company was organized to do.

    Insurance is protection against a bad future situation; covering a pre-existing condition or extending portability would be charity, a safety net.

    The references to Mayo and Cleveland Clinic fail to mention that those programs have not been easy to replicate. Mayo took 10 years to get its FLA clinic up and running, which may be the only other facility it has. But more critically, Mayo and Cleveland are special rarefied creatures. They are boutique operations unique to the areas they operate in and therefore, should not be considered a workable template that can be imposed by centralized government.

    Americans want to help people who do not have health care insurance. They are shell-shocked this Labor Day, however, with concern over the never-ending loss of jobs in the economy and, most especially, over the heavy casualties and loss of life among US soldiers in never-ending wars.

    The President needs to focus on those issues. He risks being the rookie who throws a live ball in the dugout. He throws away his mandate when he advocates so much money and effort for other issues, rather than addressing the things that most concern the people. He had some good thoughts when he originally proposed helping people who do not have health insurance. Do you think he could return to those points? Get past health care, and start showing that he is actively dealing with the economy and the wars?

    Your post on health care reform is very generously, thoughtfully and carefully constructed and the foregoing is offered as constructive comment.

    Ernie Pepples

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