Category Archives: Congress

Saturday, August 22, 2009

If you’ve been following this series, as legions of you have, you know that I’ve been arguing that the President and Congress should give up trying to craft a single, all encompassing piece of healthcare reform legislation in favor of writing new law on each of the major healthcare reform issues, separately. (If you want to know why I suggest this segmented approach, you need to take a look at “A Bits and Pieces Approach to Healthcare Legislation”, published August 19.) Regrettably, the President and Congress don’t read my stuff on a regular basis, so no luck so far.

Of the five healthcare reform issues I’ve covered, this is the hardest because the costs are potentially so high, because if there is one seminal reason for why we need healthcare reform legislation, this is it.

The first step should be a joint resolution which affirms the right of all Americans to some level of healthcare regardless of their financial means. To be clear, the implication is not the government should provide medical services to anyone. Far from it. I’m adamantly opposed to any government-provided services, including medical insurance. What the government should do instead is subsidize the cost of private sector medical insurance for those who can’t afford it.

In a previous piece on the subject (“Overcharging the Uninsured”) a briefly mentioned that the government might offer a form of guaranty, like mortgage insurance, to underwrite the payment for healthcare services by people who are uninsured. In fact, for what I think are obvious reasons, I’d prefer that everyone be covered by a minimum standard policy. By far and away, making sure that everyone has medical insurance, including the 40 to 50 million Americans who currently don’t, is the most administratively efficient, cost effective and otherwise desirable means of accomplishing universal healthcare.

How much will it cost to provide insurance for the uninsured.? Well, I don’t know. What I do know is that the first thing we need to do is define how and by whom this minimum standard should be derived, and then what this minimum standard should initially cover. This is the proper role of government. Bring together experts from the healthcare and underwriting professions to determine the standard policy we will define as the minimum coverage everyone will have. If the Administration and Congress have already defined this standard policy, my apologies. I’ve obviously missed it. In fact, I think they’re so lost in space in their glorious pursuit of a single piece of comprehensive healthcare legislation, that they’ve missed the most obvious point. You can’t tell how much something is going to cost until you know what it is you’re buying.

What is the minimum policy we want everyone to have? What is the private sector cost of this coverage? How many of our citizens will need how much help subscribing to that coverage? And now, only now will we know how much universal healthcare will cost. Yes, of course, we’ll need to take into account the savings from new government regulations which mediate non-competitive influences that have kept prices above competitive levels. The good news is that breaking down healthcare reform into its core components will make defining and estimating the effects of these adjustments all that much easier when we write the law on this particular issue.

“Check please! …Oh, my God!! Waiter, is that a real number or were you doodling?!” Yes, it’s going to be one hell of a bill. Lots of zeros. Which we’re going to pay for how, exactly?

The good news is that we can start by subtracting the costs we’re already incurring to provide healthcare for the uninsured. How much would we save, in other words, if everyone had adequate coverage? Figure that out, and subtract it from the cost of the program. What’s left we’ll cover either by new taxes and/or by cutting back somewhere else. Personally, I believe in doing whatever it takes, that universal healthcare is that crucial to our society and economy – provided we balance the budget which I’m pretty sure is a concept we’re going to have to explain to President Obama and many Democrats in Congress v e r y s l o w l y. There will be heated debate, but at least that debate will be focused on this specific question rather than confused by the myriad of issues the President and Congress are attempting, in vain, to resolve all at once.

Addressing these five issues I’ve covered, with individual legislation, turns out to have an extra benefit I hadn’t anticipated when I first made the suggestion. That benefit is in all the issues, programs, agencies and government, pardon me for saying so, “crap” that single issue legislation hasn’t covered. We’ve passed 5 laws which have redefined healthcare in America. There’s more we could have done, but major systems need time to transition, something President Obama doesn’t understand. The “bits and pieces” approach allows us time to adjust, to make corrections, to understand implications that we didn’t anticipate. I like the approach almost as much for what it doesn’t try to accomplish as for what it does.

Bit and pieces, ladies and gentlemen, one issue at a time. This notion of comprehensive healthcare legislation is making a mess which may just cause more problems than it solves. President Obama’s notion that some healthcare reform is better than nothing is poor management that smacks of Presidential inexperience and arrogance the American people can’t afford. I understand why the Democrats put up with it, but the Republicans? This is their chance to demonstrate reasoned, intelligent, mature leadership through an alternative approach to the problem. Unfortunately, it’s an opportunity they seem hell bent on wasting.

If you’re interested, here are some related posts…

“A Bits and Pieces Approach to Healthcare Legislation”
(#1: Pre-Existing Conditions)

“Bits and Pieces Healthcare Legislation #2: Overcharging the Uninsured”

“Bits and Pieces Healthcare Legislation #3: Buying Prescription Drugs from Canadian Suppliers”

“Bits and Pieces Healthcare Legislation #4: Coverage for Illegal Aliens”

“Obamination: The Fallacy of the Public Option”

-wf

Friday, August 21, 2009

As the “#4” indicates, this is my fourth piece which promotes the notion that President Obama and Congress should abandon all hope of resolving the problems of healthcare reform within a single, all encompassing piece of incomprehensible legislation. What they should be doing instead is writing new law for the individual issues of this debate, one at a time. This example is about coverage for people who are here illegally. (See the links to related pieces below.)

Well, should we? Should we allow government subsidized resources to be used to provide healthcare services to people who are not legally in this country? No, of course not. The result of doing so would be an overwhelming flow of illegal aliens coming here for medical care. We can’t handle it. We can’t afford it, and the American people aren’t going to allow it.

The one obvious exception will be services for bona fide emergencies. The question then becomes, what do with do with the illegals to which we provide these emergency services after their stay in the hospital is over? It’s obviously something legislation is going to have to address.

Administratively, it’s not complicated. “Illegals,” for the purposes of our new healthcare legislation, are people who can’t present proof of citizenship, other legal status or insurance which is acceptable to the medical services provider.

See how much easier it is dealing with these issues separately? How much simpler and more cogent the debate when the focus is narrowly defined? To be political for a moment, you’d think the Republicans would seize the opportunity, step away from the fray that is comprehensive healthcare legislation and take the lead in this debate, one issue at a time. My guess is, the American people would love them for it.

I can hear them now, at a joint press conference called by Republican leadership in both houses… “We’re not being obstinate. Far from it. We’re doing our job, fighting for the American people. Healthcare, intelligent, affordable, comprehensive healthcare reform is so essential that we are recommending what we to believe to be a smarter approach to developing the legislation the American people deserve. Accordingly, over the next few weeks, Republicans in the House and Senate will be introducing individual pieces of legislation, each addressing a major issue related to healthcare reform which we believe will engender consensus support.” Is this a great country, or what?

If you’re interested, here are some related pieces…

“A Bits and Pieces Approach to Healthcare Legislation”
(#1: Pre-Existing Conditions)

“Bits and Pieces Healthcare Legislation #2: Overcharging the Uninsured”

“Bits and Pieces Healthcare Legislation #3: Buying Prescription Drugs from Canadian Suppliers”

“Obamination: The Fallacy of the Public Option”

-wf

Wednesday, August 19, 2009

Earlier today, I published two pieces encouraging President Obama and Congress to abandon their efforts to pass all-encompassing healthcare legislation in favor of writing new law to address individual issues.* This third example is about protecting the right of Americans to purchase confirmed brand name pharmaceuticals from Canada – and other countries, for that matter.

Earlier this month, President Obama made a behind-closed-doors deal with the Pharmaceutical Research and Manufacturers of America which promised to discourage the importing of their products from Canada, among other considerations, in return for their support of his legislation.** That was a mistake by President Obama for several reasons, not the least of which is that it discouraged competition at the expensive of the American people.

That pharmaceutical manufacturers would sell our Canadian friends the same drugs they sell us, but at significantly lower prices because they can get away with charging more here, in the United States, is equally reprehensible. I do not, however, recommend that our government tell the manufacturers what to charge. Setting prices should be left up to the economy. It’s the government’s responsibility to make sure that economy is competitive – and to do so by regulation, not by direct participation.

Here’s a simple legislative solution requiring well less than the Congressional standard 1,000 pages… Other than protecting us against fraudulent representations on the part of foreign suppliers, there should be no restrictions imposed by our government on the buying of brand name pharmaceuticals, and perhaps generics also, from legitimate Canadian suppliers. Pass that law, and the price of prescription drugs charged by American manufacturers will pushed down to where they belong.

You know, if I keep this up, we may just be able to wrap up the entire healthcare reform problem by later this evening. Ironically, I’ve got to get back to work, making sure we do enough business to afford medical insurance for our employees.

*“A Bits and Pieces Approach to Healthcare Legislation” and “Bits and Pieces Healthcare Legislation #2: Overcharging the Uninsured”, both published today, August 19, 2009.

**”The Not So Transparent Presidency of Barack Obama”, published by the WordFeeder, August 11, 2009.

-wf

Wednesday, August 19, 2009

Earlier today, in a piece entitled “A Bits and Pieces Approach to Healthcare Legislation”, I suggested that the President and Congress abandon their attempt to devise all-encompassing healthcare legislation in favor of writing new law to address individual issues. The example I gave was about resolving the problem of pre-existing conditions. Here’s a second item Congress could also dispatch with speed and efficiency even while they continue to argue more esoteric, more complicated strategies for healthcare reform.

Doctors and hospitals charge their insured patients prices which reflect what has been negotiated with the underwriters – Blue Cross/Blue Shield, Aetna, Prudential and others. Uninsured patients are often charged significantly higher prices for those same services. Why?

The only reasonable explanation would be certainty of payment. The doctor or hospital knows it’s going to get paid by the insurance company, while it may have serious collections issues with some of the uninsured – particularly given than many families who do not have coverage make lower and less stable incomes. The question is, do these price differentials reasonably compensate the service provider for the additional administrative costs and real potential for lost collections?

It’s not an easy question, but rather one which requires research by finance and industry experts which may have already been done and, if not, can certainly be done quickly.

If, as I am going to assume, the uninsured are being over-charged, there are solutions short of providing everyone with coverage. That’s our goal of course, but doing so may take time and/or may be an incomplete process, still leaving millions without any or adequate insurance.

One option is to simply legislate that the price of a medical service charged to a patient must be the same whether or not that patient is insured – and let the healthcare industry and insurance underwriters work out the details. If necessary, the legislation could include a government subsidized default insurance program – the healthcare version of mortgage insurance – to guaranty payment. Premiums would be paid by the uninsured.

Sure, I tend to over-simplify everything, which I actually consider to be positive trait. My personal intellectual deficiencies aside, the bits and pieces approach to healthcare reform is clearly superior to the overly-complicated, often incomprehensible, impossible to explain legislative process our President and Congress are struggling to accomplish. Even if it turns out that individual laws we pass, one issue at a time, need to be revised in light of future revelations, the effect of the approach for its clarity, timing and impact will be well worth these relatively minor adjustments.

-wf

#1: Pre-Existing Conditions
Wednesday, August 19, 2009

President Obama and Congress are trying to accomplish comprehensive healthcare reform in a single piece of sweeping, historic legislation. Good for them, but it’s making my head hurt and doing nothing to instill confidence in the outcome.

Why not address the myriad of component issues in separate pieces of legislation? For example, the issue of pre-existing conditions.

Medical insurance underwriters give extra value to large businesses who subscribe to their programs. It’s a form of volume discounting which is supposed to reflect the administrative savings the underwriters enjoy by virtue of the centralized management of so many individual accounts.

In and of itself, there’s nothing inherently wrong with at the least the concept of volume discounting. The problem here is the extent to which the price of coverage is being discounted, and in the non-pecuniary, high value benefits that the underwriters are allowing.

What’s really happening is that the underwriters are competing for large clients in a way they don’t feel the need to compete for small company and individual family business. It is discriminatory pricing which has too little to do with the actual costs of medical care. As a rule, small business employees and unaffiliated Americans who would buy individual and family coverage are no more likely to become ill, and no more costly to treat than the employees of large companies. The underwriters are discriminating, not because it makes good economic sense, but because they can get away it. Existing law and new healthcare legislation can stop that.

There are two issues here. One is whether or not the underwriters are over-discounting to large clients at the expense of smaller companies and individual families? More to the point, is there anything truly non-competitive about their behavior – not just undesirable, but non-competitive – that existing law, aggressively applied, may be able to regulate? If there’s a problem, and if we need new legislation, okay, let’s do it.

The other issue is that underwriters waive pre-existing condition rules to attract large account business. That practice has no real economic basis and can be discontinued in a single piece of highly specific legislation not much longer than this posting – and upon which almost everyone in Congress, on both sides of the isles, can agree. Americans will love the initiative for its clarity and the sense of progress this single piece of legislation represents. The President’s polls on the issue of his management of healthcare reform will improve – as will Congress’ which have nowhere to go but up. And we can all focus our attention on the next very specific healthcare issue on our agenda, whatever that might be — one problem at a time.

There. That was easy. (Thunderous applause, followed by feigned modesty and, “Thank you. Thank you very much.”)

-wf