Saturday, May 30, 2009

Health care realities - Dealing with Health Reform Realities

Hell is paved with good intentions.

Samuel Johnson, in Boswell’s Life, 1775

In finance everything that is agreeable is unsound, and everything that is sound is disagreeable. Expenditure is always popular; the only unpopular part about it is the raising of the money to raise the expenditure.

Winston Churchill

If you can’t stand the heat, get out of the oven.

President Harry Truman

As I write, Congress is on vacation, but it will soon be back in the Washington oven to deal with red-hot health care issues – how to pay for it all given anxieties over,

• a continuing recession with rising unemployment,

• mounting federal deficits, unaffordable health care costs,

• making care affordable with harming a growing health care economic sector and its constituents wo supply many of the jobs in their district,

• meeting public demands for easy access to medical technologies,

• creating a public plan that may make health care more inaccessible by driving hospitals and doctors out of business by paying them at Medicare and Medicaid rates.

• Fending off but pleasing lobbyists who fill their political coffers

Political Realities

Senators Ted Kennedy and Max Baucus are split on how to finance President Obama’s ambitious, fold, and unaffordable health proposals. Kennedy favors a public plan that looks like Medicare, while Baucus is reluctant unless the public plan makes private plans more affordable for all Americans. The financial honey-pot is the $300 billion now spent yearly in tax-free benefits that employers now enjoy for providing health benefits for employees. But doing that means making a political U-turn and embracing the Republican plan, which candidate McCain announced and Obama denounced during the campaign. Republicans fear a public plan would drive private plans out of business and lead to a single-payer system, or even worse, a public plan that would pay at Medicare rates, 20% to 40% below private rates.

Financial Realities

How to pay for it all? It is now clear, the Medicare “savings” proposed by President Obama are unproven to work and would only be band-aid in raising capital to cover proposed expenditures, estimated to be $1.5 trillion over 10 years. The alternative to raise expenditure is to raise sin taxes on tobacco, alcohol, and soft drinks, and by extension, anything else fattening, artery-clogging, pleasant, sedentary, or involved in the “pursuit of happiness.” Taxing health benefits at least has the benefit of punishing business. Then there’s VAT. Ezekial Emanuel, MD, the brother of Obama’s chief of staff Rahm Emanuel and Obama’s go-to-doctor, is calling for a VAT (Value Added Tax)to pay for every American not entitled to Medicare or Medicaid benefits with no deductions and no co-payments. Unfortunately VAT is an open-ended invitation to entitlement growth. Then there’s the recession. USA Today reports federal tax money is down 34% over last year, $138 billion less in April alone, making how to pay for federal largess even more problematical.

Personal Realities

Meanwhile I am making final corrections on the proofs of my book Obama, Doctors, and Health Reform. In it I give a kaleidoscopic multiple-points-of –view picture of the U.S. health care landscape. I place the odds for sweeping Obama reform at 30/70.

It’s going to a long hot summer for the reform debate. If you think health care is expensive now, just think of the consequences of a government-run system superimposed on the present system.

One of the great ironies of the current debate is that President Obama says, “We’ve got to get it done this year,” but his administration has yet to introduce a detailed reform proposal, and instead, waits for Democratic allies to work out the specifics – and to take the heat if it fails.

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