Health Care Reform Debate (or People Is So Stupid)

Continuing on yesterday\’s topic from Alex…

As Americans debate “Health Care Reform” there is a lot of misinformation out there regarding what the Obama administration is proposing. Just watch Fox News for any length of time and you’ll hear plenty. But I just read a Yahoo! News article that shows what the public believes versus what the administration states their goals are.

Here’s an excerpt from the article with poll results; along with some commentary form me:

67 percent of respondents believe that wait times for health care services, such as surgery, will increase (91 percent of Republicans, 37 percent of Democrats, 72 percent of Independents).
First off, one has to hope/assume that this is only in relation to the “public option” plan. It wouldn’t make any sense that wait times would increase across the board. Also, is waiting all that bad? We hear/read/see instances of people waiting years for hip surgeries in countries like the United Kingdom; but unnecessary surgeries is far more dangerous and wasteful (NYT Article on the topic).

About five out of 10 believe the federal government will become directly involved in making personal health care decisions (80 percent of Republicans, 25 percent of Democrats, 56 percent of Independents).
Again, this has to be related to the public option (which I am not a fan of, but for the sake of argument let’s say it’s happening). Wouldn’t some sort of public option that had government involvement in decisions be better than not having any insurance at all? It certainly wouldn’t cost a consumer any more; it actually might save them money. Part of what you buy with your health insurance premium each month is a steep discount on what a doctor would charge compared to if you walked into the office off the street with no insurance. At any rate, not to validate some of the myths, but the administration has not done a great job of outlining and refuting many of these myths. I would recommend that people turn off the talking heads on TV and actually read what happening or watch some unbiased coverage and you would see that they are not looking to set up a 1980s style HMO with government officials making judgments on who should get what procedure. That is a decision between a patient and a doctor and it should/will stay that way.

Roughly six out of 10 Americans believe taxpayers will be required to pay for abortions (78 percent of Republicans, 30 percent of Democrats, 58 percent of Independents).
I’m not sure what “required to pay for abortions” means. People are required to pay taxes, government dollars support some clinics where abortions occur, ergo you are already required to pay for abortions. Health care reform has nothing to do with abortion.

46 percent believe reforms will result in health care coverage for all illegal immigrants (66 percent of Republicans, 29 percent of Democrats, 43 percent of Independents).
There is no evidence out that that substantiates this as true. On the flip side, the administration again hasn’t done much to prove that this isn’t true. Uninsured illegal immigrants are able to get treatment today for serious health events (ER visits) but generally have to pay for non-emergency treatments. While it is costly, it seems appropriate for this to continue.

54 percent believe the public option will increase premiums for Americans with private health insurance (78 percent of Republicans, 28 percent of Democrats, 58 percent of Independents).
I actually believe this is true, although the reason behind this is more complex than most people think. What happens today is that providers (doctors, hospitals, etc.) lose money on Medicare and Medicaid patients because the payments the government puts out for those patients is lower than the costs for the provider. So the provider cost-shifts that to the private insurance groups, which means that those of us who are covered through work or an individual policy, we pay more money to make up for the losses the provider sees with Medicare/Medicaid. Insurance companies have seen this time and time again as state governments struggle with budgets and make cuts on government health plans, the provider crank up the rates for their privately insured populations to make up the difference. A public option (with no major changes to how providers are reimbursed) will increase premiums for privately insured Americans.

Five out of 10 think cuts will be made to Medicare in order to cover more Americans (66 percent of Republicans, 37 percent of Democrats, 44 percent of Independents).
Same thing. Probably not true, but who knows since the Obama administration has done such a poor job of communicating their goals

The Yahoo! article then closes with some items that I believe are meant to look good for Obama/Average Joe American:

Fewer participants believe \”myths\” regarding the impact of proposed changes on current health insurance coverage. For instance, less than 30 percent think private insurance coverage will be eliminated. And just 36 percent think a public insurance option will put private insurance companies out of business.
In addition, only three out of 10 respondents believe the government will require the elderly to make decisions about how and when they will die
Wow, “just 36 percent”? That still means that millions of people are stupid, and the types of people who believe those sorts of thing tend to be very vocal.

So what should we be doing about health care?

Everyone seems to think that the insurance companies are to blame. And it’s easy to think that. Many people see the insurance company as getting in the way of health care, and when you see stories of CEOs getting paid over a billion dollars, you can’t help but raise an eyebrow. My recommendation is that all states adopt (or a federal mandate) something similar to Minnesota where all HMO (that has more to do with the licensing than the actual business model) must be not-for-profit entities. Now not-for-profit doesn’t mean the companies don’t make money, it just dictates how those profits are used. It would also prevent these companies from issuing stock. Stock does have some advantages, but it also brings a lot of baggage. In my opinion that is baggage that health care doesn’t need. Along these same lines I would mandate that providers (hospitals, clinics, medical equipment companies) would also be not-for-profit. Health is not a place for profit.

The average Minnesota health insurance company gets by on 1-2% of profit each year. How does that stack up with other industries?
2002-2004 3 year average (courtesy of Almanac of Business and Industry Ratios)
Average (%) – Industry
3.6 – Apparel
13.8 – Computers
5.1 – Construction
2.6 – Investment Banking and Securities Dealing
8.6 – Motor Vehicle
1.4 – Retail
21.0 – Real Estate
26.3 – Software Publishers
6.1 – Waste Management

With that being said, if you look at where the costs are within health care the lion’s share resides in Medical Spend, which is the amount of money paid out to health care providers. If people want real change in health care, that is the place where all the action is. The industry must change how providers are reimbursed.

In today’s world doctors charge on a per widget basis; getting paid for every visit a patient makes, every test they prescribe, every result they interpret. It leads to over prescribing, unnecessary surgeries, and (compared to much of the world) poor outcomes. What if we paid providers based on outcomes. For example, you go to the doctor because you have severe abdominal pain. The doctor says your appendix is about to burst. So you get an appendectomy. The provider gets paid for the appendectomy. But if you have complications, like an infection get you in the hospital during recovery, that’s on the provider to cover.

This won’t be easy. Health care is quite possibly the most complex industry in America, and the most heavily regulated. We are long overdue for change, but the changes must be across the board, not the simple fixes being proposed by politicians in this sound bite society we live in.