2009 Health Care Reform Update

I’m often asked by clients what my take is on the massive efforts to reform the nation’s health care system.  This article sums up best where we are in the process as of November, 2009. It’s not inspiring.  The article by Paul Zane Pilzer helps us all understand the current direction. Yes, reform is needed, but is this it?

The Real Reason We Need Health Care Reform — Cost Print E-mail
Every U.S. citizen is challenged with getting affordable health insurance for themselves and their families. Congress seems completely out of touch with the real issue since most elected officials receive free lifetime care for themselves and their families.The single most important problem with health care is that it costs too much. The U.S. spends much more per person on health care than any developed nation and our population is the sickest of any industrial country.

There are hundreds of reasons U.S. health care costs so much relative to how little we get for our money. Some of these reasons include:

  1. We pay medical providers for each procedure (even if the procedure is fatal) rather than pay medical providers based on the outcome of each procedure.
  2. We have no caps on legal liability for medical mistakes. This causes medical providers to waste billions on tests and procedures of dubious value, some of them dangerous, just to limit court settlements.
  3. We have very limited competition. For example, it is still illegal for a health insurance company to sell coverage across a state line.
  4. We pay virtually anything for sickness industry costs once a person is ill, but virtually nothing for wellness industry costs to keep patients healthy in the first place.
  5. Medical providers charge different patients wildly different rates — from $10 to $100 for the exact same procedure or treatment — based on the network in which the patient is a member. These rates are hidden from the public and, generally, the poorer you are the more you pay.

Yet, incredibly, almost all the proposals now being considered in Washington do nothing to reduce or even slow the growth in health care costs. The reason is opportunist political appropriation — more of it than we may have ever seen in our lifetimes.

When the debate began on how to reform health care, each medical provider special interest group lined up their favorite legislators to get their support.

  • The American Medical Association, representing doctors, was promised that nothing would be done to cut payments to physicians or tie doctor payments to performance.
  • Trial lawyers were promised that no caps would be put on legal liability for medical mistakes.
  • Big Pharma was promised that nothing would be done to their net revenues — even things like giving Medicaid patients generic vs. brand-name drugs were taken off the table.
  • Local insurance companies were promised that they would not have to compete with larger national insurers over state lines.
  • Medical network providers were promised that there would not be “transparency” — the varying charges medical providers give each patient would never be disclosed.

U.S health care reform started out with a noble goal — get health insurance coverage for the millions of Americans who want coverage and are currently slipping through the cracks. Unfortunately, the House has passed its version of health care reform, and we have been sold out.

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