BSI Facts and Fiction
Obamacare and Religion
by lawrence thompson on 02/27/12
I am getting a bit tired of hearing all the rhetoric around
the recent mandate by HHS that all health plans provide contraception etc.
under the Obamacare law.
First did no one read this monster when it was passed? I
have been talking with faith based organizations about this segment of the law
since 2010. Did folks just think that this segment of the law was going to
miraculously go away? Just like so many other sections of Obamacare this is
another example of government over reaching in its regulations.
Here are the basics. The law says that all health plans have
to provide coverage for contraception and abortion services by 2014. Faith
based companies and other employers are clearly upset by this. The outrage
seems clearly focused on the federal government trying to mandate that plans
offer contraception even if they don’t wish to base it on religious beliefs.
While I too am outraged at such presumption and hubris on the part of the Obama
administration, we have much bigger problems.
The most serious of them is that the federal government is
trying to circumvent existing legislation and regulation of certain health plans
and force them to provide specific coverage. Specifically the feds are trying
(and might be succeeding) in circumventing ERISA. A self-funded employer today
has the choice of what benefits they want to offer in their health plans – as
they should. This right is provided for under the terms of the ERISA
regulations. Since 60% of all insured Americans are in self-funded plans this
represents a massive shift in the private health insurance industry. It also
sounds the alarm that our current administration has decided it is going to
override ERISA and remove some of the founding principles without public or
congressional approval. This is huge.
Let me be more specific. If Obamacare can decide at will
what benefits will be federally mandated and can force those benefits into self-funded
and insured plans then defacto we have a federal health plan or certainly the
infancy of socialized healthcare. This is nothing short of outrageous.
So while I empathize with the religious groups and
understand their indignation, the problem is actually bigger and much more
devastating than just a difference in beliefs. We can’t run a competitive
society if our largest industry is about to become a federal bureaucracy. Look
at the condition of the Social Security and Medicare programs. Do we really
think in our current economic condition nationalizing healthcare is a prudent
fiscal strategy?
Some may argue that now is the perfect time as we can cut
costs and thus be more competitive on the world stage. Sadly this reasoning is
fraught with several fallacies. First is that we can cut costs. When has a
government run program of any kind been lower cost than a private sector
venture? How long of a transition will this process be – 5 – 10 years? What
happens to our economic results in the interim? How competitive will be during
this transition? What will the national plan do that we can’t do privately?
Sadly it will eventually implement all the reforms I have been advocating for
more than a decade and maybe even more. Here are a few – they will quickly
eliminate all PPO networks and opt for Medicare based pricing; they will ration
healthcare over time; they will establish parity in drug pricing globally; they
will decrease if not eliminate broker compensation; and they will eliminate
state mandates in favor of a new set of federal mandates.
All of these reforms could be done in the private sector
with the result being a rampant decrease in healthcare costs and a significant
decrease in annual healthcare inflation. More on this is a subsequent blog.
So as the debate rages on Obamacare versus the religious
organizations remember that this is the beginning of a very serious paradigm
shift in healthcare reimbursement in the US and the impact on our economy will
be devastating and long lasting.
Obamacare Loosing Support
by lawrence thompson on 01/19/12
It appears that Obamacare is loosing support nationally. Recent polls are showing less Americans are in favor of this contraversial legislation. Here are a few of those polling results:
In a recent AP poll, about half of the respondents oppose the health care law and support for it dipped to 29 percent from 36 percent in June. Just 15 percent said the federal government should have the power to require all Americans to buy health insurance.
Even among Democrats, the health care law has tepid support. Fifty percent of Democrats supported the health care law, compared with 59 percent of Democrats last June. Only about a quarter of independents back the law.
In late December, a survey of 501 physicians was released by the Deloitte Center for Health Solutions research group, whose parent company serves clients in the health care industry. Nearly half (48%) expected health reform to hurt their incomes this year, while 73% said it would not reduce costs.
In a September Jackson & Coker online survey of 1611 physicians just 13% of those surveyed backed the Affordable Care Act.
And there is still a majority who would like to see the law repealed according to a recent Rasmussen survey. It showed 57% of Americans still want to see the Obamacare law overturned in Congress via legislation to repeal it. The latest Rasmussen Reports national telephone survey of likely voters has 46 percent strongly favoring repeal. Just 37 percent oppose repeal and only 25% percent oppose it strongly.
Here is our opinion:
The legislation was not targeted at the root of the US healthcare problem - COST. Without significant changes in the cost of healthcare we will not be able to cover all Americans. This is a very complex industry and is the largest in the US. Millions of Americans work in the industry and every segment has explicit defensive opinions and strong well funded lobbys.
We will blog more about what ails the healthcare system but for now the short answers are these:
- We have too many mandates. As of today there are over 1963 mandates for coverage - most are state mandates. In all they accounted for nearly 20 cents of every premuim dollar paid for health coverage. While we support states having the right to tailor coverage to their populations, many mandates are very political and emotional and do not address a popular need for care.
- We have too many layers in our delivery system. Providers should deliver care, insurers should take risk and administer payments, and feds/states should regulate solvency, compliance and administer government programs (maybe). We don't need PPO's - we have Medicare as our national fee basis. We don't need multiple PBM's - lets have one non profit funded by all participants. Drug pricing should have worlwide parity - we should not pay more than Canada. Lets simplify things thus eliminating layers of profits and overhead. This does NOT mean loosing our private healthcare system. Our estimates show we could cut $500 Billion a year and cover everyone.
- Provider costs must be standardized. The medicare payment system as a national PPO will eliminate over $100 billion in excess costs. Yes it is true some providers will be paid less while others more. Add quality measures and pay for outcomes not transactions and we will make America a leader again.
- Administration is inefficient because we do not use all the technology available. While this peice is small compared to the cost of care, we must drive efficency. Physicians, facilities and payers must connect electronically, eliminate paper, and deliver a seamless administrative system that is user friendly and easy to understand.
Stay tuned to this Blog for more information about how we can make US healthcare truly the best in the world at a cost that keeps us competitive with any country. we encourage you to share your thoughts.
