Saturday, November 14, 2009

Universal Health Care Possible - But There Will Be Losers

Last week my local PBS station aired a fascinating program comparing different countries health care systems. The program, Sick Around The World, can be viewed online, and I highly recommend that anyone reading this post to watch the program before proceeding.

I came away with two conclusions:

First, universal health care that is affordable is indeed possible, but to implement it there will be two economic losers: doctors and and insurance companies.

Second, the health care bill that recently passed in the House of Representatives, H.R. 3962, will NOT reduce costs, and is in fact a monstrosity that will cost Americans a lost of money without providing better or more affordable care.

Here is why my claim is true: the economic losers in many countries are doctors, insurance companies, and pharmaceutical companies.

It seems simple, even cliche, to say this, but if medical costs are to be reduced, then someone must make less money. In many countries around the world, the two entities making less are doctors and insurance companies.

It seems a little strange to learn that insurance companies in several of the countries visited by the show host are non-profit corporations, but that is indeed the case. Governments dictate how campanies insure individuals, and they dictate the premiums that they can charge. REmoving the profit reduces the cost of care to the individual.

Doctors are almost always limited by the government to certain rates that they can charge for procedures, and no doctor can charge more. But since the government is the single payer, the amount of paperwork and administration is mush reduced as compared to a United States practice, saving enormous amounts of money. Further, malpractice tort law has been reformed in every case, reducing the malpractice insurance premiums for doctors must pay, further reducing costs.

Finally, every single one of the countries presented in the program use government bargaining power to negotiate with pharmaceutical companies bulk pricing on everything from drugs to MRI equipment, reducing costs even further.

All of these measures, and others, reduce the cost of health care, but the losers are doctors, insurance companies, and pharmaceutical companies.

This program exposes H.R. 3962 as the farce that it is: all of the economic losers, doctors, insurance companies, and pharmaceutical companies, have made their deals with Congress and the Obama Administration to avoid the necessary concessions that would have to be made to accomplish real health care reform.

Doctors have lobbied long and hard to avoid a reduction in the Medicare payment schedule that has for years been touted as necessary to avoid unsustainable Medicare costs. There is not reason to suppose that payments to doctors will be limited under any new health care plan.

Insurance companies have eagerly come on board to support the plan because there is an individual mandate that every person in the United States must enroll in a "qualified plan". resulting in millions of new premium-paying customers for the insurance companies.

The United States government under the "leadership" of President George W. Bush, abandoned any attempt to negotiate volume purchasing discounts with pharmaceutical companies, and there is no indication that such negotiations will be authorized by H.R. 3962.

And we finally come to another large winner in the health care debate, to which almost every Congress member (Democratic AND Republican) is beholden: trial lawyers. They have successfully prevented any kind of tort reform, meaning that malpractice trial awards will continue to be astronomical, resulting in very high malpractice insurance premiums, which further squeeze doctors.

H.R. 3962 is not a reform of the health care "system". It is a massive new entitlement program, one that is going to make the middle class pay for the coverage of the poor, under penalty of fine and imprisonment. It is an entitlement program that will NOT reduce the cost of medical care, which will continue to increase faster than inflation, causing the entire issue to be revisited in a few years when people realize that they have been duped. It is an entitlement program that will be impossible to repeal if it is once implemented, throwing and economic anvil to taxpayers drowning in a sea of increased costs.

The final two indicators of how much this bill stinks can be found in two facts: first, the Congress has exempted itself from being covered under this plan, and second, the effective date of this law is 2013, the year after President Obama will presumably be safely elected to his second term in office.


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