Is health care reform dead? Part 2
February 7, 2010 by Mike · 8 Comments
OK, so by my thinking we need an insurance mandate to reduce the ranks of the uninsured not because it’s their right or the country’s obligation but because it’s a national economic imperative in order to address a long-term financial crisis. In addition, we want to prevent our insurance companies from dropping coverage when someone gets sick, ending coverage when a ceiling on payments is reached, or denying coverage to someone with a pre-existing condition (though I agree with the GOP view that there is no reason a sickly person is entitled to pay premiums equal to those of a healthy person). The premium should be higher but not so much that it becomes unaffordable or with co-pays that drive people into personal bankruptcy. So the insurance companies get a huge crop of new customers, many of them young and healthy, but they also are required to continue coverage on the sick….fair trade.
The GOP plan calls for opening insurance across state lines to reduce cost. I’ve addressed that a bit but just to be clear: this idea makes enormous sense and I’m not clear on why the Dems rejected it. There are definitely issues that need to be dealt with not least of which is taking away individual state control and effectively making state mandates meaningless. I wonder how insurance companies feel about this? Certainly those with major operations in states with big mandates cannot be happy about the prospect of seeing customers abandon them for states with fewer mandates and less expensive basic plans. And there would also be serious administrative issues – is my doctor supposed to suddenly accept coverage from 500 different insurers around the country? But there also needs to be a standard federal minimum, much as was described under the public option, that caused so much angst among conservatives. The requirement, as I define it, would probably be met by the current policy accepted by the state with the fewest mandates and lowest premiums and is meant to prevent me from opening Mike’s Insurance (closed Wednesdays for golf), selling you a health insurance policy for $50 that covers hang nails, but allows you to call yourself insured….it prevents a “race to the bottom” among state insurance regulators to attract more business to their states by reducing mandated coverage.
The GOP plan also calls for tort reform which I addressed at length in a post last fall. In a response to Part 1 one reader commented that “Just passing some type of tort reform would have a resounding effect. The doctors wouldn’t have to order every test under the sun for a patient, just to protect himself from being sued.” This has become a mantra among Republicans but I’ve not seen any evidence to support this view. I don’t really understand why conservatives feel so strongly about this issue (it always gets the biggest response from the audience) – I find it an affront to my right to a fair trial. But I see no reason not to include it in a health care reform plan if it will mollify a significant group on the right. The actual savings from tort reform is expected to be quite small (the CBO put savings from tort reform in the GOP plan at $41 billion over ten years) and I wouldn’t want to count on that in any plan because the Illinois Supreme Court just overturned the state’s medical malpractice law as unconstitutional (kind of my point above). One clear benefit: lower malpractice insurance costs keep more doctors practicing in fields and locations that have been losing practitioners. If nothing else, that alone may make medical malpractice reform worthwhile.
Does tort reform help reduce “defensive medicine”? Not much evidence to support that view either but if it helps then great. But I think the Dems offer a better alternative to address this practice – a medical standards board (MSB). Let’s immediately distinguish this from a “death panel” which I have always felt was a pathetic, but effective, political ploy. There are certainly ethical questions in elderly health care that are worth addressing – but not here. My view of the MSB is to define, for instance, proper emergency care for a cardiac patient. Today Hospital X may treat a cardiac patient with steps A thru M while Hospital Y may treat with steps A thru Q. If a patient dies at Hospital X the family gets a lawyer who hires specialists who say “you missed steps N thru Q and if you’d taken those steps the patient would be alive today.” So instead we now have hospitals doing steps A thru Z where the last few steps are purely defensive medicine. If we have a national standard of ER care for cardiac patients across the country that says “Take steps A thru P” and those steps are followed then these lawsuits end as does wasteful defensive medicine in this area. Now extend that to other practices and procedures. It’s a minimum level of care that meets established and safe medical practice but without limiting a doctor’s flexibility to extend treatment where necessary.
How do we pay for this? I support the Senate plan of taxing Cadillac health plans but without the carve-out for unions or anybody else. I have no problem with increasing the Medicare tax on high income earners but I actually have a different idea on this subject. As I’ve mentioned before, I am bothered by the fact that our health system revenues are insufficient to meet our expenses. So what I think we should do is to increase Medicare taxes (currently 1.45%) by 1% on everybody and at the same time reduce personal income tax levels by the same 1%. The effect is roughly zero on all taxpayers but it reallocates revenues where they are needed and forces our government to focus its attention on the expenditures it can actually change – defense, education, farm subsidies, earmarks, etc. This seems a no-brainer to me but it’ll never happen. Politics will get in the way.
There’s my health care plan without the bells and whistles. I had the CBO vet it and it will save $3.5 trillion dollars in the first ten years. Have at it.
Good read, good facts and interesting ideas. I mentioned tort reform in the other post, only as one important piece of the puzzle. My father is a retired physician of over 50 years and tort reform is of course at the top of his list. You mention a medical standards board (MSB), but who will be choosing the members of this board? If the Government mandates a MSB, then of course they will have a say in who is on this board. And is it really the Government’s job to provide everyone with insurance? Why can’t each state handle it’s own health care issues? Governing closer to the people the better. Just my thoughts, I certainly don’t have the answers.
USAWatchmen´s last blog ..A Tea Party With Sarah Palin
Mike, in your statement:
>>”The GOP plan calls for opening insurance across state lines to reduce cost. I’ve addressed that a bit but just to be clear: this idea makes enormous sense and I’m not clear on why the Dems rejected it.”<<
Perhaps it is because an out-of-state health plan isn't going to have a local provider network. Therefore, the costs of an out of state plan may be more than an in state plan which depends upon local networking to keep prices low for a particular plan.
David W. Walters´s last blog ..War sucks
Mike, the funding part (Increase medicare taxes by 1% offset by a 1% general tax rate reduction, along with raising the ceiling on rates for the wealthiest earners) is OK by me.
David W. Walters´s last blog ..War sucks
How can anyone argue with this plan?
You know I have some issues with tort reform, in that it appears to be a tool to appease a large special interest without any evidence that it decreases costs for anybody but that group. But I do agree that this is a good negotiating tool, as long as consumer rights continue to be strongly protected. In the states that have enacted tort reform that the right has most loudly lauded, not only have insurance and medical costs risen but consumer rights and the basic value of life has been decreased. So smart tort reform? Sure. but not an across-the-board pants-drop at the expense of everybody ut doctors.
There would be one thing I would add: Consumers need a clear, concise and timely avenue of appeal/protest/resolution if they are denied coverage. With a system that will be encouraging/allowing more and more people to get private coverage, it is imperative that some new standards be put into place. The current system allows for much secrecy on the part of the insurer. It is possible to be denied coverage and, after months of asking, still not know WHY. I’ve been there…A lot.
The idea of “pre-existing” conditions has been stretched by the insurance companies to mean anything they wish. They have the absolute freedom to deny converage without ever considering whether the “pre-existing condition” actually still exists. Much of this is about formulas: If an insured spends a certain amount of money for an illness, any future insurer (and I’m talking about private insurance here) can easily see the numbers/conditions and immediately reject with no further “lookback”. Thus, someody seeking insurance who once had an “event” but is no longer affected by it is judged and penalized not by current health but by the amount they ONCE spent.
Should private insurers continue to be allowed to ignore current health/complete resolution of problems when risking out an individual seeking coverage? If there is a mandate for converage, it is imperative that the answer to this is “no”. Allowing an insurer to deny coverage- or even charge more for it- based on a onetime, “no-fault” condition is a lot like an auto insurer penalizing a customer for an accident that wasn’t his fault. Doesn’t happen with reputable companies.
Could you give some examples of states that are worse now because of tort reform? Texas implemented tort reform back in 1995. Since then about 8.5% of their economic growth is the result of this reform. They have added thousands more jobs and insured thousands of un-insured
citizens. Looks like the special interest group is the people. Maybe Mr. Obama should give Rick Perry a call.
USAWatchmen´s last blog ..A Tea Party With Sarah Palin
USA-
Funny that you mention Texas. In the post Mike mentions above (and I think on another place in this blog) I have dealt with the realities of the tort reforms in that state. Feel free to take a peek, but the basics are that, although malpractice insurance immediately dropped for doctors (and the good thing is that doctors came in by the droves) the end result for the consumer wasn’t the same. Insurance costs for consumers skyrocketed at 7 times income, and there is no evidence that suggest that costs have dropped.
There is no doubt that the doctors have benefitted, but also no doubt that consumers have not. And, since HC reform should address cost reductions in health care, this state’s tort reform has failed.
I am, however, interested in the economic boom due to tort reform. Please share your source.
Here is one source:
http://www.tlrfoundation.com/files/tlr_perryman_factsheet_final2.pdf
But it does appear that there is no mention of the actual Health Care costs.
Of course growing up with a father as a physican makes tort reform an important issue with me.
I did find a very good website with excellent stats on Health Care.
http://www.statehealthfacts.org
USAWatchmen´s last blog ..A Tea Party With Sarah Palin
Thanks for the link. There is a great debate between Texans who say that the great gains were more a result of the 1995 reforms and general economic expansion in the 90s. Translation? Two Governors (Bush and Perry) fighting it out for credit!
Business expansions in the medical fields and the effects notwithstanding, you are right: Nobody is touting that these reforms actually did anything to lower medical costs or costs for consumer insurance. In fact, during this reform period after both the 1995 and 2003 acts, insurance costs in Texas rose a staggering 40%, and have continued to rise often faster than the rest of the nation. Result? Top five in the US for the most expensive premiums. Link below.
http://www.chron.com/disp/story.mpl/editorial/robison/5753428.html
My point with tort reform continues to be that it is a side issue that has absolutely no proven relevance in decreasing either medical or incurance costs for the consumer. And, in Texas as you’ll see from link, even the doctors’ groups are getting hosed with higher premium costs that are forcing them to buy cheaper policies with fewer benefits.