Congress fails to meet health care deadline

side note: While not yet a major part of the healthcare debate, the author argues that the high cost of malpractice insurance encourages doctors to practice defensive medicine that costs up to $225 billion in unnecessary annual expenses. We have all experienced this at some point, your doctor tells you that you must do a certain test of procedure, and you look at him at wonder to yourself, “why”?

by Alan Portner

Congress will miss President Obama’s deadline for passing health care reform and go home on summer recess. Important changes to health care insurance and delivery systems will be passed out of Congress before the end of the year and finally signed into law.

The debate surrounding these changes will remain so contentious and complex, it is impossible to predict the final form that reform may take. Dozens of different factions have a dog in this fight, but a few puzzle pieces are beginning to appear out of metaphorically smoke-filled antechambers on Capitol Hill. We are starting to understand how the average citizen may benefit from reform.

Denial of coverage for people with pre-existing conditions will probably be outlawed. Lifetime limits on coverage look like they may go away. Rate differentials based on gender or family situation stand a good chance of being prohibited.

Age rating, which makes insurance so very unaffordable to middle-aged workers, will be restricted, but not totally eliminated. A 2007 – 2008 comparison of annual insurance premiums by the health insurance trade association (AHIP) says the average individual premium for buyers at age 60 is 438 percent more than premiums charged to buyers who are 18 years old. A maximum allowable limit of double the lowest offered premium seems likely.

A minimum acceptable package benefits has been left to be defined by the Department of Health and Human Services. Existing programs will be allowed to continue as they exist today, but plans that do not meet minimum standards must self-identify themselves to participants.

People who like their current plans will not be forced to change. People who like their doctors and hospitals will not be asked to change. Your plan may be more transportable when you change jobs.

There will be new emphasis on prevention and immunizations. Many co-payments for prevention may be eliminated or reduced. Health insurance marketplaces will be established by state or regionally. Local, non-employer based nonprofit association groups may be formed to expand availability and allow for risk pool that exert leverage leverage when negotiating rates. These groups and others will be more heavily regulated to require cash solvency reserves and ensure against abuses and fraud.

Smokers will find themselves rate penalized for their habit. More controversial is the possibility that overweight people may find themselves in the same position. Dr. Thomas Frieden, director of the Centers for Disease Control and Prevention, told newsmen this week that obesity contributes $147 billion annually to the nation’s health tab. Over time, weight may become politically incorrect. Employers will be incentivize to promote healthy lifestyles.

Younger people, many of whom are uninsured in the false belief that they are invulnerable, may remain insured on parental health plans through age 26 to reduce the number of those uninsured by choice.

Health care workers, including doctors, will get relief for the cost of some educational expenses. Some funds will be re-channeled to increase Medicare and Medicaid reimbursements.

Professional panels of experts (from the medical community) will establish “best practices” for most patient ailments. One suggestion for tort reform (malpractice protection) endorsed by some in the medical community would hold physicians harmless from litigation if they have followed prescribed “best practices.”

This proposal is not yet surfaced on Congressional radar screens, but should be considered as a method of reducing the practice of defensive medicine accounting for nine percent or $225 billion in unnecessary expense annually. This kind of tort reform would remove the incentive for unnecessary testing, but allows for actions against incompetent practitioners and recovery of legitimate damages.

Health care coverage will likely become more available to those who can currently afford it the least and partially subsidized in some yet to be determined method by those who have the most plentiful resources.

A Bush era device similar to the Base Closing Commissions (BRAC) for medical decisions may be given some teeth.

When it came time to reduce the number of U.S. military installations, Congress recognized that local political interests made individual decisions untenable. Instead, a commission was appointed to make periodic recommendations. The Congress then agreed to or voted down the entire commission recommendation without amendment. This had the effect of eliminating politics from these painful decisions.

A similar process is being considered for “best medical practices.” The commission MEDPAC already exists, but has, up until now, just served jn an advisory function.

Less clear is whether these changes made will actually bring down the overall cost of health care… not just to government, but to the nation as a whole. It is clear that the total cost of ten years will be deficit neutral to the government. Between the combined, released 1700 pages of proposed legislation’s and an unknown number of added pages from two additional Congressional committees still to surface, the devil will surely be buried in the details.

Most stakeholders have finally agreed (after 64 years of Presidential discussion) that the current system is fiscally unsustainable. All interested parties have contributed their public support to the efforts in hopes that their participation will limit personal financial damages.

Harry and Louise, those famous representatives of the big Pharma (who played a significant role in defeating the 1993-94 Clinton reforms), are back this time to support change.
Hospitals have made commitments to reduce cost increases over ten years. Insurance companies have agreed to accept a mandate that requires all persons carry health insurance. Business wants to reduce expenditures that have become less and less affordable.

The AMA, the largest physicians group, has endorsed H.R. 3200. Further, the AMA website attacks distortions of the reform plan as depicted by the Lewin Group, a supposedly independent subsidiary of the huge United Health Insurance Group.

Even as negotiations proceed in Congress, the ultimate challenge to fixing what ails health care is not political, but actuarial. The basic notion behind all insurances is the spreading of risk. If everyone pays a fair premium, then those who remain healthy help pay for treatment for those not as fortunate. Since everyone will eventually have need of services, premiums in the well years becomes hedges against the chance of later illness. The more methods we create to segment the risk pool, the less efficient it will become.

Can significant savings be wrung from the current system? You bet! There are tons of low hanging fruit that can and should be pruned from our bloated, inefficient system.

Rest of Examiner article

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