QuoteThree Modest Health Care Reforms Will Obviate Bureaucratic Quagmire
By PAUL HOWARD AND DAVID GRATZER | Posted Monday, May 18, 2009 4:20 PM PT
Worried about increasing health care costs, Americans understandably want meaningful reforms that make health insurance more affordable. All the momentum currently rests with the Democrats, who are pushing a new, expensive health care entitlement modeled on Medicare or Medicaid.
But a huge new bureaucracy overseeing health care â€" which would be the result of such a plan â€" would cause more problems than it solves. Rather than step into a national health care quagmire, more modest, but important and effective reforms should be considered.
No one disagrees that our health care insurance model needs reform. For those not covered by their employer, health insurance is feverishly expensive. A family plan in New York costs more than $12,000 a year.
But an interstate comparison yields surprising results: a family policy can cost a fraction of that amount in Wisconsin (about $3,000).
Everyone's Covered
Why the extraordinary difference? Partly because in many states, regulations force people to buy coverage for certain conditions or treatments, driving up the price of basic policies.
In 46 states, for example, health insurance must cover chiropractor services; in 13 states, it must cover in vitro fertilization; in 11 states, it must cover acupuncture services. People who want to try to conquer their nicotine habit with a needle in their foot should have that right, of course â€" but should this service really be required?
Other states have gone further, demanding that no one be refused insurance â€" a policy known as "guaranteed issue" â€" and that everyone pay the same price, regardless of age or health status (known as "community rating").
Combining these ideas â€" as legislators have done in New York and Massachusetts â€" makes it easy for people to take advantage, waiting until they are ill before getting health insurance. The resulting system is expensive and dysfunctional.
Reduce Regulation
If Washington really wants to get to the root of the problem, it needs to focus on reducing the regulatory burden. There are different ways of doing this, but among the simplest would be to permit people to buy health insurance across state lines, thereby diminishing the impact of the regulations by increasing competition between jurisdictions.
Members of Congress have exempted themselves from these very regulations. What's good enough for them ought to be good enough for the rest of us.
Another major problem is the existing U.S. system of employer-based health insurance and the way our tax code favors wage-and-salary workers. Thus, an executive with a gold-plated health insurance plan will receive his benefits tax-free, but his out-of-work cousin (or his early-retiree brother) who wants a bare-bones policy will be forced to pay in after-tax dollars.
The self employed are not treated equitably by the tax code, either: They get a deduction, but not one equal to the benefit received by wage-and-salary employees.
Why not cap the health insurance tax exclusion and extend it to others who want to pay for their own insurance? And because some would opt out of their employers' plans, this incremental step would start divorcing Americans from job-based insurance â€" but gradually and on a voluntary basis.
Finally, Americans don't just need competition in health insurance to tame rising costs. They need to take their own health seriously. American health care, as it is currently structured, gives people little incentive to attend to diet, exercise and other health concerns.
Employer-based and government-provided health insurance can offset the financial consequences of bad health habits, since all the people in a corporation pay the same premium regardless of their health status.
Thus, someone who overeats and never exercises may have his diabetic medications subsidized by a health-conscious colleague working two cubicles down the hall. If, as we so often hear, obesity is a major national problem, why not offer an incentive for those who make better choices? One simple approach would be to offer Americans a small tax rebate if their doctor certifies that they have a BMI (Body Mass Index) under 30.
Moving Forward
These three modest reforms â€" permitting interstate competition among health plans, changing the tax code's treatment of health insurance and offering tax incentives for better personal health â€" would extend access to affordable private health insurance and help tame rising health care costs. They would also help instill in the system the oldest of American virtues: personal responsibility.
Sure, they may not be as flashy as promising Medicare for everyone who wants it. But these prudent proposals would at least help move the system toward a sustainable future, instead of a costly and inefficient government bureaucracy.
Howard is director for the Center for Medical Progress at the Manhattan Institute.
Gratzer, a physician, is a senior fellow at the Manhattan Institute.
http://www.ibdeditorials.com//IBDArticles.aspx?id=327541560527871
Just changing a few rules now will go a long way to solving some of the problems. Why not try these measures first?
Great article! This is actual reform as opposed to healthcare revolution... or coup de etat. Instead of plowing ahead with uni care how about looking at actual reforms?
QuoteUpfront Costs Could Overwhelm Initial Savings in Obama Health Care Plan
Economists and other experts say the $634 billion that Obama's budget sets aside for health care will pay perhaps half the cost.
WASHINGTON -- Costs are emerging as the biggest obstacle to President Barack Obama's ambitious plan to provide health insurance for everybody.
The upfront tab could reach $1.2 trillion to $1.5 trillion over 10 years, while expected savings from wringing waste and inefficiency from the health care system may take longer to show.
Details of the health legislation have not been written, but the broad outlines of the overhaul are known. Economists and other experts say the $634 billion that Obama's budget sets aside for health care will pay perhaps half the cost.
Obama is hoping the Senate comes up with a bipartisan compromise that would give him political cover for disagreeable decisions to raise more money, such as taxing some health insurance benefits. In the 2008 campaign, Obama went after his Republican presidential rival, Arizona Sen. John McCain, for proposing a large-scale version of that idea.
Concerns about costs could spill over in the coming week when the Senate Finance Committee holds a hearing on how to pay for coverage. Committee leaders hoping to have a bill before the full Senate this summer must first convince their own members that it won't break the bank.
"You go to a town meeting and people are talking about bailout fatigue," said Sen. Ron Wyden, D-Ore. "They like the president. They think he's a straight shooter. But they are concerned about the amount of money that is heading out the door, and the debts their kids are going to have to absorb."
Sen. Mike Enzi, R-Wyo., said cost control has to come ahead of getting more people covered.
"Unless we halt skyrocketing health care costs, any attempt to expand coverage will be financially unsustainable," he said.
Obama wants to build on the current system in which employers, government and individuals share responsibility for health care. He says his plan would make health insurance more affordable, particularly for small businesses and individuals. The government would subsidize coverage for low-income people and some in the middle class.
The U.S. spends about $2.5 trillion a year on health care, more than any other advanced country. Experts estimate that at least one-third of that spending goes for services that provide little or no benefit to patients. So theoretically, there's enough money in the system to cover everybody, including an estimated 50 million uninsured.
But one person's wasteful spending is someone else's bread and butter.
The office visits, tests, procedures and medications that the experts question represent a lot of money for doctors, hospitals, drug companies and other service providers. Dialing them back won't be easy. Providers will resist. Patients might complain their care is getting rationed.
The chairman of the Senate Finance Committee, Sen. Max Baucus, said "it's clear that the financing of this is not going to be easy." Baucus, D-Mont., says the basic approach to health care must become more economically efficient.
Instead of paying doctors and hospitals for the number of services they provide, as happens now, Baucus wants to tie reimbursement to the quality of care. Quality would measured by standards that doctors and hospitals have a hand in shaping.
Yet those kinds of changes take time, several years or even the better part of a decade.
The money to cover the uninsured will be needed right away, about $125 billion to $150 billion a year.
That leaves hard choices for lawmakers and Obama.
Baucus favors requiring individuals to get health insurance, which will help. But he also supports subsidies for people who can't afford coverage -- a cost to the government.
To help close the money gap, Baucus is open to some limits on the current tax-free treatment of employer-provided health insurance.
Health benefits are considered part of an employee's compensation, but are not taxed. If all health insurance were taxed like regular income, the government could raise an additional $250 billion a year.
In the campaign, Obama opposed tampering with tax-free employer-based health care, saying it would undermine the system that delivers coverage to most people. Other prominent Democrats agree. Asked if he would support taxing benefits, Rep. Charles Rangel, D-N.Y., the top tax-writer in the House, simply said: "No way!"
Baucus says doing away with the tax break altogether would cause harm, but some limitations might curb waste in the system. Obama's aides say he's still opposed, but willing to consider any serious proposals from Congress.
Obama's opposition to taxing employer-provided health insurance isn't the only campaign position he might have to jettison to pay for health care.
He once criticized his chief Democratic presidential rival, Hillary Rodham Clinton, for proposing that everyone in the U.S. be required to have medical insurance. Yet such a mandate probably will be in what Congress puts together because requiring individuals to pay would lower federal costs.
For Obama, there are no easy ways to pay for health care. Options include raising other taxes, cutting deeply into Medicare payments to providers, or phasing in the expansion of coverage for the uninsured -- beyond his four-year term.
http://www.foxnews.com/politics/2009/05/10/upfront-costs-overwhelm-initial-savings-obama-health-care-plan/
I have no doubt the Health care industry including Insurance could reform and provide quality health care to all at a profit and a reasonable price. They just won't is what they have proven. They can make just as much of not more providing less to less for more it is just good business. If we go to public health care the private health care industry will have been the driving force.
Quote from: JeffreyS on June 04, 2009, 12:03:20 PM
I have no doubt the Health care industry including Insurance could reform and provide quality health care to all at a profit and a reasonable price. They just won't is what they have proven. They can make just as much of not more providing less to less for more it is just good business. If we go to public health care the private health care industry will have been the driving force.
I'd like to see reforms tried first rather than universal care. There is plenty of room for improvement. Unfortunately, no one ever proposes them because the Health Care lobby buys off the Congress. Years of that inaction have lead us to the point that we as a nation are ready for radical changes when something less radical might solve the problems.
We never solve problems when they are a problem, we let it fester until it is a crisis.
Your so right Vic the Health Care pros seem to be forcing public health care on us. The law of unintended consequences I guess. I am for national health care mostly because I have lost faith in private.
Quotehttp://online.wsj.com/article/SB124398857510379561.html?mod=googlenews_wsj
Why the Health Care Rush?
Democrats don't think their bill can stand public inspection.Article Comments more in Opinion »Email Printer
If sharks stop swimming, they sink and drown. President Obama seems to view his health-care program the same way. "If we don't get it done this year," he said in a recent pep talk to supporters, "we're not going to get it done." Well, why? If laying "a new foundation" for 18% of the economy really is as important as the President claims it is, then surely it could withstand more than fleeting inspection.
Instead, Democrats are trying to rush the largest entitlement expansion since LBJ into law with a truncated debate and as little public scrutiny as possible. At this point all they've released are the vaguest "policy options," not concrete specifics. Yet the Senate plans to begin marking up legislation next week, maybe hold a hearing or two, then have something to the floor by the end of the month, votes by the August recess and a bill to the Oval Office by Thanksgiving. On the seventh day, they will rest. Mr. Obama had 24 Senate Democrats over for a White House chat yesterday to drive the calendar ahead.
It's not hard to see why Democrats are trying to hew to this full-speed-ahead timetable. Their health overhaul will run up a 13-figure price tag at a time when spending and deficits are already at epic levels and hook up the middle class to an intravenous drip of government health subsidies for generations to come. These are not realities that Democrats want the American people to mull over for very long.
This is especially true for the majority of Americans who are generally satisfied with their coverage and doctors but worried about cost. They might get scared off if they were allowed the chance to realize that Democrats will do almost nothing to restrain rising health spending. Based on the leaks so far, this year's legislation will hone in on traditional liberal concerns of social equity -- covering the uninsured.
This shell game found its apotheosis yesterday in "The Economic Case for Health Care Reform," from the White House Council of Economic Advisors, which argues that slowing the growth rate of U.S. health costs by 1.5 percentage points would increase real GDP by more than 2% in 2020 and nearly 8% in 2030. But it presents no plan for actually slowing the growth rate of U.S. health costs. Christina Romer's study is a political argument disguised as an economic one in favor of a "reform" that doesn't even exist yet. And in any case, if we're talking about the state of the economy decades hence, why does health care absolutely have to pass this year?
Part of the need for speed comes from the fact that "stakeholders" -- doctors, hospitals, insurers, pharmaceutical and device makers, etc. -- still seem to be experiencing Stockholm Syndrome. Democrats have so far succeeded in conjuring an illusion of political inevitability, which has kept industry groups in line lest they be shut out of the negotiations. But once the policy details of Mr. Obama's new foundation are poured -- above all for a public insurance program run by the government that will run private carriers out of the market and eventually fix medical prices -- even shell-shocked CEOs might stir up their courage to resist. Democrats are of course acutely aware of how industry opposition chewed through HillaryCare in 1994.
The reality is that Democrats are contemplating the most sweeping restructuring of the health markets since Medicare in 1965, and they don't want to let the details slow them down. Or to be more precise, they don't want to let the details let others slow them down. Better to grab what they will portray as a major domestic achievement while President Obama is at the height of his popularity and before anyone understands what it will mean in practice. The consequences and the cost can be explained later.
Quote from: vicupstate on June 04, 2009, 01:05:45 PM
Quote from: JeffreyS on June 04, 2009, 12:03:20 PM
I have no doubt the Health care industry including Insurance could reform and provide quality health care to all at a profit and a reasonable price. They just won't is what they have proven. They can make just as much of not more providing less to less for more it is just good business. If we go to public health care the private health care industry will have been the driving force.
I'd like to see reforms tried first rather than universal care. There is plenty of room for improvement. Unfortunately, no one ever proposes them because the Health Care lobby buys off the Congress. Years of that inaction have lead us to the point that we as a nation are ready for radical changes when something less radical might solve the problems.
We never solve problems when they are a problem, we let it fester until it is a crisis.
I agree here vic, there are changes that can be made to current regulations that help.
QuoteBeware of politicians bearing statistics. But what is even more galling than misleading (or outright false) statistics is to watch politicians rail about the expense of health insurance without once acknowledging their own role in jacking up the price. Health care is expensive, of course â€" though it also delivers value by improving the quality and length of life. But our jerry-built system has made buying insurance much more expensive than it should be. State mandates require insurance companies to cover a variety of specialized medical services (usually at the behest of lobbyists for the relevant service providers) including: in vitro fertilization, marriage therapy, smoking-cessation classes, hormone-replacement therapy, chiropractor visits, and so on. That makes it impossible for companies to offer cheap, no-frills, high-deductible plans for the young and healthy. As Sally Pipes notes in The Top Ten Myths of American Health Care, there were only 252 mandates in force 30 years ago. Today there are 1,901, an average of 38 per state.
http://article.nationalreview.com/?q=M2UwOWZiYjUzZjU5NjlmZjRjNDc2MDc3MGM4ZmQ5NjQ=
There are quick, easy ways to bring down the costs of healthcare.