The Cost of Delay

One option available in the health reform debate, one that those who argue "keep your hands off my healthcare" seem to support, is to do nothing about healthcare.  After all, "we have the greatest healthcare system in the world!"  In 2005 we had the second most expensive healthcare system in the world (after the Marshall Islands when measured as a percentage of Gross Domestic Product consumed by healthcare), but only the 37th best healthcare system according to the World Health Organization.  That puts us just behind Costa Rica, and just ahead of Slovenia.  We die sooner and live less healthy and productive lives than citizens of many countries around the world.

Want to spend $500 billion less on healthcare than we do today?  Roll the clock back to 1993 and pass President Clinton's healthcare proposal.  Want to save $1 trillion on healthcare this year?  Set your time machine to 1974, and pass President Nixon's healthcare reform proposal.  The graphs at the end of this post illustrate what happened because we did nothing.  Denial and delay has cost us trillions!

In the "What Might Have Been" graph below, note the blue line (the median national healthcare expenses as a percentage of Gross Domestic Product (GDP) of 30 industrialized countries, and the red one showing the U. S.'s share of healthcare expenditures as a percentage of GDP.  The difference between the two lines illustrates a key reason U. S.  employers' are losing competitive advantage with businesses in other industrialized countries.  Is it any wonder that we manufacture less, than we used to?  Our healthcare costs make our entire country uncompetitive.  

U. S. healthcare spending is soaring far higher than a number of other nations, making our employers, who finance much of this spending, less competitive.  This link provides graphs which show the U. S. breaking away both in percentage of GDP devoted to healthcare, and also health care expenditures per capita, two categories in which I'd prefer we didn't lead.

The bottom graph shows the growing burden of health costs on family budgets.  In 1999, we spent 11% of family income for health premiums.  By 2007 it had increased almost 64 percent to consume 18 percent of family income.  By 2020, it is projected health premiums will consume 24 percent of family income.  

The cost of doing nothing is very expensive.  It is the one option we simply can't afford.

(Click to enlarge graphs)

Step by Step

Republicans want to take health reform step, by step.  See where that will get us in Joe Heller's cartoon below.

Prescription Pricing

In one more sign that health reform legislation is not a government takeover of healthcare, the legislation which has passed the House and Senate, or which is proposed by President Obama, does not allow re-importation of drugs from other countries which negotiate drug prices with pharmaceutical manufacturers.  Neither does it allow price negotiation with pharmaceutical manufacturers. A senior White House adviser, David Axelrod, was quoted as saying the White House would push for legislation to allow re-importation of pharmaceuticals in separate legislation, after the health reform bill is passed.

Take this bill and reconcile it!

Republicans are not interested in supporting health reform.  The healthcare summit indicated they want to start over.  On issue after issue, it was pointed out that ideas that had been championed by Republicans were included in the bills which have passed the House or Senate, but still Republicans wouldn't vote for ideas they profess to support.  

I am reminded of the proposed Gregg-Conrad deficit reduction commission in the Senate, which was endorsed by President Obama, shortly before the bill was voted upon.  The bill was sponsored by Senators of both parties.  Sponsors included Republican Sensators, Sam Brownback (Kan.), Mike Crapo (Idaho), John Ensign (Nev.), Kay Bailey Hutchison (Texas), James Inhofe (Okla.) Lisa Murkowski (Alaska) and John McCain (Ariz.), none of  whom voted for the bill they co-sponsored.  (Lisa Murkowski was away from the Senate for a family matter, and didn't vote.)  That's just nuts! 

Start Over?

The Republican mantra at today's healthcare summit seemed to be, "we need to start over."  After 12 months of discussion on the national stage, after hearings before five Congressional committees, after thousands of letters, emails and editorials, why would anyone think it was a good idea to start over?  If Republicans are serious about helping to solve this problem, it will be relatively easy to amend current bills.  Amendments will be necessary to reconcile differences between the House and Senate versions of health reform legislation, so incorporating some changes to win Republican votes would be easy if Republican votes were really there.  In reality, they are not there.

The urgency for starting over is nothing but an attempt to avoid doing anything on health reform.  It is a vote for the status quo, and that is clearly unacceptable.  In seven to 10 years, healthcare costs will double again, we'll be spending $25,000 or more for a family policy, businesses will be driven out of business if they provide insurance or the uninsured population will surge if businesses drop health coverage, all businesses that offer health coverage will be increasingly uncompetitive with competitors in other countries where government provides this vital service, and costs are far less than they are in the U. S.

HSA's Are Not A Solution

At today's healthcare summit, Health Savings Account (HSA) insurance plans were discussed.  HSA's are, in my view, extremely problematic.  They are highly attractive, because with enormous deductibles, insurance seems inexpensive.  But there are many hidden costs.  I've described the problems as I see them in the material following the jump.

A Government Take-Over of Healthcare?

The President has released his proposed health reform plan. Republicans like John Boehner, R-OH, are already denouncing it as "the same massive government takeover of healthcare." Frank Luntz, a pollster and "word doctor" for conservatives, knows those words will poll well. After all, who wants a government takeover of anything? But is it true, even remotely? No!


If we truly had a government takeover, companies like Aetna and Beema would be out of business, and insurance would be provided by government. If we truly had a government takeover, Aetna wouldn't be able to delay or avoid paying for covered services, like Aetna is doing here. If we truly had a government takeover, companies like Beema would not be able to sell worthless "insurance" policies to unsuspecting and vulnerable families as Beema did here. Because the plans which passed Congress, and the plan proposed by President Obama are not a government takeover, Aetna and Beema will still be in business. Aetna will still be able to delay or deny payment based on arguments about medical necessity.  Beema will still be able to sell limited benefit health policies, although because government will impose some discipline, these sham policies will not be able to be sold on the insurance exchanges that will create a more competitive marketplace for individuals and small businesses to find coverage.

Side-by-side Comparison

The Kaiser Family Foundation has prepared an excellent side-by-side comparison of major health reform proposals, including President Obama's plan, released yesterday.  You will find several comparisons prepared by Kaiser Family Foundation here.

Maybe We Can All Just Get Along

The Kaiser Family Foundation Health Tracking Poll for February shows the country divided equally with 43% in favor and 43% opposed to health reform.  But large majorities of Democrats, Independents and Republicans support key elements included in health reform legislation, arguing strongly that passing health reform will ultimately win broad support from Americans.  Fortunately, these areas represent the core elements of any of the health reform proposals being considered.  Here's a table summarizing areas where large majorities agree:

Private Health Insurance Vs. Government Run Health Insurance

My family has been in the unique position of being able to simultaneously compare private health insurance with government run health insurance for more than five years.  When we applied for our individual Blue Cross Blue Shield of Nebraska policy our family's saga began.  Blue Cross denied coverage for my wife because a blood test in her medical record produced a slightly abnormal reading.  My wife has an incidental condition which occurs in about 14% of the female population.  The condition does not affect her health status, her life expectancy, nor does it require any medical treatment.  As a result, my wife is enrolled in the Comprehensive Health Insurance Plan operated by the State of Nebraska and administered by Blue Cross Blue Shield of Nebraska.

Should Health Insurance Be Sold for Profit?

Most Americans benefit from not-for-profit health insurance. Medicare and Medicaid or other government-run health plans currently cover more than one in four Americans. Eligibility is based upon attained age or need, not health status. Pre-existing conditions are never excluded, policies are never rescinded, premiums aren't adjusted based on age, no shareholder benefits from the sickness or accident of those covered, and no sales commissions are paid. 

Public Healthcare vs. Private Healthcare: You Decide

Medicare was created 44 years ago to provide health insurance for Americans 65 and older. No American senior has been denied enrollment in Medicare or been denied coverage because of pre-existing conditions. No senior has had a Medicare policy terminated or been hit with premium increases designed to force him to forfeit his coverage. No senior has been denied his choice of physician or hospital. Between 1970 and 2009, the 65 and older population increased 100 percent, or 20 million, yet these additional seniors added nothing to the nation’s uninsured population.  Note the spike in those reporting they are covered by health insurance in the following graph at age 65, the age in which Medicare enrollment is available, and note this high rate of coverage continues into old age when health risks and their associated costs are enormous.  Government has provided better coverage for the most difficult to cover population, than is provided by private insurance to any other age group.   Government has served well those who have the greatest per capita share of serious health problems. 

The Public Option is Dead, Long Live the Public Option

Jonathan Cohn at The New Republic wonders how many lives the Public Option has in the health reform debate.  Hopefully, at least one more.

Will health insurance reform without a public option be a good deal? With the elimination of requirements to prove insurability, the exclusion of coverage for pre-existing conditions, and elimination of annual and lifetime limits on health coverage, consumers would seem to win. But if that comes at the cost of a mandate to buy health coverage, if the carriers that sell coverage continue to enjoy the McCarran-Ferguson exemption from federal antitrust laws, and if fewer carriers compete in the marketplace, I’m betting health insurance costs will soar without a cost-competitive public option. Between 1987 and 1999, the number of health insurance carriers in the U. S. dropped 34.7 percent according to the National Association of Insurance Commissioners. I predict this trend will only continue as more health insurers exit the business as the regulatory climate changes, making it difficult for the small group and individual health insurers to earn big profits by denying coverage, rescinding policies, and enforcing pre-existing condition limitations. Without a strong public option, consumers will likely have fewer choices and even higher costs.