Kiss Your Health Insurance Good-Bye!

This week’s poll results examine how respondents view the federal government’s proposal to reform the US healthcare system. The poll was not scientific and was driven by radio listeners of the syndicated Don Creech Radio Show and subscribers to its “Week in Review” email. Listen or subscribe at http://www.DonCreech.com.

 

Eighty percent of respondents do not believe that the government’s proposal will increase competition. There are about 1,700 health insurance carriers in the US. Adding a government option only increases providers by one. The main difference is that the new player does not have to make a profit to stay in the game. That is not a level playing field.

 

The bigger problem has been the systematic elimination of competition by government regulation at the state level where insurance companies are regulated. Slowly and incrementally over the past two decades, state commissioners have mandated increasingly standardized coverage and rates. Unlike auto carriers that can still underwrite risk and select the coverage they will provide, health carriers have faced mandated coverage without the ability to underwrite risk exposure. They have had to adapt to guaranteed issue and minimal or no waiting periods. The rational decision for a board of directors is to withdraw from those states and no longer offer coverage. Marketplace competition and individual choice has been effectively eliminated by government interference.

 

The reform proposal currently in the House of Representatives mandates no insurance company will be allowed to sell any individual or group policy after the government’s plan becomes law. The intent is not to reform the insurance industry but to eliminate it.

 

More than 73% of respondents believe that a public healthcare option will increase the deficit. Apparently, we have a lot of skepticism when our politicians tell us that any program will be “deficit neutral.” No doubt that comes from simple observation of prior political claims. Social Security, Medicare and Medicaid have not been able to operate anywhere close to the original forecasts of costs. Yet, the current healthcare reform proposal is a bigger commitment up front than either of those “safety nets.”

 

If the costs are going to be covered by “operational savings,” why are we seeing those operational changes being implemented in the current federal programs, Medicare, Medicaid and the Veteran’s Healthcare system? Is it because there is too much bureaucracy to get it done? Because there aren’t any significant changes to control costs?

 

It can’t be the addition of preventive care. We do not have sufficient general practitioners to accomplish that today. Further, we do not have a compensation system that rewards physicians for spending time with a patient for in depth history or counseling. Major compensation goes to major procedures using lots of staff and expensive replacement parts.

 

Respondents were more evenly divided with sixty percent believing that their treatment options would be limited. Limitations on treatment have certainly been the outcome in Great Britain and in Canada. Canada’s limitations have been responsible for a booming medical industry along our northern border in most every major city. There are three desired components to world class medical care. We want low cost, quality care and easy access. In the real world, you can have any two but not all three. Low cost will impact either quality or access. Quality and access come with higher cost. It is an unavoidable law of economics. The federal government cannot accomplish what is promising to do with reform.

 

The divide between respondents narrows even more with only fifty three percent believing their access will become more limited. As I previously explained, lower cost, an objective of the proposed plan, will impact either quality or access. In Canada, it has had a major impact limiting access at all stages of medical care. There are long waits to meet with your GP. There are long waits to see the specialist or lab your GP refers you to. Then there are long waits for the test result meeting and again for treatment to begin. To a lesser extent this happens in the US with Medicaid patients but not to the lengths experienced north of our international border.

 

No one has defined the types of jobs that are expected to be created by federal healthcare reform. However, sixty percent of respondents do not believe that reform is a job creation bill. There will be new jobs in the field as the Boomers continue aging and have increasing demands for healthcare. The need for nurses, aides and home healthcare attendants will inevitably increase. That increase is due to demographic changes in our population and not due to any systemic reform.