The Facts on the Ground
- President Obama's healthcare reform desires are caught in the quagmire of Congressional haggling
- Most of the arguing remains over the extreme left's pushing of the "public option".
- Polling reveals that a sizable majority (58 - 72% depending on the which poll is consulted) do not want to participate in a "public option.

Overview
What was going to be a "gimme" for the President, has turned into a fierce debate - one to rival the Hillarycare debacle of 1993. This time around, President Obama has studied his history, but has come to some erroneous conclusions. He did learn the lesson that healthcare reform should not be a sealed off, top secret process that is only open to a select few. He has learned that the best time to promote healthcare reform is during economically uncertain times. He has also judged correctly that there is a great deal of concern over healthcare in the country at this point in time. What he has misjudged is what that concern is, and how to approach that concern. It is not healthcare "reform" that concerns the electorate, but healthcare "security". Most people are very happy with the healthcare that they receive. They don't want it messed with. They also don't want to lose it. All agree that the problem of the uninsured must be addressed, but not at the cost of scrapping the current system which the vast majority of people are satisfied with. President Obama has become more associated with bringing change to people who want none, rather than in fixing a problem that most recognize as legitimate.

President Obama, while still a candidate, aligned himself with the healthcare reformers who thought a universal single-payer system was the best possible solution to what ails the US healthcare system. He has gone through great pains to insist that he does not require this government solution, but he is not discouraging those who want it included in the final healthcare bill. Beyond that, in a spirit of inclusion with the Congress, rather than take the lead on the issue, he is allowing Congress free reign on what sort of healthcare it wants to craft. The President is proving that too little leadership is just as destructive as too much.

There are now several competing versions of the healthcare "plan" shuffling around the Capitol building - some with a public option of some form, others without. Any outside observer looking at any set of proposals can see that Democrat or Republican, the proposals are not all that different from each other. All include proposed solutions for insurance portability, pre-existing conditions, cost-containment, healthy lifestyle discounts and the like. The difference lies in how these solutions are applied. The extreme right sees no role for a corrupt and wasteful government, the extreme left sees no room for a corrupt and wasteful private sector. Both of these views are seriously flawed. First we must step away from the absolutes that neither government nor the private sector have any redeeming features. While abuses have occurred in both arenas, both are generally staffed with people who mean to do their best. The "culture of corruption" image rampant in the media, is largely a media invention. The reason that corruption makes headlines is not because it is so common, but because it is so rare. If it was common it would not be news - be it a Congressman, Senator or CEO. If we can accept the fact that most people mean well, we can then take the heat out of the argument and just study the facts. The facts will present the solutions.

According to various numbers from various sources the current number of uninsured in this country is about 30 million legal residents. Current US population stands at about 310 million. That translates out to roughly 10 % of the population not being directly insured with healthcare coverage. So, the facts hold that 90% of the population of the US is receiving healthcare through either employer-provided plans, private insurance or exisiting government programs. All reports out point to a large degree of satisfaction among insurance subscribers in employer-based and private plans. There is also a very high degree of satisfaction among seniors receiving Medicare. The chief complaint among these groups is cost, not service provided. Among other government programs (Medicaid, Veterans Administration, CHIP, state plans) the results are varied, depending on the program. Cost is not so much an issue, but quality of care often is. From this we can draw a general conclusion that the private sector provides better care, but at higher cost. Still it is at a cost that those who subscribe are willing to pay. Government on the other hand, provides less satisfactory service, for lower cost. In many ways, you get what you pay for. How do we go about addressing reform in a way that allows people to keep what they are satisfied with, at a better price point, without sacrificing services? That is the question that needs addressing.

Scrapping a system that is used by 90% of the population is ludicrous. There is no need to re-invent the wheel. Doing so is the equivalent of having your car need an oil change and buying a new car instead. It is far more practical, and considerably less expensive to fix the actual problem. Get the oil change - don't buy a new car - especially if you like the car you have. The "problems" are identified - cost, loss of insurance with loss of job, and pre-existing conditions. We will address those fixes first, and then take a stab at the remaining uninsured.

Costs - Buying insurance is putting money in a risk-pool. You put a little bit of money in, and if something bad happens, the money that you had put in goes to your treatment, along with the money that many other people have put in who nothing bad has happened to. Health insurance is no different than car insurance or homeowners insurance. You place a little money with the insurance company in the hopes that you never need to collect from them. The earliest health insurance was called "catastrophic" or "major medical". All it covered was hospitalization, surgery and the really expensive stuff. In the era leading into the creation of HMOs, many employers added on a health benefit that would cover routine visits to the doctor and routine medicines. This was not an expensive proposition until medical technology and procedures exploded in the 1980's and mushroomed every year since then. Part of the rise in healthcare costs is the result of numerous tests and procedures coming on line to treat patients earlier and with better results. These tests and procedures added a lot of expense to "routine" health care costs, driving premiums up. The proposed solution to this escalation in cost was the Health Maintenance Organization - which stressed prevention and healthy habits, cutting back on the need for expensive testing and cures for preventable conditions such as diabetes or heart disease. In theory, this was an excellent idea - in practice, it turned out to be less so. Subscribers to HMOs had to make extra effort to get past their "provider" to a specialist. Many times the rules governing policies were hard for the average person to understand. This led to the widespread impression of lower quality or rationed care. The state governments, traditionally the controlling forces in the insurance business, jumped in to address this, and along the way did a lot of harm. Every government is subject to the tug of all special interests - be they the insurance lobby or patient's interest groups. What started as an attempt to fix the problem turned into a grab bag of policies to give a plum to everyone who asked. There were mandates given for minimum stays in hospitals and coverage of conditions being treated by previously held plans to appease voters, There were raises in premium limits to allow insurers to recoup added costs.  As these plans were all crafted at the state level, 50 different sets of guidelines emerged - with 50 different sets of requirements. This provided a sizable increase of costs as healthcare providers and insurers came into compliance with the many different sets of laws. Adding to the perfect storm was the lucrative area of medical malpractice suits brought by people who felt wronged by the system. Legitimate claims of malpractice were soon drowned out by frivolous suits being awarded top dollar by juries. Pre-trial settlements soon became the economic norm, to avoid costly trials - even in the face of ridiculous suits. These payouts put pressure on the entire system - forcing up malpractice insurance premiums, which in turn forced up medical provider costs, ant then health insurance premiums. It was a perfect storm.

Costs can be addressed in ways that are already appearing in proposed federal legislation. There are two ways to accomplish this. The first is to increase the risk pool by encouraging more healthy people to by insurance. A large number of the uninsured are the so called "20 year old supermen" who fell bulletproof and have no need of most of the benefits offered by most plans. Allowing a return of the stripped down "major medical" coverage of the past will encourage these individuals to buy in and low cost for coverage they will actually use. This then leads to the issue of the 50 different legislative packages passed by the 50 state governments. The federal government has legitimate cause to issue a framework for insurance coverage in it's role to mediate differences in state requirements of national companies. This is the constitutionally accepted practice of regulating an actual interstate commerce concern. States have individual banking and environmental statutes and policies, but all must be subject to federal guidelines. The trick is to avoid making the federal guideline the same sort of grab-bag of goodies that the states have individually crafted. The third element of cost control would be the limiting of awards in malpractice cases to the cost of past and future treatments related to the procedure sued on and lost income. There should also be a cap on so-called "pain and suffering" awards. It is the job of the courts to administer justice, and justice is not served by an arbitrary award made on an emotional basis by unqualified laymen. Those who bring frivolous lawsuits should be required to cover the legal costs of the defendant. These measures would discourage all but solid malpractice complaints, thereby lowering costs to the entire healthcare sector.

Loss of insurance due to loss of job - this is also called insurance portability. This is the rallying issue for the single-payer promoters, and rightly so. Our system is so heavily slanted towards employer-provided healthcare that individual private plans are prohibitively expensive. They argue that a single-payer system is the only way to cover everyone. In theory, it looks good, but as we examined before, government is not an ideal tool for providing quality care. While there is no "profit motive" in a government program, funds will still be limited to revenues (taxes) taken in, or increases in public debt. This will increase taxes. Using the Canadian system as an example for cost purposes, the average Canadian pays a 48% tax rate to fund the government and the healthcare system. The United States is far more populous, and has more extensive government obligations than Canada, so we must assume that the average tax rate in the United States will need to be higher to maintain the added obligation. Another selling point for a "public option is that it will not force anyone to participate - which is true with the proposed law, but at odds with the laws of economics. As the current "public options" provide - employers will be fined 8% of an employees income for not providing healthcare. As the average employer provided plan runs more to the tune of 12 to 18% of employee salary, many companies will find it profitable to offload their insurance burden on the government, and accept the fine. As the pool of employer-based private insured dries up, the costs will become even more expensive as risk is spread among a smaller pool. Insurance Companies will not be able to remain profitable and either fail or drop healthcare as part of their insurance portfolio, thus forcing more people onto the public option. The better choice is to treat health insurance like all other insurance - as a budgetable item privately purchased according to need. Remove the employer from the equation. Craft legislation that offers employees the option to purchase their own health insurance at an increase in salary equal to the employer's contribution to their health plan. The individual can then shop the various plans that will be created to serve and attract this market, and make a choice based upon individual family needs and associated costs. This will have two benefits. First it removes the spectre of loss of insurance through job change. Second, it provides insurers with an incentive to deliver a variety of services at costs attractive to the buyer - an increase in market efficiency. Yes, there are those who will take the money and run, but that is the case now where people choose not to participate in employer-based insurance plans for personal or economic reasons. Most will find a welcome relief in the insurance industry becoming more consumer-friendly as a means of attracting business. Rather than a one-size fits all plan that is cost prohibitive, Insurance companies will provide a variety of plans based on what the insurance customer wants, and offer it at a price he is willing to pay. For dependents coming off of parental coverage, an automatic opt in to the parents carrier should be in place, as well as the option to shop other carriers.Business will also profit with the shedding of expenses related to insurance plan management. This is a plan that can be introduced gradually to allow time for the creation of new insurance products. On a positive note Humana, United Healthcare and Kaiser are all promoting initial plans addressing this exact concept in the event Congress moves in that direction.

Pre-existing conditions can be an area where the government can take the lead. Just as in the case of flood or earthquake insurance, a need and a market exists for this coverage, but no provider is in a position to take on a large share of this risk. A merger of this group into the Medicare system would be a costly, but one time affair during the transition to the private system outlined above. Once a person is accepted into the private system, in a health plan not subject to loss with a change in job, any condition would develop after coverage has begun - therefore it would not be pre-existing. Those currently denied coverage for pre-existing conditions and who are folded into Medicare would receive the same level of benefits as current enrollees. In the not perfect world we live in, we can keep an option open for those who fall through the cracks to be let in to the Medicare system, but those instances would be rare.

These proposals address the major concerns of the majority of Americans, but what to do about the uninsured who just cannot afford insurance due to life situations? TPP has repeatedly come out in favor of the Healthy San Francisco program as a good starting point for improvement in the Medicaid system, and for folding in those who cannot afford traditional private healthcare. The program is targeted at those who do not have healthcare coverage and do not qualify for other government sponsored programs. HSF charges a modest premium and co-pay that gives the program value to the subscriber - thus insuring that it is used in preventive as well as diagnostic treatment. Major funding is through diversion of city / county funds being already being used to treat routine medical problems through the emergency rooms at local hospitals. There is also a sizable federal grant. Since this is money that is already being spent by the government anyway, it would be useful to follow the example of fiscal responsibility shown by the SF government and look at re-allocating federal funds used in the same manner to get the most bang for tax dollars possible.

Common Sense Dictates
So many times the shouting escalates when one side, or both, refuse to listen. The answers to America's most vexing problems never lie in the absolutist doctrines of either extreme of the political spectrum. That is why the Founders sought to create a system based on compromise and middle ground. It is a system where the minority is heard as well as the majority, and all are to have a place at the table. President Obama has repeatedly stated that he didn't care where the best ideas came from, but that he wanted the best ideas. TPP suggests that these are among them, and that he should live up to his word to examine them, and to lead in bringing those best ideas to fruition. Common sense bears that out.

RLB