The Health Care Reform Bill That Does Not Reform

The House of Representatives health care reform bill that barely passed the House a little while ago has been analyzed by Richard Foster of the Centers For Medicare and Medicaid Services. His results were published in the St. Petersburg Times on November 15, 2009 as a Washington Post story. His findings and report are not pretty:

• The current House bill, that the Obama administration supports, would be funded largely by cutting future Medicare budgets by $500 billion. According to Mr. Foster, this would sharply reduce benefits for some senior citizens and reduce access to health care for MILLIONS of others. (Did someone say death panels?)
• The funding cuts are so large that some hospitals and nursing homes would likely opt out of the program because of the reduced fees they would recover from the government.
• Mr. Foster felt that Congress could intervene to reduce some or most of the reduced funding but that would undermine the whole concept of the current House bill of financing this health care reform, whose cost is estimated to be over a TRILLION dollars, via cuts to Medicare.
• Furthermore, the report questions whether the country even has enough medical resources to accommodate a reform effort that would add more than 30 million more people to the ranks of the insured, many of them through the Medicaid program. In such a scenario, increased demand for limited resources, providers of health care services are likely to increase, yes increase, their fees and only take patients with the best paying, private care insurance plans, causing severe access problems for those less affluent and fortunate. Costs would go up, the exact opposite of what is desired. Remember your basic college economics - supply and demand and price are all related.

Not a pretty picture and all because this whole Obama care effort did not do what this blog has called for from the beginning: you have to first understand the root cause(s) of rising health care costs and only then can you put together a plan to reduce or eliminate the root causes. This bill does nothing of the sort. It does not identify and address root causes, all it does is move money around from one pot of government funding to another while increasing tax burdens on the rich. There is not mechanism or process to actually reduce costs, it is only a shell game. This bill does not address the potential cost savings from tort reform, significant savings that several states have realized from tort reform in their state health care industry, it does not address fraud, it does not address relaxing the selling of insurance across state lines, and any number of other, high potential root causes.

What has happened is that the whole process has devolved into a political game of chicken with Obama and the Democrats trying to pass any kind of bill, even a bad one that bankrupts the country without reducing health care costs but enables them to claim victory, while the Republicans will do anything to prevent any kind of bill from passing, even a bad one, while health care costs continue to spiral upward, Quite pathetic behavior from both parties.

The only solution is one that this blog and the book, "Love My Country, Loathe My Government", has proposed from Day 1 under Step 28: given how bad the political class has mucked up the waters of health care reform, the only solution is to start over with the creation of a panel consisting of smart Americans, a panel well versed in all aspects of the health care industry, who can address the problem of root causes in the health care industry without lobbyists, politicians, and re-election campaign managers interfering. That is how America went to the moon, using smart Americans in NASA, how America developed the atomic bomb in World War II, using smart Americans in the Manhattan Project, etc. The only way for the government to do anything effective is to get out of the way. They should do the same thing here: better to have no health care reform bill than to have a very bad health care reform bill, which is where we are now.

And if this post depresses you, wait until tomorrow's post where we will review a recent AP report that showed how bad Medicare fraud and waste is.

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