Health Care Reform - The Case Against Obama Care

Candidate Obama promised to bring a "change you can believe in" to Washington politics and the way government has been doing business for decades. These main two selling points brought him into the White House. One year later, fair-minded liberals as well as conservatives would admit he failed in either one miserably.

Failure to succeed on a promise would give any President a bad grade; but in failing to bring change into Washington politics, and hence get his health care agenda passed in the middle of a democratically well controlled House and Senate, President Obama displayed an inexcusable performance, one that in a competitive, profit maximizing corporation would have cost him his job by now. The reason his failure is so profound has to do with his luck of understanding of the key components of the problem at hand. The luck of understanding of these fundamental components at this time of economic uncertainty, begs the need to question Mr. Obama's inexperience in governing, as well as his inability to recognize the issues at hand towards deciding on a course of action and bringing forward sensible arguments that people can believe in.

With regards to healthcare reform, the issues Americans are faced with go beyond covering the uninsured and bringing shame to insurance companies. Certainly the above have to be dealt with but the health care issue is not a poor man's prerogative. Every family, from poor to middle class is faced with exorbitant health insurance costs while at the same time incremental health benefits have not kept up with technological progress, hence have not been realized. It is not unusual for a middle class family to be paying one third of its income on health insurance only to be asked to also pay co-pays, coinsurance costs, etc. At the same time, it is clear that the existing reimbursement system has stifled technological innovation in medicine and diseases like cancer, HIV, etc., are still around after decades of expenditures in research and investment in human capital. Relative speaking, when it comes to health care the US is the most technologically advanced nation, but nationally, we have been making baby steps in terms of dealing with serious illnesses.

So what is the way out of this mess or the best way to fix "the problem" in health care? For one thing we have to accept the fact that this is a "universal" issue and not an issue just for the poor and uninsured. Not accepting this as the main problem and trying to fix the issue by pouring dollars indiscriminately -over one trillion of government debt, is not only unwise but rather irresponsible as well. One has to recognize the big cost components that contribute to this problem and deal with all of them. The big components are:

1. Medicare & Medicaid
2. Reimbursement and patient responsibility
3. Consumer cost and incentives for better utilization of health resources
4. Uninsured

Medicare reform is necessary in order to provide incentives for doctors to treat patients according to good medicine protocols. A doctor who refuses to take a Medicare patient because of poor reimbursement is in fact raising the cost for that patient when he becomes too ill and seeks care in the emergency room. A secondary effect is that doctors are getting out of the field that has not provided a satisfying career of practicing medicine for the patient. Fewer doctors means less care which in term means poorer health outcomes therefore higher costs. It is a vicious circle that can only be stopped with sensible reform. The same goes for Medicaid. Poor management and reimbursement induces massive inefficiencies and skyrocketing costs. In the end, it is the patient that suffers and who in tern adds to ever rising costs and more inefficiencies.

One way to fix Medicare is to continue the existing privatization that allows private companies to compete and the patient to bear some of the responsibility. Our research has shown that the doughnut hole may indeed be a black hole that induces patients to switch or avoid therapy altogether, which in tern produces poor outcomes and hence higher costs. However, if the model is revised the patient can still bear some of the financial responsibility and hence use the system wiser, but he is not faced with such a catastrophe to be making unwise treatment decisions.

The uninsured pool is made of two cohorts. The poor and the...not so poor who are willing, or forced to game the system. The two uninsured groups are:

1. Uninsured because of poverty, and
2. Uninsured because the proposed legislation would allow one to game the system by avoiding (high cost) insurance and only paying for it on the way to the hospital

Instead of forcing people to buy insurance (by imposing a penalty which silly enough is less than the cost of insurance), incentives should be provided to induce wise and parsimonious utilization of resources. People are not criminals and should not be treated as such by imposing severe fees/penalties to induce them to a certain behavior; in general, people act wisely and will always seek behavior that seems fair for the benefit received. Health accounts that are set aside to use in time of need should not be "use it or lose it" types; after all, who wants to set aside thousands of dollars per year, on top of insurance premiums, just to cover an emergency that may never occur? I know of many people who think this is insane and counterproductive.

The proposed legislation approved by Congress is basically dead and members of Congress, be it republicans or democrats, have been disassociating themselves from it. The truth of the matter is, these proposals were concocted behind closed doors, with brides and kickbacks and no one can trust them. For a bi-partisan proposal and a change people can believe in, the existing proposals should be thrown out and new ones should begin from scratch.

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