I know that this blog is supposed to be covering Asia Pacific healthcare issues but recent economic events show how small and interdependent the world really has become and America refuses to leave the headlines. Hopefully Asia will learn from the disasters unfolding in the U.S. The best thing Asia could do for the Americans is make them swallow their medicine and stop financing this profligacy. I love America. The America where individuals were not afraid to take some pain. Now we have a fragile nation where the thought of 4% plus interest rates on the 10 year inspire extreme fear. My parents paid 14% plus on their mortgage in the 70′s. I left Canada, not some third world despot nation, to enter an nation where the rule of law, property rights, freedom of the individual, and the ability to forge your own economic destiny was sacred. The first three were available in Canada, the last one questionable especially for doctors. They called it the “brain drain”. In this case the playing field was not flat. I went from paying 50% income taxes (all to pay for entitlements) , 15% VAT, working for the government (NDP days in Ontario) and being told where I could live and how much I could earn, to the liberated healthcare market of the U.S. And this was during managed care days which was despised by most U.S. physicians. To us Canadian M.D.s, we were empowered. In the past 2 years, I have seen all that blown away by U.S. government actions in response to the financial crisis. Anyway, I digress…
Let’s dissect this article in the Associated Press shall we…
By ERICA WERNER – 3 hours ago
WASHINGTON (AP) — Employers would be required to offer health care to employees or pay a penalty — and all Americans would be guaranteed health insurance — under a draft bill circulated Friday by Sen. Edward M. Kennedy’s health committee.Comment: Wow. What else can we do to DECREASE the competitiveness of domestic operating American companies? Has GM’s experience with health care/pension entitlements enlightened anyone in Washington? Two decades of labour arbitrage is about to get a boost. Adding to the already expensive cost structure of American companies will simply drive more American companies abroad looking for relief. The playing field is NOT flat. In open markets, companies go where they can maximize profitability (i.e. lower costs) especially in highly competitive markets experiencing a recession and especially with future growth opportunities looking increasing reliant on emerging markets. Force employers to pay for healthcare insurance and they simply have less to invest in capital equipment, less to keep current staff or hire new staff, less for R&D, less to innovate, and less reason to stay in the U.S.A.Government Medicine
The bill would provide subsidies to help poor people pay for care, guarantee patients the right to select any doctor they want and require everyone to purchase insurance, with exceptions for those who can’t afford to.
Insurers would be supposed to offer a basic level of care and would be required to cover all comers, without turning people away because of pre-existing conditions or other reasons. Insurance companies’ profits would be limited, and private companies would have to compete with a new public “affordable access” plan that would for the first time offer government-sponsored health care to Americans not eligible for Medicare, Medicaid or other programs.
Comment: Huh? Cover everyone? No discussion about moral hazard. Insurance companies profits would be limited? I’m sorry, which country is this? Insurance is all about risk management. Take away the ability to manage risk, diminish profits…sounds like it’s time to exit the industry…. which if we really examine the agenda here, is probably the end goal anyway. This is simply a sneaky back door way to get to government run single payer universal healthcare.
It all adds up to sweeping changes in how America’s health care system operates and aims to achieve President Barack Obama’s goal of holding down costs and extending health coverage to 50 million uninsured Americans.
Comment: No kidding! But let’s not kid ourselves. The goal is universal coverage NOT cutting costs. Unfortunately, India and China do not have universal coverage. Nor are they in an economic position to finance universal coverage from a fiscal position though China clearly is in a stronger position here. Nor are they rushing to burden their companies with additional taxes or entitlements to be paid for, realizing that economic growth usually is the best way to ensure maximum employment. Maximum employment means people can be fed and survive. In the U.S. it looks like we are shooting for maximum entitlements, employment and economic growth be damned. What a recipe for mediocrity…hmm just like GM.
It’s already been known that Kennedy’s health committee was planning to pursue most of the concepts outlined in the draft of the bill, called the “American Health Choices Act.”
Comment: More aptly named the “American Restriction of Choice Healthcare Rationing Act.”
But it’s the first actual bill language to circulate since Congress began working on Obama’s health care overhaul.
Congressional and interest groups officials cautioned that the language in the document was not final.
“It’s a draft of a draft. HELP Democrats are still actively talking amongst themselves and their Republican colleagues,” said Anthony Coley, spokesman for the Health, Education, Labor and Pensions Committee that’s chaired by Kennedy, D-Mass.
Comment: Let’s hope this draft of drafts ends up finally in the trash bin.
Kennedy’s committee is scheduled to begin voting on legislation later this month, as is the Senate Finance Committee, which has jurisdiction over tax issues. The House also will get to work soon to meet Obama’s goal of passing legislation through both chambers by August, so the president can sign a bill in fall.
The draft bill sets up a system of state-level “exchanges,” where people would go to shop for insurance plans and which would also oversee the marketplace. The federal-state Medicaid program for the poor would be greatly expanded.
Insurers would be required to pay for preventive care, and a new Medical Advisory Council would make recommendations on required health care benefits that would take effect unless Congress rejected them all at once — similar to how military base closures are handled.
Comment: THE FEDERAL RESERVE OF HEALTHCARE. Maybe Greenspan can come back and run the Medical Advisory Council. Doctors beware as you have been forewarned. You must preempt this nonsense or risk being a civil servant dedicated to rationing care.
The draft doesn’t address how this would all be paid for. That remains a major sticking point.
Comment: Of course it doesn’t. Just put it on the tab. Let’s pay later. That’s the American way. We can just print more monopoly money. Sell a few more trillions of treasuries to the Chinese. They will love to pay for America’s health. Wake up Middle Kingdom!
The bill language became public on the eve of the kickoff of a national campaign to rally support for health care legislation that’s being orchestrated by Obama’s campaign team. Thousands of community events are scheduled around the nation Saturday where tens of thousands of people are supposed to discuss health care issues with their neighbors and create a groundswell for congressional action.
Comment: Come one come all. Free healthcare. Who would turn that down? Especially if they have been laid off and foreclosed on. At 10% of the population it becomes a significant vote getter.
Yet many hurdles remain. Republicans are strongly opposed to a new public plan, especially the way Kennedy’s bill designs it. Under Kennedy’s bill the “affordable access plan” would pay providers 10 percent over Medicare rates, which would make it cheaper for patients, but harder for private insurers to compete with. Private insurers fear such a construct would drive them out of business, and there’s even division within Democratic ranks.
Comment: Ah. Price fixing. America certainly has learned to fix the price of money (interest rates) why not healthcare? Government sets Medicare rates. Antitrust be damned. Competition be damned. The American way be damned. “Affordable Access Plan” a whopping 10% higher. Oops what about the higher utilization driven by artificially held low prices and the fact now everyone is covered with no apparent reason not to seek care (sorry I keep hammering on moral hazard). Is it possible that increased utilization in a discounted fee for service environment will actually raise overall costs? Is it also possible that the increased utilization will result in resource bottlenecks?
That was underscored Friday in the House, as the liberal Congressional Progressive Caucus released a set of principles for how the public plan should operate that directly contradicted principles released Thursday by the Blue Dog Coalition of conservative Democrats.
Copyright © 2009 The Associated Press. All rights reserved.
Anyway I may sound bitter but I’m not. I live in Singapore now! I have confidence that Americans will ultimately make the right choices through vigorous debate but this kind of reform document is a scary starting point especially with a democratic controlled executive and congress with limited checks and balances. THE PRIMARY THING THAT NEEDS REFORM IN AMERICA IS PEOPLE’S EXPECTATIONS ABOUT WHAT THEY ARE ENTITLED TO.
Tej Deol, M.D.
