Tuesday, September 1, 2009

Slip Sliddin' Away

The American Public says, "We're mad as hell and simply won't take it anymore. Kick the rascals out. Give us a new and promising administration; we'll even vote for a nearly black guy."

"What do we want? A growing economy! When do we want it? Now!"

"What do we want? Victory in Iraq! When do we want it? Now!"

"What do we want? Higher employment! When do we want it? Now!"

"What do we want? Affordable health care! When do we want it? ....hummmm, well, sometime soon would probably be good but let's not rush into anything that might possibly impact us personally because, you know, we don't really like our insurance companies all that much but, then again. And, we can't actually afford the brand-named drugs that keep us from having a massive health problem, like dying, but if we don't eat on Thursdays we can squeeze the pills into the budget, so there is a work-around. Plus, we can see 'ol Doc Wilson for a physical if we don't mind waiting until after the holidays and he is, after all, one of the last family docs in our area. Yes, yes, the uninsured are in a tight bind but, as W reminded us back in the day, they can always go the emergency room. So, on reflection, and with plenty of very helpful information from the insurance industry, drug companies, the AMA and bona fide experts like Glenn Beck and Senator DeMint, it seems prudent to kick this particular can, you know, down the road, again, I think."

President Obama campaigned, in part, on the promise to fix the American health care system. In other words, to stick his ungloved hand into the beehive, bless his heart.

Obama and his budget sidekick Peter Orszag made a strategic decision to put "health care cost inflation" at the very tip of the reform spear and then aimed that spear at the for-profit health insurance industry. However, the other health care players (docs, hospitals, drug companies, durable medical equipment manufacturers, et al) know that their time is coming. So, they have circled the wagons, even though they don't much care for the guys in the insurance wagon with its big bull's-eye on the canvas.

In the meantime, big chunks of the American public have gone all wobbly on health care reform. It sounded good until the details started to emerge and then the opposition had something to spin. We Americans do love our spin cycle.

New York Times conservative columnist, David Brooks has noted: "Voters often have only a fuzzy sense of what each individual proposal actually does,....(but,) it must involve big spending, big government and a fundamental departure from the traditional American approach."

So, support is flagging. Americans are anxious about the unknown and this is perfectly reasonable. The unease is primarily a "big spending, big government, big deficit and self-interest" defensive response.

Here's Obama and Orszag's strategic mistake: they have not effectively communicated that to do nothing assures an even bigger spending government that, in the very near future, gets pulled into a nearly bottomless financial abyss by health care costs. Medicare will be leading the group over the edge, leaving its heel marks right up to and over the precipice.

I find that reviewing facts often helps to steady a wobbly thinking process. The following facts have nothing to do with what health care reform should look like. They are simply facts that focus one's thinking, sort of like a firing squad with you as the guest of honor. Final cigarette?

1. In 1993, nearly all health insurance providers in America were not-for-profit. Back then, for every $100 of premiums collected, $95 was paid out in health care reimbursements. Today, for-profit health insurers dominate the market. For every $100 of premium revenue, Wall Street pressure demands that they pay out no more than $80 in reimbursements.

2. About 47 million Americans do not have health insurance because they (1) don't want to spend the money, (2) don't have the money to spend or (3) have a pre-existing condition that precludes them from buying coverage. Still, when their health gets desperate (or even not so) they seek and get some medical care and that cost is shifted to the rest of the insured or affluent population. If you are well-insured, rich or both, you get great health care in America, but you also get the burden of paying for relatively modest health care for the rest of the country.

3. Today, an M.D. with a specialty, can routinely earn $500,000 (taxable) income, many exceeding $1 million. A family doctor can expect an average of $171,000 (taxable). It is the latter physician of which America needs more, particularly geriatricians, but isn't producing because of the income disparity.

4. Americans pay for medical procedures not outcomes. As a cause and effect result, those U.S. cities and towns with more physicians, diagnostic equipment and medical facilities have the highest per capita spending on health care but do not have better outcomes than markets that spend less per patient.

5. Thanks to market forces, Americans pay far more for patented drugs--moderated by paying less for generics--than their first-world brethren. Even so, on a per person basis, America is the prescription drug spending champeen by nearly a two to one margin and the largest share is for patented drugs. And, thanks to market forces, patented drug prices in the U.S. are escalating annually at double digit rates. (The scramble to raise prices on newer drugs is thought to be the industry's defense against any health care reform. "When the government is talking about more aggressive discounts, your start price is going to determine your end price," according to Catherine Arnold of Credit Suisse. "I don't think I have ever seen anything quite like this.")

6. One half of America's hospitals lost money in the final quarter of 2008. Through the first quarter of 2009 that dismal statistic had moderated to about 30%. The median profit margins across the entire hospital industry were just 3%, compared to an average of 17% for the drug industry.

About 100,000 Americans die each year because of preventable mistakes made in hospitals primarily due to under staffing and flawed communications, often caused by cost-cutting measures.

8. Using the American Enterprise Institute's estimate, so that my conservative readers won't jump down my throat for using Harvard's much higher and more oft-quoted estimate (I don't happen to believe it either), at least 108,200 American families declared bankruptcy due primarily to medical debt in 2008. It's likely to run a bit higher this year. By comparison, added together, the number of personal bankruptcies due to medical bills in France, Germany, Belgium, Spain, Canada, England, Iceland, Switzerland, Australia, New Zealand, yadda, yadda, are nearly non-existent.

9. Using tax levels consistent with the past half century in America, then subtracting entitlement payments as currently promised for Social Security, Medicare and Medicaid, The Heritage Foundation (another conservative think tank) estimates that sometime just before 2020, there won't be enough money in the federal treasury for anything but the entitlement programs. The Medicare portion of the problem--and it is the largest problem--is the direct result of two variables: (1) health care cost inflation and (2) 77 million Baby Boomers lurking at Medicare's door.

10. Inflation adjusted wages in America have remained stagnant since about 2000. Virtually all of the potential increase in our standard of living has been re-directed to pay for health care cost inflation.

11. Leaving the health care situation "as is" insures that there will never be another opportunity for a tax cut. In fact, just the reverse in inevitable.

Seems to me, as a nation with many pragmatists, that we ought to try and improve something, even if it's just a little bit. The chance to do something is slipping away on wobbly gurney wheels.


Observoid of the Day: Things aren't as bad as they seem, they're worse.

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