Healthcare

On Sunday, the House passed a bill to overhaul the US healthcare system. It will go through some modifications in the Senate and Obama will sign it into law. Then, the devil really will be in the details, and while no one is  quite sure what the ultimate impact will be, there are a few big picture items that have been mentioned.

For starters, the bill aims to increase coverage for roughly 30-35 million Americans, still shy of universal coverage, but it certainly sounds like its a move towards it. The people who are currently not insured, but can afford it, will be forced to buy insurance (good for insurance companies?) or be penalized (taxed). All the parties seem happy:

  • The Democrats can say they passed a watershed healthcare bill, as promised.
  • The drug companies will have that many more people buying drugs.
  • The unions were able to obtain an exemption for being taxed on their Cadillac plans.
  • Medicare costs are supposedly going to be cut.
  • More people will be covered, many of them young and healthy, making the insured pool larger and healthier.

So who loses?

  • Doctors will see payments cut, discussions now are around the 20% marker. The thinking was that cut reimbursements by 20% and doctors will just have to deal with 20% less. However, anyone who has actually run any PNL statement or business knows that this is not how things work. By cutting reimbursement rates for offices by 20%, the bill will kill any profit margin the offices had. (This is obvious since leases won’t go down 20%, staff won’t take a 20% pay cut [think nurses, billers, etc.], etc.) I have already spoken to a number of doctors/practice owners and if this reduction does indeed go into effect, they will be forced to shut down their offices. Clearly, it is a pro large institution move. Hospitals and large doctor practices will be net beneficiaries, but the vast majority of doctors will lose. Not really sure what will happen to them.
  • Taxpayers will have to bail out the system because politicians do not know how to budget. Medicare was never supposed to be the largest government expenditure. Social Security was never supposed to go bankrupt. All government estimates – I would venture, in the history of mankind – are wrong. So why do people believe these?
  • Insurance companies will ultimately be hurt. This bill moves the US one [huge] step closer to a single payer system – and that single payer isn’t a for-profit insurance company. Government options will be more attractive to employers (less liability) and young families (will end up being cheaper).

Let’s stop there for now. For a full description of the bill, click here. Another step in the absolutely wrong direction.

Last 5 posts by Yaron Sadan

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categories Politics | | datetime March 22, 2010 8:38 am

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