The Real World

Monday, June 29, 2009

Those sentiments were on a bumper sticker that graced a neighbor's Volvo. This was a few years ago when I was living in Shaker Heights. The fun fact? The car's owner was a physician.

I'm pretty sure this guy didn't sell suits for a living and only practiced medicine as a volunteer. He certainly didn't accept chickens and vegetables for his services. He didn't object to being paid, and judging from his house, paid well, for his services. His objection was to anyone else profiting from the delivery of health care.

Get in line.

Depending upon who you ask
* The doctors are overpaid
* The hospitals are palaces
* The insurance companies are crooks
* The drug companies are gauging us
Heck, the only people universally loved and appreciated are us insurance agents.

Yes, I'm kidding.

My neighbor the doctor was, however, right about one thing. This debate is not about medicine or the delivery of health care. It is about money. Who pays? Whose ox is gored? Who can make a small payment today to protect a major profit center for years? One of my goals is to move our conversation to include the actual delivery of health care.

One of our problems, as a society, is our complete aversion to personal sacrifice. Our state is having a huge problem balancing its budget. Governor Strickland is looking at adding fees and slots for income. To cut expenses he is taking a hatchet to any program that isn't backed by a strong lobby.

One of the governor's budget goals includes a change in the open enrollment health insurance program. Under the Federal Health Insurance Portability and Accountability Act (HIPAA), people who have lost their health insurance after eighteen continuous months of coverage, are guaranteed the opportunity to purchase a policy. This is particularly relevant if the individual has significant preexisting conditions. In Ohio, the options are the "Ohio Basic" and the "Ohio Standard". These are over priced awful policies.

Governor Strickland wants to have these policies, sold to some of our unhealthiest citizens, capped at 1.5 times the base rate. In other words, if we lower the premiums a touch, thousands of unhealthy uninsured individuals would be able to buy insurance. Isn't this great?

Well, it depends. The Ohio Department of Insurance's actuary determined that 52,000 additional consumers would purchase coverage through the open enrollment program. The problem is that the rates for policies in the standard individual market would increase by 5.5%.

Are you willing to pay 5 1/2% more so that someone else's insurance might be cheaper? If your family policy is $500 per month, we are talking about $330 per year. Regular readers know that the equation is always the same. If you increase money out, you gotta bring more money in. So will 52,000 more people be able to afford coverage? Of course not. The rate decrease for the unhealthy people, and the small increase for the rest of us, will be phased in over several years. G-d forbid you or I should have to make a sacrifice.

The debate isn't about the delivery of health care. It is only about money. That is the real world.

If you really want to know where the money is in health care. watch TV. Not the shows, the commercials. Scooters, lift chairs, and medications that run $8 to $10 a pill dominate prime time. I can track trends just by watching the ads on the evening news.

A new commercial has me a little nervous. It features lots and lots of smiling senior citizens. The reassuring voice over tells us that the reason they are so happy is because of the money they've saved due to Medicare Part D, the Rx benefit.

Other than actors, the only senior citizens that happy about Medicare Part D are pharmaceutical company retirees. Designed to enrich and protect the drug companies, insurance companies, and certain well-connected insurance marketers (AARP comes to mind), any benefit a senior citizen gets from Medicare Part D is strictly accidental. None of the rules favor the consumer. And yet, I've got senior citizens dancing across the screen and this announcer extolling the virtues of Part D. Of course, the commercial is paid for by the pharmaceutical companies.

Coincidentally, the drug companies recently met with President Obama and have proposed an $80 billion deal. That is $80 billion dollars over ten years. $30 billion will help to pay for brand name drugs for senior citizens who fall in to the coverage gap, the notorious "doughnut hole". The other $50 billion will be used to help offset expected costs associated with the uninsured.

Are those numbers real? We'll never really know. But the drug companies think they have a deal. They will make another small, difficult to quantify sacrifice in hopes of a huge payoff. Their goal is to have health care reform to be as profitable as Medicare Part D. The $80 billion deal is strictly voluntary and depends on the enactment of a comprehensive health reform package acceptable to the industry.

Again, here in the real world, we are actually talking about money not the delivery of health care. Well if we are going to talk about money, we should all be forced to use real numbers.


Questions or suggestions for future topics?


Monday, June 15, 2009
Tenth Hole. Weymouth Country Club. Medina, Ohio. I had hit a surprisingly good drive. It was long, majestic, and in the fairway. My second shot on this par 5 was more than adequate. And now I was standing less than 100 yards from the pin, laying 2, with a sand wedge in my hand. I knew what I wanted to do. I wanted to hit that ball high into the air and have it land, AND STOP, within six feet of the hole.

I knew what I wanted to do.
I knew, theoretically, how to do it.
There was no reason not to birdie this hole. At worst - par.

Bogey - 6.

Back on the cart on my way to the next tee, I realized how much my golf game has in common with the President's health plan proposals. He knows what he wants to do. He knows, theoretically, how to do it. But we have every indication so far that he is not going to reach his goals.

The consequences of my blown shots are the loss of a couple of bucks and another hit to my fragile ego. Missing the mark on health care is far more significant.

Before we go any further, I should, in the interest of full disclosure, reveal that I voted for President Obama last November. I volunteered and donated to his campaign. I also have no regrets.

As an Obama supporter, I receive daily emails from the ongoing campaign. And yes, health care reform is being run like a campaign. On Saturday I was asked to "Stand with the President". His three core principles are:

* Reduce costs - Rising health care costs are crushing the budgets of governments, businesses, individuals and families, and they must be brought under control.
* Guarantee choice - Every American must have the freedom to choose their plan and doctor - including the choice of a public insurance option.
* Ensure quality care for all - All Americans must have quality and affordable health care.

So vague. So general. No detail on how this gets done or how much it will cost. I sent an email asking for more information. I'm not holding my breath while I wait for a detailed reply.

Joe Biden was on Meet The Press yesterday (June 14th). When asked by David Gregory how President Obama was going to pay for health care reform, Mr. Biden quickly mentioned a few cost savings measures. His second option was, "Get rid of Medicare Advantage".

Millions of senior citizens currently enjoy the benefits and convenience of Medicare Advantage policies. As we learned two weeks ago from my interview with the Cleveland Clinic manager, private health insurance pays the most to a hospital or other medical provider. Medicare Advantage plans do not cover all of the costs but are still much better than regular Medicare. Costs are SHIFTED to the people with private insurance. If the government eliminates Medicare Advantage plans, senior citizens would be forced to choose a Medicare Supplement and hospitals would get less for their services. This pushes an even larger burden on those people with private insurance.

This is not hard to understand. There is nothing counter intuitive. Money goes in. Money goes out. Checks are sent to doctors, labs and hospitals. Where is the money coming from? If those doctors, labs and hospitals are shortchanged, who picks up the balance?

The President has been talking about a public plan to compete with the insurance companies. This sounds a lot like me competing with Tiger Woods. Here are a couple of quick questions:

1. Health insurance companies are real businesses. Their books have to balance. Premiums are determined, in part, by claims and risk. What would determine our new competitor's rates?
2. Will the government continue to under-pay the medical providers? If so, will the doctors, labs and hospitals be allowed to shift the costs to those covered by private insurance? That, alone, would seal our fate.

My golf game, with a little luck and a lot more practice, will one day achieve an acceptable level of mediocrity. Health care reform is different. There will be no Mulligans. There is very little margin for error. We are racing towards an August deadline. What's the rush? Regardless of your personal position or goal, you must have questions that have yet to be addressed.

Stand up and demand answers.