Monthly Archives: July 2009

Is Heathcare Reform about insuring the uninsured?

How may people are uninsured? 

The answer is it depends who you ask.  It appears that the answer is NO.   National Institute for Healthcare Mangement (April 2008) Brief:  says there are now 47 million, or 15.8% of the population uninsured.  Is that what it really says?  Read more..  Page 1 of the brief has some interesting census data on the uninsured that you should keep in mind.  

Let’s narrow down the 47 million number.   5.6 million illegal immigrants.  12.0 million people eligible for Medicaid or State Assistance but not enrolled.   Now we are down to 31 million:    Let’s break it down more”.  7.3 million are those that make in excess of 400% of the federal poverty level (FPL).   For a family of four that means they earn at least $85,000 per year  I am going to go out on a limb and say that there are no political action groups looking out for the higher income (yes, $85,000 AGI is higher income) groups. 

Now we are down to 20.5 million unisureds.   Broken down as: 1)4.5 million at 300-399% of FPL; 2)8.3 million at 200-299% of FPL  and ; 3)14.4 million at 101-200% of FPL.  

So Healthcare reform is really about educating 12 million on what already exists and providing varying levels of assistance to 27 million more,of which ,Maybe, 8 million people will really get benefits.from major healthcare reform without tax increases paying for their coverage.     

On July 17th, 2009,  Howard Dean said on CNBC that the core issue is not about providing insurance to the uninsured, its ” about the Private Sectors failure to control costs” .    

He claims that Medicare is more effective than the private sector in controlling costs.  Is he right?  
  Sort of.   Medicare mandates that doctors accept what they pay.    I am not going to tell you that Medicare pays providers less than actual cost, but the doctor groups will.  (refer to the search term “Medicare reimbusement cuts 2010”)  

If the issue is truly that  “THE PRIVATE SECTORS FAILURE TO CONTROL COSTS”,  you should know what any of these bills true purpose will be.   

Why is this happening now, so quickly? Is there a secret?

Is President Obama following through on his pledge or is something else really happening? 

The Answer is probably both.   Most of us agree that “productive”  healthcare reform is needed.  Most of us recognize that President Obama campaigned for Health Reform and is following through.    Has anybody wondered why this is being ramrodded through the houses of Government to get done so fast?   I have.    I don’t presume that this is the answer, but I contend that the answers lie within GOOGLE, Yahoo, and MSN (bing!)

I encourage you to do variations of the following search on your favorite engine “ medicare reimbursement cut 2010

Under President Bush’s first term, significant legislation was passed with Medicare to control cost increases by assigning cost triggers that automatically reduce the reimbursement amounts paid to providers based on Medicare’s growth rate in excess of normal inflation.    Since variations year to year would exist with delayed or skewed data, there are provisions that allow the reimbursement cut to be mitigated or delayed.    Under the legislation, these delays phase out in greater magnitude from 2010 to 2015.   Ah, politics at it’s best.   The current administration takes credit for cost controls and get the next administration to pay for it.   

So this is George Bush’s fault?   Oooh…that makes it fun, right?   Nope,   On July 15, 2008, Congress overrode President Bush’s veto (H.R. 6331) that would have cut provider payments by 10.6% with stable payments for 12 months, and a 1.1% increase for 2009.   Dern it, can’t blame bush here.   Sorry. 

So what about 2010?   Will there be a 30% cut in Medicare payments as called for by law?   Not if we tear up the rules and start from scratch.   What happens if the cut if enacted?  Refer to the search term and see what each physician group says.  

Could it be this simple?

There are currently three bills in the Senate and House that are being considered as the basis of the major reform.   Only the house bill has the support of any major business or medical group.   The AMA supports only the House bill H.R. 3200.  

With each of these bills being over 1000 pages, I find it hard to believe that any group could fully examine or endorse the impact of the law of unintended consequences.  

Let me open the series by proposing the simple basis of what I, and my firm believe, are two covenants that would provide the backbone of a solid proposal.   

1.
All practitioners are allowed to charge whatever they want for their services, but they must charge everyone, regardless of socio-economics, the same amount.  

2.  The United States sets up a buying group that negotiates on behalf of all end users, the price of all FDA approved medications.   Drug pricing to U.S. Customers should be based on what other countries pay for their social systems.   Manufacturers may opt to exempt their drug from that cost control but would lose years on their patent protection.  

If any of this sounds like no big deal, you are mistaken, and that’s why healthcare reform is so troublesome.   Even the easy stuff makes no sense. 

Examples: 

#1 – Currently providers charge significantly different amounts for the exact same procedure or service based on who you are.   You can prove it to yourself by looking at benefit statements from your current insurance, or
click here to see a comparison of “list” and “discounted” pricing for a knee replacement in the Chicago area.   

What you wont see here is Medicare and Medicaid reimbursements which are 1/3 to 1/2 of the “discounted” charge.    Let me summarize: If you have knee replacement surgery in the Chicago area, your hospital LIST price ranges from $39,900 to $58,000.  If you pay cash, you pay list price.  Depending on your insurance carrier, your net price is $14,800 to $26,200, (you have no idea of the net price upfront or how much your insurance carrier gets discounted), if you had Medicare or Medicaid, your price would be in the neighborhood of $7-10k, paid for by the government.     

National average list price is $41,000,  National Average discounted price is $13,000.     Got it?   No?   You aren’t alone.    When you get healthcare, you fly blind in relation to cost.   If we had open and level pricing, you could decide to go to the Wisconsin Dells,  put up your family at a Water-Park Hotel Suite for the weekend, paid for their fun,  gotten the procedure for $5000 to $10,000 less than in Chicago at a hospital up there, had a private nurse, and had money left over.  

#2 –  Why Have the Government involved?   Can’t Blue Cross or Aetna, etc… do that now?   No they can’t.  Suppose you are Blue Cross.   First, keep in mind that you charge your customers a margin on top of your costs.   If things cost $1000, you charge $1200 and make $200 for overhead and profit.   If things cost $2000, you charge $2400 and make $400 for overhead and profit.   The incentive is not inherent for insurance companies to effectively negotiate pricing.   If Blue Cross said to Merck, “we will only pay for Zocor what you charge the UK or Canada”, Merck is likely to say to that carrier “well, you aren’t getting Zocor”.   

As we all know, we don’t accept someone else rationing our healthcare, so effectively, insurers are little or no incentive to mitigate cost increases.  

Healthcare Reform Opening

Health Insurance Reform:  (Ground Rules and Goals) 


Major Healthcare reform is necessary.   I will spend the next few weeks providing short to medium length editorial articles explaining why I believe that major reform, some painful, is necessary.    I will cite specific and sometimes personal examples of what is wrong with the current system.   While I have a bias, and make my living off the existing system,  I will do my best to try and ignore my personal interests.   


 


If anyone finds in fact checks, an inaccuracy, you are encouraged to write a comment.  I will check it out, and if you are right,  I will post your criticism and my answer. 


 



  • Is major Healthcare reform necessary?   Unequivocally Yes.   
  • What should healthcare reform accomplish?  Any bill should address all these issues.

    • Mandatory coverage for every US Citizen. No Exceptions.
    • Mandatory acceptance for all applicants.
    • Reduce the costs for healthcare.
    • Incent and make routine care for all American’s. 
    • Tort reform to reduce C.Y.A. mentality of practitioners.
    • Keep a level playing field for all businesses both locally and nationally and internationally in relation to healthcare cost mandates.
    • Provide Subsidies for lower income individuals.
    • Freedom of individuals to choose the provider and level of coverage that they are most comfortable with. 
    • Elimination of the World Subsidy for their healthcare.  
    • A doctor’s decision on what type of healthcare you need.
    • Do not assume that a political board overseeing the program will be immune from the influence of special interest groups.  Assume they will.      

While I 100% support President Obama’s desire for MAJOR reform, I do not believe that it should be done hastily. 


 


 


 


 

Series of reviews and critiques on Healthcare Reform Legislation

On July 15th, 2009: Three Health Insurance Reform bills reached the House and Senate floors:

Each of these bills is over 1000 pages long.  As John Stewart said on his 7/15/09 show, ‘ A lot of these…ahhhh.. Congress people…. aren’t really readers’.   

Please also note that most of these people have never run a business, big or small, and have no idea about real-life Health Insurance issues.    While I love the guy, I include President O’bama as not having a broad understanding of the issues.   He may be the best informed President on the issue since Richard Nixon, yes Nixon, but I fear that the Middle Class will be really screwed in this equation.  

Over the next few weeks I will be actively updating this blog with overviews, similes, and maybe even some videos.   Yes, I have a bias, I am hopeful that my breadth of knowledge on the subject will dominate.  

I encourage you and your friends  to please subscribe to my blog.  You may be surprised how this is going to affect you and I would like you have a non-Democrat, non-Republican view of some issues.  

Change of Continuation law in Illinois- Effective Immediately

Illinois makes modification to Mini-COBRA.

Who says that Illinois legislators don’t do anything?   Effecitve in June the Illinois legislature enacted two modification to the health insurance regulations that have impact to you if you lose your job or quit.  

Change # 1 –   Prior to June 2009, if you left employment or had a reduction in working hours, you may have been eligible to elect Mini-Cobra.   If you elected the coverage, you could keep your coverage for a period of up to 9 months.   Under the new law, you may continue your coverage for up to 12 months.  

Change #2 –  This change is a temporary change that is effective immediately, but ends December 31, 2009.   Previously, if you lost your job or your hours were reduced causing you to be eligible for Mini-COBRA, there was the additional requirement that you must have been insured on the plan for 90 days.   Under the law change, you only need to be insured for 1 day, similar to COBRA rules.   I expect this temporary law change to be extended.   

Keep in mind you may also be eligible for ARRA, a 65% subsidy to your health insurance premiums provided by the federal goverment for those who were terminated from their job and their spouse was not eligible for group health insurance from their employer.