Healthcare Reform Issues & Concerns

As I write this, the Republicans have just brought out their replacement for the Affordable Care Act (ACA).  Listening to the arguments pro and con, there is one issue in particular that I fear is being misrepresented, and there is another issue in particular that I fear has been lost or is being ignored.

The Healthcare Issue I Fear Is Being Misrepresented

The issue that is being misrepresented, which I find particularly concerning, is the two-fold contention that:

  1. Because the government is participating in the financing of healthcare, “bureaucrats in Washington” are making healthcare choices for the insured.
  2. By taking the government out of the financing equation, healthcare choices will be return to the insured.

Here are my concerns with that contention:

  • First, I know that the government uses a system of Diagnostically Related Groups, or DRG’s, to capitate the amount they will reimburse for the defined procedures.
  • Second, I know that procedures, not already reflected in the DRG’s, but for which Healthcare providers seek government reimbursement, go through a review process managed by the Centers for Medicare and Medicaid Services, or CMS, which is part of the Department of Health and Human Services (HHS). And administers programs including: Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace.
  • Third, I know that medical professionals in our government are motivated by public service and strive to strike solutions that achieve a balance across all groups with a stake in the success of our healthcare system (e.g., patients, physicians, hospitals, insurers, etc.)
  • Fourth, as slight as it may be, I know that through a letter to my representative or senator, and ultimately through my vote, I can have some voice, some influence with the “government bureaucrats” overseeing the healthcare procedures for which they will reimburse.
  • Fifth, I know that private insurers are heavily involved in limiting and dictating the range of healthcare procedures for which they will reimburse. I assume that they, too, have a formal process for deciding which procedures they will reimburse and for how much.  Although I do not know what that process is, I suspect that it is staffed by medical professionals who are motivated by seeing the company be financially successful—a team “private industry bureaucrats”—private industry counterparts to their cousins, the “government bureaucrats.”
  • Sixth, I know that those private insurers that are for-profit organizations are motivated by profit, and optimize their decision-making for their owners. I find this to be particularly true at those that are publicly traded—never forget that at publicly traded companies their leadership’s first obligation is to the company’s shareholders.
  • Seventh, unless I am a huge shareowner, or manager of a large fund, I know that I have zero influence with the private industry bureaucrats overseeing the healthcare procedures for which their company will reimburse.

The fact is, under no scenario does the decision of what healthcare procedures will be reimbursed, and for how much, ever return to the insured; it stays with the insurer.  The question is who that insurer will be.

As for me, I am far more comfortable with the medical professionals, motivated by public service, who seek to balance the interests of all stakeholders, and with whom I have an albeit small measure of influence (i.e., the Washington bureaucrats) being the ones to decide which healthcare procedures they will reimburse and how much, than I am with the medical professionals, motivated by their company’s financial success, who seek to optimize the interests of their shareholders, and with whom I have zero influence.

The Healthcare Issue I Fear Has Been Lost or Is Being Ignored

The issue that I fear has been lost or is being ignored is the one that prevents hospitals from turning away anyone who comes to their doors requiring treatment.  If you force a hospital to take a patient who can’t pay, then the hospital has to recoup their costs another way—by building the cost of the bad debt into the rates that they charge the paying patients, I presume.

In addition, we also know from experience that people who don’t have the ability to pay will avoid all preventative treatment.  And we also know from experience that the cost of curing an ailment is multiple times more expensive than the cost of preventing an ailment.  As a result, we know that we are driving up the cost of treating the very people who can’t afford to pay, and because a hospital is obligated to treat these folks, we are driving up cost of the bad debt that gets built into the rates paid by the rest of us.

This seems like lunacy.

I am not arguing the morality of requiring hospitals to treat people regardless of their ability to pay; I think it would be immoral to turn away someone in need of medical treatment.

Rather, my point is that if we’re going to require hospitals to treat anyone and everyone who comes to their doors, then I think it right and reasonable that we also require everyone to have healthcare insurance.  Conversely, if we’re not going to require everyone to have healthcare insurance, then I think we need to remove the legal requirement that hospitals treat anyone and everyone that comes to their door regardless of their ability to pay.

I know that there are those who argue that it is unconstitutional, at the most, or un-American, at the least, for the government to obligate its citizens to own health insurance.  I disagree; at least I disagree when it comes to the common good—the quality of life and economic well-being of our society.  In fact, there is precedent for it.

In the early days of our republic, when we had a tiny standing army and relied primarily on the militia for our common defense, one of the early acts that Congress passed, and President Washington signed, was The Militia Acts of 1792 which required, among other things, that:

each and every free able-bodied white male citizen of the respective states, resident therein, who is or shall be of the age of eighteen years, and under the age of forty-five years… shall provide himself with a good musket or firelock, a sufficient bayonet and belt, two spare flints, and a knapsack, a pouch with a box therein to contain not less than twenty-four cartridges, suited to the bore of his musket or firelock, each cartridge to contain a proper quantity of powder and ball: or with a good rifle, knapsack, shot-pouch and powder-horn, twenty balls suited to the bore of his rifle, and a quarter of a pound of powder; and shall appear, so armed, accoutred and provided, when called out to exercise, or into service, except, that when called out on company days to exercise only, he may appear without a knapsack. 

My point here is that, yes, the government can require, and has required, a citizen to own something when owning that something rises to the level of being deemed essential to the common good.  Like mandatory healthcare insurance.


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