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Health-Care Reform Measures Leave Cost Control Missing

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Don’t send the stonemasons to carve President Obama’s image on Mount Rushmore until he and the Congress deliver more on healthcare cost control.

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Congress could have saved the country a lot of stomach acid by reforming health care before a sense of urgency led to mistakes, but there wasn’t sufficient interest to run the political gauntlet. Now that the Democrats have passed the plan—and the President delivered on his top domestic policy promise—the only realistic approach is to make it work and improve it.

At its heart, the reform measure consists of taxes and penalties designed to pay for and incentivize coverage of the uninsured. Unfortunate? Maybe. The end of the world? Hardly.

There’s plenty to fix. The measure, the passage of which was assured by the historic March 21 vote in the House, does relatively little to control costs or discourage needlessly expensive treatments and diagnostic care.

What worries us is the seeming lack of logic in both treatment and billing. The other day a health insurance statement arrived in the mail for a colleague. It showed that for one 15-minute exam and conversation with a urologist, who was watching out for kidney stones and prostate trouble, the charge to the health insurer before the insurer’s discount was $223.08. Earlier this year, we read about a man who fainted and was taken by ambulance to a hospital emergency room. Cause? Dehydration. Medical bills sent to the insurer? $10,000.

Health costs ate 17.6% of GDP in 2009, and some experts estimate employer health insurance costs could climb 84% by 2016.

There has to be a reckoning with physicians, labs and hospitals about capping the base-line charges for their services, but that day hasn’t arrived. Only drug costs were substantially addressed in the measure that passed. State health-care insurance exchanges, begun in Massachusetts in 2006, have the potential to control costs, too, for those buying coverage through the exchanges.

Small employers in our industry, some of them struggling to survive the recession, will face difficult choices on coverage, penalties and hiring.

Even with the demise of the troublesome Merkley amendment, small employers in our industry, some of them struggling to survive the recession, will face difficult choices about whether to provide coverage, pay the $750 penalty per uninsured employee or opt to treat workers as freelancers.

Despite the added taxes and regulatory intrusions, the saving grace of the reform legislation is in providing insurance to the uninsured millions. Before you fret over creeping socialism, put your principles on the witness stand and ask if everybody doesn’t deserve health insurance as a basic human right. We think they do. What finally tipped the process toward passage wasn’t an ugly backroom deal, although there were some, but that our political institutions responded to voters.

That’s not socialism; that’s democracy.

 

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