The latest from DTC Perspectives

Health Reform Negative Synergy

Health reform has become like a hot dog, an adulterated pork filled one. So much political compromise has been made and special interests satisfied that the actual bill emerging is likely to be mystery meat. It will make little sense and satisfy none of the goals originally outlined by its supporters.

President Obama said during his campaign the average family premium would be reduced by over $1000. We hear little talk of that now. Instead we hear that future costs will be better controlled with hazy predictions that more competition will somehow emerge from some form of public option or the threat of one. I ask the supporters of the bills to explain how insurance companies can be forced to cover pre-existing conditions and still lower premiums? The original idea was to mandate coverage for all those young healthy people with significant fines if they did not get coverage. The latest Senate bill has token fines phased in over years unlikely to motivate those healthy folks to sign-up and thus offset the costs of the chronically ill. The numbers do not add up for a premium decrease or even modest increases.

Politicians are now amending the bills to put in all the local pork their power base allows. This process, apparent on C-Span, is scandalous. Heaven knows what goes on in the closed door negotiations. Obama promised a new open America filled with sunshine. It has been cloudy when it comes to health reform.

I support true reform that increases access and lowers cost or at least pegs costs to wage inflation. I have read summaries of all the bills proposed. I see nothing that will do that except by eventually rationing care. That is a dirty word in politics as no elected official will tell their constituents sacrifice is necessary. Instead they take the coward's way out and blame insurance companies. After all we all can agree that the bad guy is the big profit hungry bureaucracy. Most insurance companies just do what their employer clients tell them to cover.

The reality of this "reform" is we are increasing access by raising cost for most of us who already have insurance. That may be a good social policy but we might as well level with the public and call it what it is. It is a new entitlement that adds another cost bubble that will burst in a decade or so. Those who really want total government control will likely get what they have been after in a few years. The public will be so sick of rising costs by then they will agree to national health. Then we will get a system similar to Europe. That may not be a bad thing if we can figure out ways to take their best practices. On the other hand, if the Republicans get back in firm control we may get unfettered free market plans with interstate competition and transparent pricing. Either approach can work well but not when using half of one and half of the other for political expediency.

My concern is we are avoiding solving the problem by creating a hodgepodge program that takes the worst of both parties wish list. The wisdom of crowds may be true in most cases but not when the crowd is made up of politicians. We get that unidentified pork hot dog approach that is caused by negative synergy of bad ideas. Congress wants everyone to re-elect them so it gives us something we all can like. They are cowards because we can either do it right by having a true free market system or a true national health system. Instead we will take the worst of both sides because it can get something passed this year. One could call that standard political compromise but I call it a calamity.

Obama, I believe, is a smart guy who wants to do right. Smart guys can be wrong, however, and intelligence can lead to arrogance. He thinks we can pass a mediocre bill now and improve on that over time to make it work. The government reality is we will keep kicking this rusty can down the road until a new cost crisis emerges. One day a super majority of one party will give us either a true free market or true national single payer health. I can live with either one done right.

 Most Americans love simple answers and refuse to give the time it takes to understand complex issues. They get hot dog legislation because they allow it through ignorance and laziness in getting involved. They likely know more about Balloon Boy than the details of health care. Let's hope I am dead wrong and genius will somehow prevail from Congress and The President. If I could play Vegas odds maker, however, I would give 5-1 on failure to control costs under the "reform" plan.