Saturday, February 27, 2010

My take on Healthcare in America

I cover the Healthcare Industry in my job.  Every day, I'm either talking to people in healthcare, reading about the subject in newspapers or trade rags, deal with projects and offerings in the healthcare space and reading the latest e-mail or analyst report that someone has sent me about it.

In my heart, I carry the this tension of what followers of Jesus (and I'd argue people in general) are called to do to take care of the poor.  I have friends who struggle to make ends meet because of medical bills, even though they have insurance, and I hate it.  We've got Medicaid already to cover the poor.  It's a huge cost, I'm willing to use some of my income to help others, but I don't know that just throwing more money at this is the answer.  I actually think that there are ways to approach this with new taxes than could actually by neutral by helping drive down overall healthcare costs and fund the poor in some of their coverage.

I've been fascinated to watch the Healthcare debate going on in our country, and I read everything I can get my hands on.  I've started writing this blog post five or six times over the course of the past year, each time stopping as it got so big, had so few answers and so many logical gaps.  I'm writing this more to capture some of what I'm thinking, but even that's tough to distill down.  It seems pretty egotistical to claim that I've really got the answers to any of this, so I'll just claim these as random thoughts that just so happen to be right.

1. We need to move incrementally into this, not with gigantic upending reform
Democrats want a comprehensive approach that overhauls insurance practices, expands coverage, changes medicare and attacks costs.  The Democrats believe you can only change insurance rules to guarantee coverage for people with pre-existing coverage for people with pre-existing coverage if healthier citizens are in the insurance pool to spread costs.  They believe you can only get everybody in the insurance pool if the government requires all to have insurance of some kind, and you can only require everybody to have insurance if you provide subsidies to help with those.   Republicans want incremental change because they believe those things are too risk and expensive to do at once.  They want to start by allowing insurance policies to be sold across state lines, allowing small businesses to band together into pools and look at how big big policies are taxed.

2. People have to be accountable for their healthcare spending
One of the biggest problems with healthcare right now is that we're not accountable for what is spent.  Regardless of whether you're talking about government programs like Medicare or Medicaid, or my own insurance plan, it's difficult to know where your money goes.  I remember the first time I had an insurance plan with a high deductible and put the balance of the money in my Healthcare FSA.  The onus was now on me to manage my costs and make decisions about my care.  At first I was amazed at the kind of bills I received from my doctors that I didn't normally pay attention to.  I started asking my doctor what procedures cost and whether they were required.  I did research into the prescriptions I took to look at generics.  I started managing my costs because it was coming out of my pocket.

There are people, particularly in Michigan with our huge union benefits that pay no co-pays for drugs or visits, and have no ownership to manage their own healthcare costs.  They're not taxed on this money and the costs keep going up, because the doctors and hospitals charge the insurance companies huge amounts of money and the individual could care less, because they don't see a penny of it, or even a bill.  The hospitals charge a fortune and burden these plans with the costs of the individuals who can't afford to pay. 

I think the only time I've been in favor of new taxes has been around taxing people's healthcare plans, like John McCain originally proposed and Obama considered for a while . I was very disappointed in the way Obama gave in to the union lobbyists because of how this would impact them and the rich plans they have.  If I'm all of the sudden taxed on my healthcare plans, I'll be making much better choices about how that money is spent - whether I go and take the cash and manage my insurance myself or buy a more custom insurance plan. I current pay over $1,000/month out of pocket for my family's insurance costs.  Union plans exist that are worth over $30,000/year without a penny paid out of pocket.  I'm guessing those union employees would much rather manage those dollars themselves and keep the costs overall down.

3. I don't think that the public sector can do this as well as the private sector:
I've done consulting work in both the private and public sector.  I've seen governments run at levels of efficiency that are embarrassing.  I've seen $50 billion dollar companies run at 2% margin taking every penny of cost out of things that they can and being successful by delighting their members.  Are there exceptions in between the two?  Absolutely, but from what I've seen, lean, efficient government is the exception, not the norm.

4. The Insurance companies are not evil
I work with the payers out there.  They're not evil, they're not looking to screw over the little guy.  They're real people just like you and I.  They're not in it to lose money (although many of them are non-profit), they have to manage when people lie to them about their conditions, and comply with expensive government regulation.  They run extremely tight ships, and are constantly looking to improve in a way that Medicare/Medicaid are not.

Like I said, there are two sides to all of these, exceptions and lots of anecdotes that have come out about real people.  The bottom line is that this is broke, and I don't believe a giant government plan and spend will fix it.

1 comment:

bill said...

I used to work for a small non-profit in Dayton, and during my relatively short tenure there, I had the pleasure of working under a few different Executive Directors, one of whom had been a rather successful health insurance saleswoman, before heading up the Greater Dayton Area Hospital Association.

We were chatting about U.S. Healthcare one time, and she noted that the biggest problem she could see was how poorly people managed and planed their costs. She gave the the example of a newlywed couple that came to her looking for insurance. Being young and healthy, their rates were pretty low - but they wanted to have kids, so they insisted on having full coverage on all the medical stuff that comes with having a kid. As a result, their rates went up several hundred dollars a month.

At this point, they complained about how much it cost, like many people do. What my boss pointed out, to them and me, is that if they had thought about it and planned, they could have dumped half of the rate increase their insurance demands cost them into a high-yield savings account, waited a year or two, and easily have had enough to cover the costs, and then some.

But they didn't.