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Jan
18

Bush’s focus on health care reform

Pres. Bush is said to be shifting his domestic agenda to one featuring health care reform at the top of the priority list. According to California HealthLine’s synopsis of an article in the Wall Street Journal,
“Bush likely will propose expansions of previous health care plans, rather than new federal spending, and the proposals likely will focus on market forces, tax credits, competition among providers and individual health insurance, rather than employer-sponsored coverage.”
Earlier, Bush shot down a proposal by his own Tax Reform Committee to limit the tax deductibility of health care benefits provided by employers, frustrating some GOP supporters while heartening insurers.
The news that Bush may start moving away from employer-sponsored coverage is intriguing. The administration is under increasing pressure from employers to do something about health care costs, and this change in focus appears to be the first indication of a possible (albeit long shot) shift in funding sources for working Americans.
I wouldn’t make too much of this, except it appears to be the only innovative initiative reported by the Journal.


2 thoughts on “Bush’s focus on health care reform”

  1. Either way the pressure will be on employers since employees will have no other source to pay for increasing premiums than their employers.
    So one of two things happen. Either the upward movement of healthcare costs and premiums leads to increased wages, or people stop going to the doctor (either because of copay expense or because they opt to not have insurance) until the cost of their care spirals way beyond their ability to pay.
    It may take years to get to that critical point, but we will have a less healthy country and a very severe healthcare crisis at that point with bankrupt insurance companies, healthcare organizations that won’t be getting paid, and very sick citizens who have neglected preventative healthcare.
    Why do we have to be dragged kicking and screaming into having actual discussions about methodology and desired outcomes for healthcare reform? Instead we only scratch where it itches until we discover that it is the sctatching that causes the rash to spread!

  2. The pressure is going to be applied all across the system but likely not just on employers. Cost inflation of 5-6% is not a given. It can be reduced. Doctors and health care institutions are going to need to get used to the free market in future instead of the corporatist (in the Italian 1930s sense of the word) pricing structure that exists now. Today it’s all about taking the Medicare prices of each of the CPT codes and adjusting up or down depending on whether you want to be a generous insurance company or a stingy one. The root of it all is the government determined Medicare RBVU and locality price adjustment determinations. In other words, we have a mixed pricing system that’s at root set by the government today.
    That’s not going to work in the future because people are going to start complaining, loudly, and haggling over price just like they do every other expensive good and service. Current rules that limit discounting and straightjacket doctors into irrational pricing are going to have to get broken.
    Believe it or not, other 1st world countries have even worse pricing issues which they tend to resolve by poor service and low technology adoption. They do tend to have the advantage of having better personal behavior on health so there’s less to fix. They also don’t tend to have american habits (or more accurately social phobias) on end-of-life issues so the old aren’t kept alive so long once they get ill.
    All in all, it’s a complex problem that needs reform on several fronts.

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Joe Paduda is the principal of Health Strategy Associates

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