Tuesday, April 5, 2011

GOP Health Plan

I am all for any proposal that will improve heath care in America.  Improvement means controlling costs, covering all Americans so no one has to worry about going bankrupt to pay for health care.  Improvement means access to quality care without having to worry about losing your job, which means losing your coverage.  Improvement means a system where all incentives are aligned to prevent disease, rather than using expensive technologies and hospitals to treat disease after the fact.  Any proposal that gets us there has my vote.

In the GOP "Path to Prosperity" budget for 2012, they propose a few things that are good and a few big things that are bad...really really bad.  First the good.  Capping the medical malpractice lawsuits for "pain and suffering" would be a huge step forward.  Patients should be compensated for medical errors but the "hit the lottery" windfalls for pain and suffering are costly drivers that make no sense.  There is no place in the world, besides the USA,  that has such onerous medical malpractice lawsuits.  And they drive up cost for everyone.

The plan gives no real details, but it does mention fixing the 29.5% cut in physician reimbursement from Medicare slated for next year.  If that cut goes into effect, there will be few doctors left to treat Medicare patients.  It needs a permanent fix.

Now for the horrific part of their proposal.  They want to turn Medicare into a subsidy program by giving seniors (and the disabled) vouchers that they can use to buy insurance on the open private market.  The system would save money because premium subsidies would tend to grow more slowly than projected health costs per enrollee. However, premiums charged by private insurers for current levels of Medicare benefits are likely to exceed subsidy amounts, forcing beneficiaries to either pay more out of pocket to buy equivalent coverage or settle for less.  Yes, we can certainly save the government money if we just do away with the responsibility for providing health care.  Give seniors a voucher and let them fend for themselves with Blue Cross, United Healthcare and Blue Shield.  We have all seen how well that system works for us!

Under the restructured Medicare program, anyone who turns age 65 beginning in 2022 would choose a private health plan paid for with an adjustable subsidy from the government. The subsidy would be lower for wealthier Americans and higher for sick beneficiaries whose conditions worsen. Low-income beneficiaries would receive extra assistance to cover out-of-pocket expenses. Beneficiaries enrolled in the traditional Medicare program before 2022 can stay there. (So quit your bitching, AARP)

Another aspect of the "Path to Prosperity" is the proposal that the federal government fund its share of state Medicaid programs with block grants, with states continuing to fund their share. The block grant approach would cap the federal contribution to state Medicaid programs and give states more flexibility in operating them. However, it also shifts more of the fiscal responsibility to states,  just when we have record unemployment and rising demand for services.

We all know how solvent most States are right now!!  This shifts the responsibility to states to increase taxes or  reduce benefits for Medicaid.  Can we get any meaner as a nation?

All early analysis of the GOP "Path to Prosperity" shows it will save money.  There is nothing that shows it will hold down health costs.  That doesn't surprise me.  If the government limits it's involvement and coverage of Americans,of course it will save money.   It puts the money into the hands of private insurers and we get to pay more out of our pocket.

I am all for balancing the budget and bringing spending under control.  It is great when our elected officials try to accomplish this.  May I suggest as a beginning that we trim down the 700 military bases that we have in 130 countries in the world.  Our military expenditure accounts for almost 1/2 of the entire World military.(46.5%) followed by China at 6.6%.  Maybe that is how we could achieve a "Path to Prosperity" and still provide health care to our population.


Steve Heilig said...

Toni - great analysis. beyond the health specifics, though, i think all we really need to know is that the broader proposal includes cuts to high-income personal and corporate taxes. that's the real rationale behind this...the usual "follow the money" perspective and "voodoo economics"....


Kathleen MD said...

It does sound pretty awful, but there is a precedent for this. Israel has a system of four private insurers tightly regulated by the federal government. EVERYONE in the country is covered and the government pays the companies directly for each person by a formula based on age and health conditions. It may not be perfect, but their system works better than ours - with a free market and capitalism rather than a nanny state with one big government-run system. Costs are MUCH lower than in the States, everyone has health care, there's WAY less paperwork and hassle, less malpractice, and just about everyone I've spoken to here is happy with the system - including doctors. The latter are currently "on strike" as they only make a fourth to a third of what American docs make - but that is fixable within a system that still has much lower overall costs. The pay rate is only an issue because of a law they have tying the salary of docs to all other workers. The US wouldn't have that. Happy to share a couple of links discussing this system with anyone interested.

Jonathan said...

Why can't we have any politicians exhibiting the same kind of common sense thinking that's the foundation of your proposal?

I'd like to be the first to volunteer for Brayer for Congress.

Michael Kirsch, M.D. said...

Great presentation of a complex issue. Of course, anything slated to be cut, such as military, will generate howls from those who will be affected. What you and I may consider to be 'waste' is someone's income.

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Michael said...

Very worthwhile piece of writing, thank you for this article.
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