The President of The United States, the Leader of The Free World, The Hope and Change for our nation, sounds tonight like a hero to some, a potential suitor to others, and a charlatan to the rest.

President Barack Obama’s speech (video/text) was somewhat predictable.  And yet, the core principles are honorable and should be agreeable to all parties:

1. Provide more security and stability to those who have health insurance
2. Provide insurance to those who don’t
3. Slow the growth of health care costs for our families, our businesses, and our government

These words are verbatim from the President.  And I agree with them.

Unfortunately, the President began falling flat with the very next paragraph when he stated:

“…if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.”

This is a promise that Obama simply cannot keep.  Why?  The first principle of security and stability will require changes in the business model of insurance companies.  This will quickly lead to changes in premium costs and the structure of policies.  What any of us with insurance currently has will simply have to change, and to the financial disadvantage of the majority.

Frankly, I’m not worried about how my insurance will change yet.  I think there are changes needed.  Not all of the changes outlined by the President, but some are needed.  There needs to be a solution to the issue of preexisting conditions.  There needs to be more responsibility on the part of consumers to help keep costs down (co-pays are intended to accomplish this, but are not always structured effectively) without compromising appropriate treatment.  Portability would be a valuable improvement, but will require some kind of pooling among companies.

The President wants to provide affordable insurance to those who can’t afford it.  He presents a public option as what appears to be a “temporary” solution until a permanent tax-credit based solution with insurance exchanges can be implemented (in four years, supposedly).  No government take-over.  Mind you, Social Security started with similar promises (yes, you guessed it, I would favor eliminating Social Security as well).  I also want to see those who can’t afford insurance have a reasonable option.  Tax-credits sound like a good start… why can’t we do that right now?

The President wants everyone to be covered because that’s the only way to make it all work.  But even then, it only works if everyone is covered and the entire system is pooled.  That’s what “single-payer” means, right?  And we’re not going to do that, right?  If we’re going to force insurance companies to cover preexisting conditions, then raise the premiums for everyone.  Oh, wait, can’t change the current plans for those who have insurance.  Like I said earlier, that’s just a bad promise to make.

And finally, the President wants to reduce health care costs.  As do most of us.  The President says that by reforming Medicare to eliminate waste and fraud (no information on how this will be done, and we’ve all known it’s been a problem for a long time), and use the system to encourage “best practices” that would benefit everyone… he cites a couple of facilities that are running more efficiently, but provides no real substance regarding how the Government will make this happen.  It’s vapor-legislation at the moment.

He also made a move toward addressing “malpractice reform” (we refer to this commonly as “tort reform”), but only went so far as to direct his administration to test out the theory (based on plans formed by the Bush Administration… he should be commended on clearly giving Bush credit).  I’m actually hopeful, but even if he comes up with good results, pressuring Congress to address this may be difficult.  Keep in mind, malpractice insurance usually pays out damages, so the doctor is not generally hindered by these awards, but the cost is just passed on to you and me.

The one area of cost savings that he has overlooked is consumer cost visibility.  If patients could see and compare options, it would drive down artificially inflated costs (already proven in Florida with pharmaceuticals).

I believe that President Obama is sincere in his desire to see Americans get the health care they need.  And I think this is an issue that needs attention within the current Congress.  I question, however, the following statement:

“Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true.”

I’m not convinced these are true… and ironic that the same man that criticizes others for fear mongering would make statements like this that just aren’t supportable.

I think the current state of affairs, however, is bad enough that it is important for us as a country to act.  The issues of preexisting conditions have existed since the beginning of the industry, and should be addressed, but I question that it constitutes a sudden crisis that requires immediate action.

The crisis in my opinion is around costs, tied to waste, inappropriately high punitive damages (leading to higher malpractice insurance premiums and excessive test practices) and fraud.  Addressing tort laws and fraud in Medicare would likely create a huge lift in a short amount of time.  As the President stated,

“…if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.”

I’m convinced that the President’s plan, as outlined in tonight’s speech, will deepen our deficit and create a new level of waste and fraud.  The current House bill creates 53 new government bureaucracies.  I agree that both parties need to work together toward a solution, but the starting point seems dramatically flawed.

Republicans have presented a plan that seems to make sense.  Here’s an overview:

Pillar #1: Access to Coverage for All Americans
Makes the purchase of health care financially feasible for all – Extends the income tax deduction (above the line) on health care
premiums to those who purchase coverage in the non-group / individual market. And, there is an advanceable, refundable tax credit (on a sliding scale) for low-income individuals to purchase coverage in the non-group / individual market.
Covers pre-existing conditions – Grants states incentives to establish high-risk / reinsurance pools. Federal block grants for qualified pools are expanded.
Protects employer-sponsored insurance – Individuals can be automatically enrolled in an employer-sponsored plan. Small businesses are given tax incentives for adoption of auto-enrollment.
Shines sunlight on health plans – Establishes health plan and provider portals in each state, and these portals act to supply greater information, rather than acting as a purchasing mechanism.

Pillar #2: Coverage Is Truly Owned by the Patient
Grants greater choice and portability – Gives patients the power to own and control their own health care coverage by allowing for a defined contribution in employer-sponsored plans. This also gives employers more flexibility in the benefits offered.
Expands the individual market – Creates pooling mechanisms, such as association health plans and individual membership accounts.  Individuals are also allowed to shop for health insurance across state lines.
Reforms the safety net – Medicaid and SCHIP beneficiaries are given the option of a voucher to purchase private insurance. And states must cover 90% of those below 200% of the federal poverty level before they can expand eligibility levels under Medicaid and SCHIP.

Pillar #3: Improve the Health Care Delivery Structure
Institutes doctor-led quality measures – Nothing suggested by the Council for Comparative Effectiveness Research can be finalized unless done in consultation with and approved by medical specialty societies. It also establishes performance-based quality measures endorsed by the Physician Consortium for Performance Improvement (PCPI) and physician specialty organizations.
Reimburses physicians to ensure continuity of care – Rebases the Sustainable Growth Rate (SGR) and establishes two separate
conversion factors (baskets) for primary care and all other services.
Promotes healthier lifestyles – Allows for employers to offer discounts for healthy habits through wellness and prevention programs.

Pillar #4: Rein in Out-of-Control Costs
Reforms the medical liability system – Establishes administrative health care tribunals, also known as health courts, in each state, and adds affirmative defense through provider-established best practice measures. It also encourages the speedy resolution of claims and caps non-economic damages.
Pays for the plan – The cost of the plan is completely offset through decreasing defensive medicine, savings from health care
efficiencies (reduce DSH payments), ferreting out waste, fraud, and abuse, plus an annual one-percent non-defense discretionary
spending step down.

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The President, in the beginning of his speech, mentioned a perspective from the right of:

“there are those who argue that we should end the employer-based system and leave individuals to buy health insurance on their own.”

I have never heard this argument before.  Can someone point me to the source for this?  It just seems really odd, and not at all anyone in my circle has ever proposed.

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During post-speech conversations on Facebook, I made the following observation:

The government never provides competition that a business can compete with… they never have to deal with the silly requirements like maintaining actuarial integrity or adequate cash reserves. The government doesn’t mind working with a deficit, and doesn’t care that it can’t run it’s operations efficiently or prevent more than 10 times the fraud that exists in comparable private sector industries. Calling that “competition” is ludicrous.

Another writer, dead-set on a government-run option, responded with:

Well then start a revolution! If you hate it, change it. Or don’t you want to give up your Hummer and DirectTV?

I don’t like to generalize too much, but it seems that whenever one provides a cogent position to someone on the left who lacks a reasoned counterpoint, it seems that personal attacks are inevitable.  And, unfortunately, the same can come from folks on the right who lack a meaningful argument.   At any rate, I responded to the writer with:

I don’t have either, and I try to live frugally. I don’t have any reason to start a revolution, I just won’t support government entering the business world as a player. It’s not necessary, [it’s] counter-intuitive, and economically destructive.

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Shane Vander Hart provides a great roundup from folks much more eloquent than I.  I hope you’ll check it out.