Health Care Reform - A starting point might be seperating Myth from Reality

Excuse me for just a minute while I take a step back and try to separate the trees from the forest. There are a lot of numbers being thrown around - most of which are so large as to be incomprehensible to any sane being.

The need to restructure health care has taken front stage in our political drama and before we cast the cement to what will be our legacy and our method of health care delivery for the next 50 years or so, we should probably take a good look at what we assume to be the "truth".

For example - everyone can agree (I think) that affordable access to quality health care is a noble and worth while goal - in fact, an imperative for an advanced civilization. We are told about the "fact" that 45 - 51 million Americans lack health insurance coverage. But is that true?

Well - sort of. Approximately half of that number opt to have no insurance as a choice. Young generation X'ers and Y'ers who have fallen off their parents policies and fallen out of their college health protection programs (during which they are showed to be "uninsured" although they are fully protected through these typically co-op, community paid health programs) and basically choose not to purchase insurance which can typically be obtained for something south of $150/month.

So we have a realistic number of about 23 million. There are a total of 2.5 million people in state, federal or local incarceration who already receive health care at the trough of the public dollar. So that brings the number down to about 21 million.

I think everyone can also agree that one of the primary concerns, just on the basis of fairness and equity, is the impact of unemployment on the number of uninsured. A study by the Kaiser Family Foundation estimates that every 1% growth in unemployment results in an increase in the Medicaid enrollment of about 1 million and an increase in the uninsured population of about 1.1 million. So given the increase in unemployment in this depression, there are approximately 5.3 million people who have become uninsured by the loss of a job.

If we apply the math we can see that the average annual salary in the US is $44,155 (2009 dollars). The combined Medicare contribution rate is 2.9%. Therefore, the immediate cost of providing insurance (note - not the cost of health care, but the cost of providing current levels of insurance protections for these individuals and families) is $6.8 Billion. That's at a Medicare level of insurance, not Medicaid - and that investment brings down our number of something close to 15 million people chronically uninsured.

Using the CBO's rough numbers of the first take on the Kennedy Health bill - and this should not be taken as an endorsement of that particular approach - but just utilizing it as an order of magnitude comparison - applying those provisions to the real number of people who legitimately are underserved by our current system is closer to $533 billion (1/3 the cost of the projected current expense run) + $60.8 Billion (10 years at the current rate of unemployment -which is overly conservative) = $700 Billion as opposed to the $2+ Trillion currently estimated (which is sure to go higher). The other advantage of this approach is it actually provides coverage to real people and solves real problems.

There are two problems with this approach - one, it doesn't contribute to the nationalization of another part of our economy (which is becoming apparent as the real goal of this administration) and two - it doesn't deal the fundamental sustainability of the overall system.

We will deal with that in my next blog - but short term this is a much more rational approach that what our elected officials are scheming now.

Critical elements for reform - adequate reimbursement and aligned incentives, and reduction of non-patient related expenses. Government does have a role - but it's role should be in providing a marketplace of information from which consumers can make appropriate decisions. It should not be in the rationing of care. We see even fairly good approaches - for example the Medical Home model - corrupted and made evil by the governments mis-interpretation of it's highest and best, real world use.

Standby for more in my next rant!