Health reform is all downside for most Americans

In his campaign to persuade Americans to go along with, if not support, a government takeover of the 18% of the economy that is the health care sector, President Obama keeps making a claim that is intended to soothe fears among the general public.  But his assurances may lead to a rapid disintegration of support for Democrat "reform" proposals.

While he continues to woo skeptical physicians, as he did at the AMA convention in Chicago yesterday, and urges hospitals, insurers, device and drug makers to get on board the reform train, it appears the hardest sell is going to be the general public.  But by forcing the action over the next few weeks, the president may be able to achieve his aims before Americans can see past the media cheerleading and rosy, but patently false promises.

As statistical context, numerous polls, including those by Democrat Stanley Greenberg, show that three-quarters of Americans are satisfied with their health insurance.  Most polling shows broad but lukewarm support for the notion of reform but opinions diverge greatly over what it should look like.  Just over 15% of the population, or about 46 million people, is without health insurance at any given time, and polls show Americans, being the sort of people they are, would like to see everyone have sufficient access to care, and want to see the costs of care controlled to minimize the impact on our pocketbook.

The President's general plan is to get as many of those 46 million covered, by expanding eligibility for government insurance for the poor or elderly, by forcing employers to offer health insurance or pay a tax to fund public insurance for workers, and by requiring healthy middle class individuals to purchase insurance if they don't fall into the first two categories.  And he is going make the whole thing affordable by making care more efficient.  How those efficiencies supposedly work is a topic for another day.

But what about this vast majority of Americans who have insurance with which they are generally pleased?  As with any business interaction, from restaurants to car dealerships, everyone has instances of displeasure with service and products.  Everyone seems to have a story of how some claim got screwed up or how some test was not covered, but, overall, people are pleased with coverage and care.

Over and over, President Obama has sworn up and down that if you are happy with your current insurance you can keep it and your life will go on unchanged.   You needn't worry because the government will take care of all those other people and you can maintain your generous coverage that allows you ample access to all manner of care.

This is an entirely unsatisfactory argument for supporting the administration's plans, and it is most likely entirely untrue.

Most Americans get to keep what they already work hard for while upwards of $2 trillion in tax dollars are going to be spent over the next ten years on "reform?"  The biggest expansion of federal spending ever and at the end of the day, and then most people have absolutely nothing to show for it?  The administration's reforms are systemic, they will benefit the overall delivery of care for the aggregate population and create efficiencies that will have universal impacts but make virtually no difference in the care or costs for an already-insured American. 

So, in exchange for vast new spending, an exponential increase in government involvement in health care decisions, additional taxes that will slow recovery, new burdens on small businesses that create jobs, and a stifling of innovations, most American families get bupkis.  They get the status quo.  They don't get punished.  What a deal!

But the status quo is the best case scenario for America's privately insured families.  As skeptics have repeatedly pointed out, the Obama "reform" proposals are likely to have numerous indirect impacts on the insured that may result in enormous changes in their current coverage and could diminish access to and quality of their care.

The primary way the government has contained its payments for health care for those covered by public insurance has been to simply reduce reimbursements to providers.  This means costs are made up by charging more to those with private insurance or paying out of their pocket.  When the government puts more people in public plans, more costs will be shifted to private insurance patients and premiums will rise, coming out of either workers' pockets or employers' pockets.

The administration has already been quite frank that it is going to try to limit the use of new technology to lower costs.  Under the guise of "cost effectiveness" policies, the government will issue rules on when expensive new health care treatments can be used.  If your situation does not meet bureaucratic guidelines, then the newest test or treatment will not be available to you or your loved ones.  Not only will this restrict your access to care, it will also slow the development of new technologies, which need potentially broad new markets to be economically viable.  The new technology that gets shelved could be the one that would save your life.

Many Democrats are demanding a "public option" as part of the brave new world of health care.  Essentially creating a government health insurance policy with broad guaranteed benefits that anyone can buy into if they want, which will be affordable, fair, honest, loyal and true.  Democrats claim that this government insurance product will keep the private plans honest and force them to keep premiums down and benefits up.  Now, let us ignore for a moment the fact that the hundreds of health insurance companies in America compete tooth and nail for business right now using prices, benefits and other innovative features to attract customers away from their competitors.  What impact will the public option have?  It will have only one of two impacts.

One is that it will sputter along, unable to innovate and with bureaucratic inefficiency and burdensome requirements, and it will prove unattractive to consumers (see Postal Service versus FedEx).  It will end up as the insurer of last resort for those with illnesses and who make poor lifestyle choices and result in a vastly expensive health care plan vacuuming up untold billions in tax dollars because it's business model is unsustainable.  In other words, it will be a much bigger Medicare and Medicaid.

The other potential for the public option is that it will undercut the private insurers on price using tax dollars to subsidize premiums.  Employers will eliminate health care benefits and the accompanying costly overhead and encourage workers to join the public plan.  The government will continue to layer new and expensive regulations on private insurers, further crippling their ability to compete with the feds, and, ultimately, it will dry up the private insurance market.

In the end, the president is offering Americans a deal.  The upside for those who already have health insurance is almost nil, other than relieving the guilt one feels over the existence of the uninsured.  Most people get nothing but the guarantee of more government spending.  The potential downside is the crippling of health care under government control, where costs are contained by restricting access to care, shifting the burden to the private sector and reducing innovation and new technology.  It is a picture of overall mediocrity, guaranteed for all.

The administration needs to stop building strawmen to attack in this political debate.  Employers, providers and even insurers are all anxious for real reform that will make needed changes in how we, as a society provide health care.  The administration must stop painting those who don't drink their Kool-Aid as defenders of the current system.  Change can come in many forms.  The president and Democrats do not have a monopoly on the right answers and they dismiss out of hand any options that do not include making the government the ultimate authority over all things health related.

If Americans look at this proposal and how it will impact them personally in exchange for the evident and potential costs, they will see through the smokescreen and demand a more thorough, deliberate and transparent debate, rather than a five month rush to shove "reform" down America's throat.

Douglas O'Brien is a former official with the US Department of Health and Human Services
In his campaign to persuade Americans to go along with, if not support, a government takeover of the 18% of the economy that is the health care sector, President Obama keeps making a claim that is intended to soothe fears among the general public.  But his assurances may lead to a rapid disintegration of support for Democrat "reform" proposals.

While he continues to woo skeptical physicians, as he did at the AMA convention in Chicago yesterday, and urges hospitals, insurers, device and drug makers to get on board the reform train, it appears the hardest sell is going to be the general public.  But by forcing the action over the next few weeks, the president may be able to achieve his aims before Americans can see past the media cheerleading and rosy, but patently false promises.

As statistical context, numerous polls, including those by Democrat Stanley Greenberg, show that three-quarters of Americans are satisfied with their health insurance.  Most polling shows broad but lukewarm support for the notion of reform but opinions diverge greatly over what it should look like.  Just over 15% of the population, or about 46 million people, is without health insurance at any given time, and polls show Americans, being the sort of people they are, would like to see everyone have sufficient access to care, and want to see the costs of care controlled to minimize the impact on our pocketbook.

The President's general plan is to get as many of those 46 million covered, by expanding eligibility for government insurance for the poor or elderly, by forcing employers to offer health insurance or pay a tax to fund public insurance for workers, and by requiring healthy middle class individuals to purchase insurance if they don't fall into the first two categories.  And he is going make the whole thing affordable by making care more efficient.  How those efficiencies supposedly work is a topic for another day.

But what about this vast majority of Americans who have insurance with which they are generally pleased?  As with any business interaction, from restaurants to car dealerships, everyone has instances of displeasure with service and products.  Everyone seems to have a story of how some claim got screwed up or how some test was not covered, but, overall, people are pleased with coverage and care.

Over and over, President Obama has sworn up and down that if you are happy with your current insurance you can keep it and your life will go on unchanged.   You needn't worry because the government will take care of all those other people and you can maintain your generous coverage that allows you ample access to all manner of care.

This is an entirely unsatisfactory argument for supporting the administration's plans, and it is most likely entirely untrue.

Most Americans get to keep what they already work hard for while upwards of $2 trillion in tax dollars are going to be spent over the next ten years on "reform?"  The biggest expansion of federal spending ever and at the end of the day, and then most people have absolutely nothing to show for it?  The administration's reforms are systemic, they will benefit the overall delivery of care for the aggregate population and create efficiencies that will have universal impacts but make virtually no difference in the care or costs for an already-insured American. 

So, in exchange for vast new spending, an exponential increase in government involvement in health care decisions, additional taxes that will slow recovery, new burdens on small businesses that create jobs, and a stifling of innovations, most American families get bupkis.  They get the status quo.  They don't get punished.  What a deal!

But the status quo is the best case scenario for America's privately insured families.  As skeptics have repeatedly pointed out, the Obama "reform" proposals are likely to have numerous indirect impacts on the insured that may result in enormous changes in their current coverage and could diminish access to and quality of their care.

The primary way the government has contained its payments for health care for those covered by public insurance has been to simply reduce reimbursements to providers.  This means costs are made up by charging more to those with private insurance or paying out of their pocket.  When the government puts more people in public plans, more costs will be shifted to private insurance patients and premiums will rise, coming out of either workers' pockets or employers' pockets.

The administration has already been quite frank that it is going to try to limit the use of new technology to lower costs.  Under the guise of "cost effectiveness" policies, the government will issue rules on when expensive new health care treatments can be used.  If your situation does not meet bureaucratic guidelines, then the newest test or treatment will not be available to you or your loved ones.  Not only will this restrict your access to care, it will also slow the development of new technologies, which need potentially broad new markets to be economically viable.  The new technology that gets shelved could be the one that would save your life.

Many Democrats are demanding a "public option" as part of the brave new world of health care.  Essentially creating a government health insurance policy with broad guaranteed benefits that anyone can buy into if they want, which will be affordable, fair, honest, loyal and true.  Democrats claim that this government insurance product will keep the private plans honest and force them to keep premiums down and benefits up.  Now, let us ignore for a moment the fact that the hundreds of health insurance companies in America compete tooth and nail for business right now using prices, benefits and other innovative features to attract customers away from their competitors.  What impact will the public option have?  It will have only one of two impacts.

One is that it will sputter along, unable to innovate and with bureaucratic inefficiency and burdensome requirements, and it will prove unattractive to consumers (see Postal Service versus FedEx).  It will end up as the insurer of last resort for those with illnesses and who make poor lifestyle choices and result in a vastly expensive health care plan vacuuming up untold billions in tax dollars because it's business model is unsustainable.  In other words, it will be a much bigger Medicare and Medicaid.

The other potential for the public option is that it will undercut the private insurers on price using tax dollars to subsidize premiums.  Employers will eliminate health care benefits and the accompanying costly overhead and encourage workers to join the public plan.  The government will continue to layer new and expensive regulations on private insurers, further crippling their ability to compete with the feds, and, ultimately, it will dry up the private insurance market.

In the end, the president is offering Americans a deal.  The upside for those who already have health insurance is almost nil, other than relieving the guilt one feels over the existence of the uninsured.  Most people get nothing but the guarantee of more government spending.  The potential downside is the crippling of health care under government control, where costs are contained by restricting access to care, shifting the burden to the private sector and reducing innovation and new technology.  It is a picture of overall mediocrity, guaranteed for all.

The administration needs to stop building strawmen to attack in this political debate.  Employers, providers and even insurers are all anxious for real reform that will make needed changes in how we, as a society provide health care.  The administration must stop painting those who don't drink their Kool-Aid as defenders of the current system.  Change can come in many forms.  The president and Democrats do not have a monopoly on the right answers and they dismiss out of hand any options that do not include making the government the ultimate authority over all things health related.

If Americans look at this proposal and how it will impact them personally in exchange for the evident and potential costs, they will see through the smokescreen and demand a more thorough, deliberate and transparent debate, rather than a five month rush to shove "reform" down America's throat.

Douglas O'Brien is a former official with the US Department of Health and Human Services