Health care reform: A closer lookArticle added by Al Jacobs on August 21, 2009

Al Jacobs

Laguna Beach, California, CA

Joined: August 21, 2010

My Company

It appears health care reform legislation, so ardently promoted by President Obama, recently hit a snag. On July 23, 2009, Senate Majority Leader Harry Reid announced the Senate needed more time to consider "this complex and difficult issue," in hopes that a final bill might be sent to the president by the end of the year. That proclamation ended any prospect for prompt passage of what many describe as Obamacare. With the rush to enactment now ended, there's time to look more realistically at this nation's health care problems to see if something sensible might be accomplished.

We must hope the laws eventually enacted will not resemble the 1,017-page, $1.5 trillion, America's Affordable Health Choices Act (H.R. 3200), which passed the House Ways and Means Committee July 17 on a 23-to-18 vote. It purports to mandate health care coverage for all Americans, establishing a Health Choices Commissioner with broad authority to "oversee medical plans nationwide." This is accomplished through creation, expansion and extension of 33 entitlement programs and the implementation of 53 offices, bureaus, commissions and programs. Its provisions include a 2.5 percent tax on individuals who do not obtain insurance coverage through an employer or government-run exchange, an 8 percent tax on employers with annual payroll of a quarter million dollars or more who do not provide health insurance, and a new surtax on "high earning filers." The provisions, which go on page after page, radically alter traditional medical practices and place government officials squarely between patients and physicians. If it becomes law, I believe the health care provided to most citizens will become a nightmare.

Having established criteria as to what health care reform ought not provide, I suppose I'm now obligated to describe what it should provide. I'd do so were it meaningful, but I fear it doesn't really matter what laws are enacted. It's my belief that the medical care in store for most Americans is predetermined, and no rules imposed by any authority, however well-meaning, will alter what is destined to be.

The fundamental problem is remarkably simple: While medical technology becomes increasingly complex and costly, a substantial and growing portion of the population, with little or no financial resources, is guaranteed limitless access to the services. The solution to the problem is far more complex and involves the political quandary of requiring massive transfers of wealth among various groups of the society. As difficult as this might seem, there are three factors making it all the more unresolvable. The first is the number of retirees eligible for Medicare, which has now passed 40 million and is growing steadily. The second is that an increasing number of companies are ridding themselves of employees and transferring their assets outside our borders, beyond the reach of regulators and tax collectors. The third, and perhaps most crucial, is that the effective tax rate on a middle class working American is approaching 50 percent. Not only is there little slack, but the rate is reaching what historically constitutes revolt conditions. One thing is becoming ever more obvious: The nation will eventually decline to extract money from $9.50 per hour service station attendant Billy Rae Campo so penniless widow Myrtle Fellers, age 94, can have bunions removed from both feet at a cost of $9,700 to the Medicare system. In the meantime, however, it is business as usual. With such expenditures, of course, there must be corresponding economies such as Billy Rae's wife, Sue Ann, not having her cervical cancer diagnosed in time to save her life.

President Obama and our congressional leaders are responding the only way possible. They are searching for ways to reduce services and the attendant costs. Their chosen model for this change is the health maintenance organization (HMO), ideally set up to ration health care, and the federal government's aggressive promotion of this concept for Medicare and Medicaid recipients is understandable. This is not occurring without severe upheaval, however, as the HMOs are squeezed between the medical recipients demanding ever more benefits and the payors seeking to reduce expenses. What is developing as a logical response is the capitation arrangement, by which medical providers agree to accept a set monthly fee per patient. The effect on the entire medical establishment is becoming cataclysmic, as physicians, pharmacies, therapists and the like see their fees reduced to unacceptable levels. Meanwhile, the majority of HMOs are themselves in precarious financial condition, with mergers and bankruptcies increasingly common, and the attempt by many to shed themselves of unprofitable Medicaid patients merely adds to the dilemma.

I'll conclude with a final thought: In connection with the delivery of medical services, we face the reality of demographics. In the years between 1946 and 1964, 78 million Americans were born. These baby boomers are today's aging citizens, and as people age, they develop ailments. With enactment of President Lyndon Johnson's Medicare in 1965, the die was cast. Soon, this huge mass of the electorate, with a vested interest in maintaining its preferred status, will be sucking up medical services at the expense of the rest of the populace. There will not be enough dollars left in circulation to provide even marginal health care to younger working citizens who must pay the bill. It's my firm belief that in the end, the federal government will establish a Governmental HMO to provide universal service to the nation, which will supersede all other medical delivery systems. With few exceptions, all Americans will be relegated to third rate medical services funded by the taxpayer and supervised by government officials.

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