Catch Up on the Nation’s Healthcare Reform

Once considered a recession proof industry, Healthcare now shows signs of a downturn. Since the Health system comprises 1/5th of the nation’s economy, law makers look to the new administration to create money saving opportunities in this sector.

The abundance of news coverage seemed overwhelming on this topic so I started ignoring the articles all together. Then I thought – others might have turned their ears and eyes as I did, so why not comprise the most recent information in a condensed format. Thus explains this blog post.

As you read this information, please note that it was my personal goal to keep bias out of the responses and simply present facts.

Let me start by highlighting that the goals of covering the uninsured while improving quality of care do not bode well to money saving opportunities. Both of these objectives point towards increased expenditures for the government.

So what options do the Obama administration have to broaden coverage and enrich quality of care while showing savings opportunities from the current plan?

Covering the Uninsured

1. Individual or Employer Mandate – Obama agrees only if small businesses receive exemption from mandate by a “hardship waiver”
2. Medicare and Medicaid Expansion – Allow individuals below poverty level and between 55-64 to receive benefits
3. Public Plan Implementation – Government-run program that competes with private insurers
4. Health Insurance Exchange – Central approved body of insurance options for individuals and small companies to purchase coverage
5. Tax Credits to Insured – Encourages buying of insurance via tax credits

Of the five listed above, the most controversial option is the implementation of a Public Plan. While advocates of the plan say added competition would lower prices and improve quality, opponents say the disadvantages to the private sector would cause them to pull out leaving a government-run monopoly.

Enriching Quality of Care

1. Reducing Medical Errors – Embrace new technologies and standardize checklists
2. Research Effectiveness of Comparables – Pertains to drugs, devices, and procedures to ultimately reduce costs
3. Pay for Performance – Reimbursement tied to health outcome in place of the current numbers game encouraging speed of procedures

Currently the Congressional Budget Office, under the leadership of Douglas W. Elmendorf, is evaluating the potential costs associated with the health overhaul. Can the changes mentioned above remove some of the waste from the system projected to consume $2.3 trillion this year?

The article “What Would A Health Overhaul Cost? All Eyes on the CBO” published by Lori Montgomery from the Washington Post commented that, “the CBO has proven unwilling to assume big savings from popular reforms, such as computerizing medical records and studying the comparative effectiveness of various treatments.” The CBO projected savings from electronic documentation as only $34 billion over the next decade – only a drop in the $1 trillion bucket reserved for the reform.

Elmendorf stated that the evaluation of projected savings for new technologies is difficult to pinpoint as the CBO must evaluate by estimations.

“It would be wrong for us to be conservative, in the sense of tilting toward zero, because we don’t know” how much money an idea might save, Elmendorf said. “On the other hand, we need to not get swept up in the enthusiasm for some new idea, because not every new idea works.”

What’s next on the CBO’s agenda?

Lawmakers requested the CBO to report on the reforms potential to remove deficits from the federal health programs Medicare and Medicaid early next week. With the unofficial mascot of a skunk – the CBO will not shy away from delivering a less than promising view on the subject. As the motto runs, the CBO aims to dispense truth, even when it is as welcome as a skunk at a picnic.

Want more information on our nation’s history of health expenditures? Check out the interactive guide provided by the Washington Post on June 9, 2009!