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Obama, health care reform, and economic crises: Would a new, autonomous layer of help?

Posted Nov 21 2008 2:01pm

by Ed Howe

My entire career I worked in our country’s dysfunctional health care system, the unintended consequence of federally imposed wage and price controls during World War II. That decision nearly seven decades ago led to employers negotiating and providing health care coverage.

With the Obama election we will see reform, but what will it look like—and when will it start? Will reform address uneven outcomes, over utilization, too much money spent on overhead and bureaucracy, and a health insurance industry that profits by denying care and avoiding risk?

Conventional wisdom seems to be that health care will take a back seat to our current economic woes. However, I believe that addressing our current health care issues will be part of the economic solution.

The auto industry is on the verge of collapse, partly because of the structure of its health care legacy costs. I foresee that part of the bailout will be the government picking up these legacy costs. In return, the government will get some percentage of future payrolls from the auto industry, funneled into a central fund, much like social security. The difference, however, is that with social security, no one expects employers to design benefits for their employees.

Once a payroll tax is agreed upon for health care, there will also be no reason for employers to design benefits—in this case, health benefits. That precedent set, many other employers, both private and public, would opt into a payroll tax. The result? Our present system dissolving not with a big bang, but with a whimper. If this happens, the government will see how all the players in health care readjust to a smaller revenue base.

Tom Daschle has argued that some form of “Health Care Reserve Board” could set rules and standards. In the past, I have opined against another administrative layer, arguing that CMS could do that role. I have changed my mind. Without a semiautonomous board, the lords and overlords in Congress (whose only intent is to protect their kingdoms) along with the various health players petitioning the government (and paying their tribute in campaign financing) would leave little chance for a new system to be concerned what matters — the peoples’ health care.

A new system that encourages patients to be involved in both what their care is and how it is paid for will end up with better results than a top-down-command-and-control system of care.

I have spent a career battling the status quo. With some hope and luck, I look forward to the future. I continue to support integrated delivery as the best organizational solution.

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