Monday, May 11, 2009

Oh, Sure: NOW They Get It!

[Welcome Industry Radar readers!]
For some 4 and a half years, IB's most significant and oft-repeated message has been that health care costs drive health insurance costs. Finally, it appears that someone has listened, but whether or not it's too little or too late remains to be seen:
That translates to an average of $200 billion per year, which is a non-trivial amount. Is it enough? Good question. A better one would be: and from where would these cuts come? Providers are already screaming about reduced reimbursements from both Medicare and insurers. The reality is that this seems both irresponsible and unlikely.
How's that, you ask?
Well, let's deal with the latter:
"The groups concede that their prices are not going down, they are merely slowing the rate of growth. But economists say the move would create breathing room to help provide health insurance to an estimated 50 million Americans who now go without it. "
Kudos to the economists who seem to "get" that health insurance costs are driven, to a large extent, by health care costs. Raspberries, however, to the folks who think that merely slowing the rate of growth (by how much is left unspecified) will significantly impact the problem. Yes, it's a step in the right direction, but until there's a push for more personal responsibility (and accountability) in both the delivery and financing of health care, we're merely slowing down, not changing direction.
The irresponsible part is neatly summed up about halfway through the Fox piece:
"There's no detail on how the savings pledge would be enforced. And, critically, the promised savings in private health care costs would accrue to society as a whole, not just the federal government. That's a crucial distinction because specific federal savings are needed to help pay for the cost of expanding coverage."
This is a policy statement, not a plan of action (which seems to be the MO of our current political class). Just how does one go about implementing these lofty goals? An email I (perhaps not coincidentally) received this morning reported that "UnitedHealth Group Executive Vice President Simon Stevens spoke about how health care coverage for all Americans is attainable and can be funded by slowing the growth in health care spending in the United States." He made this statement late last month while addressing the Illinois Chamber of Commerce Employer Health Care Conference in Chicago.
If we posit that health care spending will slow, generating enough funds to attain "universal coverage," who's responsible for the "universal" part? It certainly implies that there will be some kind of mandate requiring everyone to buy insurance, whether they want to or not. Does this mean that carriers will be forced to issue coverage on everyone? We've seen how well that works: in every instance, the cost of health insurance skyrocketed. Where are the (alleged) savings then?
Why is it that we see no concrete insurance policy criteria? How about we delete some (maybe even most) of the expensive mandated benefits, and increase deductibles? And if we must require certain benefits, how about some that benefit everyone, not just a politically-connected few? Preventive care benefits, for example, can help to cut costs over time.
As we've seen time and again, there seems to be no move to address the underlying premise: when someone else is paying for our care, money and responsibility are no object. How about we take a look in the mirror, instead of at Washington?
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