• This kind of stuff is bad

    From today’s WSJ:

    Health-industry groups are pressing to roll back key provisions in the Obama administration’s health-care overhaul if Republicans recapture the House, but they’re also worried that the party could go too far.

    If they win the House, Republicans have promised that one of their first votes will be to repeal the health-care law passed in March. That would ultimately be stopped by the White House, or first by the Senate if Democrats retain control of it.

    But Republicans will have the power to block appropriations funding for the least popular parts of the overhaul. And health-industry groups, which aligned themselves with Democrats to pass the overhaul, are now reaching out to Republicans to help shape the GOP’s health-care agenda.

    Insurers want to reverse tax increases and loosen restrictions on insurance premiums, and several groups hope to tack on medical malpractice protections.

    At the same time, the health-care industry is concerned that Republicans want to remove the requirement that most Americans carry health insurance—a provision that rewards health-care providers with millions of new customers.

    Think about that.  Insurance companies first want to reverse things like the excise tax.  That’s one of the few cost controls in the bill.  Then, they want to loosen restrictions on premiums.  That will lead to increased ability to raise premiums and loosen restrictions on how much money they can spend on non-health care related things.

    What don’t they want?  They don’t want the mandate repealed.

    Let’s say the Republican Congress follows their lead.  We’ll see a PPACA where people are still forced to buy insurance, but it’s more costly, less of it goes to care, and there’s nothing in place to bend the curve.  Plus, with more insurance-friendly governors, expect state-based exchanges to be insurer friendly and – perhaps – lessen Medicaid coverage.  It’s the nightmare scenario.

    Scoff if you will; but this seems more likely than repeal.  And, as I’ve said before, insurance companies are very, very good at what they do.

    • It’s all about “bending the curve”, isn’t it. That’s the thing that will happen, whether we like it or not, over the next decade. The only question is what causes it to bend.

      I realize that I’ve already started asserting things without providing corroborating evidence (and have read your warnings to commenters about that), but perhaps you’ll allow some leeway. I’m just trying to paint what I see as the overall picture of the problem with U.S. healthcare – I do have a good deal of of experience across industries within it, and have come to the conclusion that the real problem with health care in America is the extent to which the market has become twisted by regulation.

      Primarily I mean the kind of regulatory capture you’ve referenced above (it’s what insurers do), but not just by insurers. Every actor in the health care industry has provisions written into law in its favor – some to the detriment of other players in the industry as they vie for their pieces of the pie, but falling most heavily on those of us who pay premiums on private insurance.

      I emphasize regulatory capture, though I think it’s fair to recognize that over time the sheer volume of regulation also starts to act as an independent drag on efficiency. Certainly I’ve worked with clients who had big (and reasonable) ideas about how to do things better who were stymied when they realized there was no clear path that would allow them to do it. Basically, they would have to have carved out new provisions in the law to allow them to try to make the path from patient need to patient care more efficient.

      And, of course, there is the fundamental fact that on the whole we as a country don’t want pure free-market health care. We want the elderly and the poor to have access to quality care, and we don’t want that access to depend on charity. But then we lose our bearings, and (after the lobbying is done) we decide that this means that everyone should have access to everything manufacturers produce or providers provide, not matter the expense.

      Which wouldn’t be such a problem if the incentives weren’t in place to make care super-expensive – which of course they are. I’m taling about third-party payment, employer-based insurance, and the simple fact that nowhere in the system is there an entity that has to decide – at this price, this service/product/whatever is worth it, and above this price we’d go with the alternative.

      If we’re not going to put the patient in that position (pure market position), we’re going to have to put someone else there. But I guarantee that if private payers tried too hard to enforce such decisions, they would shortly be prohibited from doing so (and besides, it’s not in their best interest to deliver efficient care until they can no longer pass through the premium increases – though perhaps we’ve reached that point).

      Providers are interested in bundling services in ways that provide good care at a reasonable price, and that might be an attractive option to payers. But that’s been a slow road so far, and then the battles over who gets to keep the margin (insurer or provider) begin.

      So it’s probably government that ultimately steps in and defines “cost effective” care along a model like the NHS (or, to some extent, the VA). Maybe there will be private insurance that allows an upgrade, or a parallel system of private care (more like the Canadian system). Or maybe we will adopt something like the Swiss system.

      Whichever way we go, however, I think that a massive overhaul of healthcare-related legislation and regulation will be required. And I don’t think the recent bills, or the posible revisions, are going to get us there.

    • I was in a brief discussion with a President of major regional Insurance company. He was flabbergasted at how many people said incredibly pejorative comments about his industry. His main point against PPACA was that he finds it interesting how legislators think targeting medical loss ratios are so easy. He then advised the legislators to run insurance companies because they obviously know something he does not. As well, he listed statistics on life time caps etc. It affects such a small tiny portion of the population. He agreed that these people still need help, but that Congress was using a bulldozer to cut the grass. As well, he never heard of rescinding coverage because of some one is sick. Rather, insurance companies will use the easier way, accusing the applicant of fraud. Rescinding coverage because of fraud is still legal.