Motivating the Government Way, or How to Implode

Let’s look at the standard Governmental method to motivate and stimulate competition in the Health Care system. Because the Obama Administration and the Democratic party considers Health Care Reform to be one of their “must-do”, “gotta-get”, “campaigned on” political promises to deliver upon, it is a centerpiece of their agenda. To help achieve this goal, the Administration worked out support (a deal) with the insurance industry for a commitment by the insurance companies to reduce the rate of growth of health care insurance costs. So if the Health Care Reform bill passes, then we can all be assured that we have achieved a significant benefit and can expect our health care costs to be more affordable, right? I mean that is the basic objective of the Health Care Reform bill, isn’t it?

Well, no! There is no objective that the new Health Care system will be more affordable exactly, just that all Americans would be able to get at least a basic affordable plan. This is not necessarily the same thing as a more affordable overall national health care system. It does not promise, and certainly it does not guarantee, that the cost of health insurance that you are paying for (or is paid for you) today will be lower under the new HCR plan. Even if you were one of the ~40 million Americans who are uninsured under the current health care system, the promise that you will now have a ‘basic’ and ‘affordable’ plan is not at no-cost to you. Further, the basic plan that you will be offered does not have to compare with or even come close to any plan that is offered by any insurance company today. So to be accurately and honestly more affordable wouldn’t it be necessary that it cheaper than an identical plan currently is?

The offer to reduce the rate of increase in health care costs means more or less the following:

• If I was going to raise the cost of premiums at say a rate of say 5% a year (Oh by the way, it was going to be higher); and I promise that it will be lower, say 4% a year then how much cheaper is it going to be than today? It isn’t, it’s just going to be cheaper than it was planned to be next year. So what I saved you is a little of the additional money I was going to take out of your pocket anyway. You still have to pay more.
• On my side I get to take a current $1000.00 premium payment and charge $1040.00 next year, and $1082.00 the following year, $1125.00 the year after that, $1170.00 a year later, and on and on.
• If I can keep my costs increases below that rate of increase then I can still make more money.
• If I get to have more people paying such premiums, which I do, then I make even more money than before. Oh, and it was profitable before anyway.
• If I get to keep adjusting and adapting what your ‘basic’ plan covers or what co-payment you might need to contribute, or what payments I make out then I can even continue to increase my profitability

I can do all these things, and not one of them will improve health care, or in reality make it “more affordable”.

The meaning of affordable is one of the key concepts that should be assessed, evaluated and clearly understood by the public; so that the American population will know for what they are being asked to accept and pay. This represents a timely and urgent need for a “truth in advertising” facet with respect to U.S. Government legislative efforts and programs. As of today, neither the Democrats nor the Republicans have found, or more likely tried, to provide a clear, complete and comprehensive description of the Health Care Reform act that they are proposing. The structure and formats of the bills that have been presented are reader unfriendly and bureaucratically obfuscated to render them useless to politician and public alike. The best council that I can give the public is: caveat emptor (let the buyer beware).

I don’t disagree with the motives for a good Health Care Reform bill to improve the public health, to improve the Health Care system and to improve the quality of the American health care industry. I even endorse the benefits that an improved system would bring by way of increasing the profitability of the health care industry itself, though no politician or party has apparently considered or presented this concept in seeking support of Health Care Reform.

Another odd aspect of the current debates and disputes on Health Care Reform is that neither party seems to understand the opportunities that Health Care Reform from their ‘traditional’ philosophical viewpoints and standards. [I don’t actually believe that Republican as conservative or that Democrats are liberals. I think they are just run of the mill members of Congress; that is incompetent buffoons.] If it weren’t for party loyalty and their behaviorally programmed rabid compulsive obsession to opposing Democratic legislation, the Republican party’s membership should be salivating at the Health Care Reform act being sought. Given that the insurance industry’s contributions to Republicans is probably greater than those it makes to Democrats you would think they would have figured out how to use the Reform effort to garner even more of our health care dollars into their political campaign funding and all the extra goodies that they manage to get during or after their residency in Congress.

The system that the Health Care Reform act will need to employ to truly make Health Care more affordable, more efficient, and higher quality is to provide both a carrot and a stick program. The insurance companies will have to offer their ‘basic’ affordable plans and compete on price with each other. Additionally, the Government will assess the costs of these plans against the pay-outs and the profitability of these plans and reward companies that have lower costs, lower pay-outs and higher quality of performance and results of treatment than other companies. [Yes, we will have to establish the appropriate metrics and measurement that enable the comparisons and evaluation of companies; but that is part of creating a program no matter how well or how poorly structured].

Let the carrots feed the system and make it grow; but use the stick to train it to perform its tricks ever better.