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The Great American Health Insurance Compromise

January 24th, 2009 by Andrew Yates

1223763950469Genetic discrimination: the biggest story in American health care that may never matter. Because while every aspiring academic to bizdev GINA blogger has yearned to break the big genetic discrimination story for years… the real story is about to be forced mass inclusion. After all, there will be no such thing as a pre-existing condition when everybody is covered.

It’s universal health care again, and this time it’s the “Baucus Plan,” a 100 page report titled “Call To Action: Health Reform 2009″ published by Senator Max Baucus (D-Mont.), 10th most senior Senator and chairman of the United State Senate Committee on Finance. But unlike Representative Dennis Kucinich’s stillborn 2007 H.R. 676 for national single-payer universal health care funded by taxes on the wealthy, the Baucus Plan proposes to subsidize the existing health care infrastructure by legally requiring all Americans to purchase private health insurance in exchange for a government guaranteed universal level of coverage.

This is not a new idea; John Edwards ran for president on this health platform in 2008. But today, the new political reality is that President Barack Obama has the media mandate, public support, and economic urgency to push significant health care reform —and, Baucus Plan is supported by the health insurance industry itself. As noted in Harper’s Magazine Feb 2009, “Sick in the Head,”

How could AHIP [America’s Health Insurance Plans, the national health insurance industry lobby] support a law that logically concludes in the demise of underwriting? [AHIP President and CEO Karen] Ignagni’s  answer was not what I expected…

“In the new market,” she said, “everybody’s going to be in. And then —and I don’t want to be an irresponsible Pollyanna about it— but if you have everybody in, you have the large numbers working for you.”

And there you have it: the plan to fix health care by making it federally compulsory to pay the titans of one of America’s most hated industries. It’s so crazy, it might work.

I’ve included the complete texts of the Baucus Plan,  the expose about health care reform in Harper’s Magazine titled “Sick in the Head,” and the complete GINA law, but I have mixed feelings about

  • I have yet to digest the material; I’ve only reviewed the text of the Baucus Plan since today. I’ll continue to research, think, and write about this topic, so subscribe to Think Gene! However, I am generally opposed to 3rd party payers. I think that medical services should be provided like legal services, insurance should pay for catastrophes, not routine care, and that the most significant savings would come from cutting most the administrative overhead in health care. I believe it’s better to have some waste in too much care rather than waste to pay for administrative overhead to enforce less care.
  • Nobody can know for sure if and when health care reform will be. I think if reform is going to happen, it’s going to happen during the heady first few days of the Obama presidency, but I have no way knowing for sure. A bill has not yet even been introduced to Congress.
  • Reform is necessary. Health care is vital national infrastructure, and in addition to personal concerns about available care, economically, sick people are less productive and diminish the quality of life for themselves and their communities who must support them. Yet, American health care is arguably not internationally comparatively effective, efficient, or widely available —but even if it were, there is a virtually unlimited demand for not dying, so health care improvements are always welcome.
  • The Baucus Plan will raise short term health spending for anticipated long term savings from efficiency and preventative health care. I have yet to form a concrete opinion regarding the feasibility of this idea. My initial impression is that aligning the interests of profitable business with keeping people healthy to avoid the big expenses of catastrophic and chronic health care costs is socially positive and pragmatic.
  • A federal mandate to purchase health care will foster a boom of health care investment, most probably in information technology and preventative, primary care. As a web software engineer and web publisher employed by a primary care practice specializing in genomic and genetic preventative care, my general sentiment on this point is pro-myself. But seriously, anything that can be spun in the media as “economic stimulus” will receive significant positive attention. It might actually be an economic stimulus.
  • Unlike the naive posturing for single payer universal health care in the past, the Baucus Plan facilitates the evolution of existing health infrastructure rather than reinventing it. I don’t appreciate the reapportioning of health care dollars into private wealth either, but the existing health infrastructure is enormous and its destruction would be extremely disruptive.
  • Health care costs will be capped. This will have two effects, a small, private, elite market for premium, non-insurance medical services, and an industry initiative to profit from the efficiency of automated systems at the expense of expensive human service staff (including physicians). Frankly, I can’t imagine a probable scenario in which the median physician earns more. However, mean physician compensation may increase to reflect increasingly disproportionate rewards for systems physicians who earn more by owning health systems or advance into business management —but then, are these professionals still physicians? Is Bill Gates a “programmer?” I also expect more lesser-trained, immigrated, non-physician health professionals like physician assistants to meet demand. Political flattery towards primary care physicians in the Baucaus Plan should be treated with careful skepticism. The government also erects monuments for dead infantry.
  • Controlling the health care dollar means controlling health care —specifically, you can invent schemes to pay yourself, a time-honored capitalist tradition. Unfortunately, much of that investment will be towards mass consumer advertising in a feeding frenzy to seize this new government mandated market. These advertising campaigns will resemble car insurance advertising. On one hand, I hate car insurance commercials, but on the other hand, much of the innovation in car insurance not towards talking animals or comic books has been in software and efficiency, so I like that.

U.S. Senator Max Baucus: Health Reform 2009

Harper’s Magazine Feb 2009: “Sick in the Head”
Genetic Information Nondiscrimination Act of 2008 (GINA) full legal text

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