Everyone wants health care reform, including HealDeal.

As we all know, the issues are complex. A major challenge is who will pay for the increased cost of coverage. The public wants care but doesn’t want to pay for it. Should we have the $250K+ earnings pay for it? Should we tax health benefits, which effectively increases the tax on the middle class? Universal coverage will inevitable increase taxes over the long term.

The public plan option is another sticking point. Obama wants a public plan alternative for those that can’t afford coverage. It’s basically an expanded Medicaid option. Some don’t believe the government is as efficient, effective, and innovative as the private section at running a health plan. Furthermore, health plans worry that it’s not fair for to compete against a government run plan. The American Medical Association (AMA) is also weary of an expanded government run program because of the low reimbursement rates from Medicare and Medicaid. Despite all these challenges, coalitions and all impacted groups from pharma to health plans to providers want to see change.

In addition to all these challenges, Obama wants to fix health care without increasing the deficit!

All this momentum is encouraging and hopefully we can materially increase coverage. While increased coverage will reduce the cost of health care (e.g., use of preventative care, fewer ER visits), more will still need to be done. We believe that until the health care market becomes more of a consumer market, costs will continue to rise faster than inflation. We know other countries which offer universal coverage still suffer from increased cost of health care. Until the incentives are aligned the cost of care will continue to increase.

HealDeal was started to create a free market for health care services. This free market rewards providers for quality work and patients for smart shopping and health behavior. Like others in the health care business, we’re willing to change our business model to accommodate increased coverage but the core reason for our existence will remain the same: bringing free market transparency to health care.

A recent article in the New York Times illustrates an important problem of the auto industry bailout. By not addressing the cause of high costs in health care coverage the bailout discussion focuses only on finding the money to cover the expenses. The article was focused on General Motors need to restructure its debt obligations. One looming debt is a $10 billion payment next year into the UAW Health Care Trust. “G.M. has the most at stake with the U.A.W. Its future obligations for retiree health care are estimated at $47 billion, and by next year it is required by its contract to contribute more than $10 billion to the trust set up in 2007.” 

The article goes on to state, almost off handedly, that GM has already cut health care benefits to over 100,000 nonunion retirees. That is a quarter of the retired GM workforce.  The Unions for their part are trying to protect the “jewels’” of the UAW contract, one of which is health care for life. 

Any government bailout of the auto industry should focus in part on reducing the cost of health care. It is unconscionable that the federal government would take tax payer’s money to provide assistance to the auto industry and not require a restructuring of the health care system for retired workers. 

Several people have suggested solutions to health care reform related to the auto industry bailout.  One suggestion from David Yen , a bankruptcy attorney, supports giving the unions tax credits tied to the union health care bill rather than direct cash payments. This solution, while right in intent, would not address the problem of rising health care costs, as there would be no incentive for the unions to secure the best value in health care services. As we have seen with Medicare, benefits without incentives to reduce costs inevitably result in higher costs overall. 

Clearly, it is a high probability that if GM goes out of business or is restructured under bankruptcy the health care provision will be eliminated. It would seem in the UAW’s best interest to work the problem from the cost reduction end and provide assurances to GM and the government that their retired members will reduce the health care burden by taking measures to reduce costs. Those measures could include, bargaining for health care services as a group, providing their membership with cost comparisons of service providers, or instituting health improvement measures such as smoking cessation and healthy lifestyle programs for their members.

Without addressing the high cost of health care the auto industry bailout will only be perpetuating the current health care pricing system that ignores transparency, price comparisons, and cost reductions in favor of “business as usual.” This country can no longer afford “business as usual” health care.

I had a pleasure to meet the CEO of Sermo, Dr. Daniel Palestrant. What struck to me was his genuine efforts and focus towards his mission of providing a credible physicians networking web-lounge. Sermo provides free exchange of knowledge between physicians of various specialities, improving the process of decision making.

Health2.0 companies like these are bringing a shift in paradigm for healthcare delivery. They work on developing the patient outcome data that eventually have a potential to replace the conventional randomized control trials, hence shifting the medical innovation from a lab to the people.

Cheers,

Archana Dubey, MD