Oct 29

The Good and the Bad of the Proposed Health Care Plans

Category: Uncategorized,

In general we try to keep this blog focused on facial plastic surgery but with all the news about this historic election we thought we would take some time to examine the important points of each candidate’s proposals for health care reform.

If you’re like us, even though only a week is left before the election, you are probably still confused about both candidates’ plans. We watched all 4 debates and what we were left with was the notion that McCain wants to give a $2,500 or $5,000 tax rebate—that may or may not end up costing us more—while Obama spoke about massive reform of the system, which would cover more people under government health care but still be supported by employers paying into the system…and maybe being fined if they didn’t.

In the last week’s Journal of the American Medical Association, each candidate tried to distill their ideas succinctly into a few pages and we are going to highlight those (and occasionally lay criticism) as equitably as possible.

The McCain system’s highlights and low points:

  1. “The foundation of my health care plan is a belief that American families—not government bureaucrats or insurance companies—should choose the coverage that best meets their unique needs.”
  2. “Simply offering increased access to a system that costs too much will not provide real reform.”- Yes, but nobody can deny that both increased access and lower costs are necessary.
  3. “Only by restoring doctors and patients to the center of health care decisions can we improve quality and reduce costs…”- Nice rhetoric. Let’s get specific…how is McCain going to do it?
  4. “Government bureaucrats and the distortions they have created in the market for health care are a prime driver of the practice patterns that lead to rising health care costs”– This is true: if Medicare increases payment for more high tech procedures, more high tech gets done, even if it’s not needed.
  5. “Expanding the government’s role in Americans’ health care will make things worse, not better- just ask our neighbor to the north.” We have firsthand experience and have to agree. Government-sponsored healthcare sounds excellent in theory, but simply does not work in practice and leads to increased access to less specialized medicine: see our blog on Canada for more detail (http://www.rhinoplastyinbeverlyhills.com/is-health-care-in-canada-really-better).
  6. To make insurance affordable for all Americans- provide a refundable tax credit of $2500 for individuals and $5000 for families to use for health insurance – We like this idea. Many healthy, younger people who now don’t have insurance will join in and thereby help stabilize costs for everyone
  7. Presently, if you leave your job you lose that insurance, thereby essentially locking some people into their job for fear of losing their coverage– McCain states his plan provides options for coverage that will follow the family from job to job so you don’t have to start over with a new doctor. Under the current system, you can be covered by a COBRA plan if you lose your job, but you may have trouble qualifying to roll that into an individual plan later if you haven’t found another job.
  8. “Opening the health insurance market to nationwide competition would give people many more choices of policies” thereby “putting pressure on companies to provide better care at lower costs”- This is slightly shady to us. Different states have different rules for insurance companies, so the federal government would have to create a minimum standard of rules for all states to abide by.
  9. “My plan will create a new Guaranteed Access Plan, or GAP, to help those” with preexisting conditions or others who otherwise have denial of coverage.– It sounds good in principle, but how would he make it work? McCain states that this will not be another “unfunded mandate” but we need details. How is he going to get them to lower costs so that patients can have access?
  10. “Our current tort system drives numerous inefficiencies in the health care system. Doctors are forced to perform repetitive and often unnecessary tests in order to protect themselves from the risk of lawsuits.” Not only does the tort system drive up cost, but it also limits availability of specialists- This is the heart of the issue with regard to healthcare reform. Unless there is significant nationwide tort reform, real health care reform is impossible. As long as doctors are forced to practice “C.Y.A.” (“cover your ass”) medicine, they will continue to order more unnecessary and expensive tests that drive up cost and don’t really improve outcome.
  11. Like Obama, he stresses need for government to fund early intervention programs that focus on preventive health care. However, unlike Obama, he does not sound nearly as compelling or as convincing in how he will do this.

The Obama system highlights and low points:

  1. “The Obama-Biden health care plan will guarantee that all Americans have quality health coverage and will save a typical family up to $2500 every year on medical expenditures”– Sounds great but how will he increase coverage and save money without increasing taxes? As we have heard time and again, Obama is planning to reduce taxes on everyone earning less than $250,000 per year (or $150,000, if you believe what Biden said yesterday), so how are we as a nation going to come up with this money?
  2. “For Americans satisfied with their current health insurance, nothing will change except their costs will go down”- The devil is in the details! How, exactly, will the costs go down?
  3. “Americans will also be able to choose from a range of private health insurance options through a New Health Exchange (NHE), which will establish rules and standards for participating plans. The Exchange will also include a new public plan that will provide coverage similar to the kind members of Congress give themselves”- Sounds good…but where is the money coming from to provide for this coverage? In other words, who is paying for this? This would have the same problem as McCain’s plan in that states now place their own standards, so is the plan to do away with state’s rules and regulations and supercede them with Federal regulation? If this is the case, this is essentially the same as McCain, except it includes a National Health Exchange.
  4. “Americans who cannot afford it (the public plan) and do not qualify for Medicaid or SCHIP (State Children’s Health Insurance Program) will receive a tax subsidy to pay for coverage”– How much tax subsidy? Will these people be forced to apply that tax subsidy to enroll in the public plan?
  5. “Plan will require coverage for all children and require that employers either make a meaningful contribution to coverage for their employees or contribute a percentage of payroll toward the cost of the national plan. Small businesses will be exempt …but our plan will create an incentive for them via a refundable tax credit worth up to 50% on premiums”- And if parents don’t/can’t purchase insurance for their kids, or employers don’t make a “meaningful contribution”…what are the penalties? McCain raised this issue but no answer was given in the debate. How do you define what a small business is, and what is the percentage of payroll that will have to go to the national plan?
  6. Make an up front investment of $50 billion in electronic health information technology to reduce errors, saving lives and money”- This truly sounds like a great idea but what is this money buying? Is the government buying one electronic medical system that they will then provide to every hospital, doctor’s office and pharmacist?
  7. “Requiring health plans to disclose what percentage of premiums actually goes to patient care as opposed to administrative costs”- This is a great idea.
  8. Reforming medical malpractice while preserving patient rights, and strengthening antitrust laws to prevent insurers from overcharging doctors for malpractice- Sounds good but the verbiage does not seem to be as direct with respect to tort reform needed.
  9. “Plan will allow Americans to import inexpensive and safe prescription drugs from other countries, increase the use of generic drugs in all public health plans, stop large drug companies from paying to keep generics out of markets just to preserve their profits, and create a pathway to bring generic vaccines and other biologic medicines to the market”- Good in theory…but what happens if one of the drugs you import from another country is somehow not made appropriately due to lower standards in other countries (for example, think of China and the recent milk epidemic). The overarching principle is fantastic but the details are very thorny…however, McCain in his brief outline in JAMA did not address the point of medication cost at all.
  10. Like McCain, he stresses need for government to fund early intervention programs that focus on preventive health care. He sounds more committed to funding community based clinics but again does not state where the money comes from.

Based on all of the above, you can guess we do not love either plan though both have some merits. Overall, the major point of difference between McCain and Obama is government role. While McCain may be offering too little in terms of government, it is hard to believe that even as we have exploding deficits, Medicare and Social Security bankrupting, that we as a nation can afford the Obama plan. Some can argue that we cannot any longer afford not to overhaul the system and that is very true. It may seem that we give McCain an easier time; partly, that is because it largely maintains the system as we have it and tries to remove state constraints to open options, and thereby lower prices. It is largely a band-aid.

The Obama plan is far more audacious and, as he is the front runner, far more worthy of detailed critique. We simply do not see how this plan can work with centralizing and socializing the system or by setting up a two-tier system like in England. That may sound nice—Hey! Everyone will be covered!—but the reality, based on our experience, is that you are stealing from Peter to give to Paul. In an effort to cover the millions currently uninsured, you decrease the level and quality of care received by all. It is our belief that McCain is right in his observation that privatized healthcare allows for more advanced health care, but whether this translates to improved quality depends on the parameters you use to decide. Frankly, based on how our government has managed Medicare and Social Security, we do not believe Americans would be happy with a centralized health care plan, nor do we believe that the government can manage so audacious a plan without bankrupting the system or…if you’re ready for it…for us to ration health care- based on our experience we don’t think so. When it comes to your health or the health of a loved one, we find Americans want everything done that can be done.

We ask everyone who reads this to think for themselves and make a choice. Don’t let the polls decide or persuade you one way or the other.

Obama vs McCain Helath Care Plans

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