the Global Observatory

WSJ’s summary of the recently passed healthcare reform bill doesn’t make it seem too bad.

The biggest problems that I can see include the following:

1. The Health Choices Commissioner - a government bureaucrat will decide what care you can get. As the WSJ writes:
   

   [Hospitals] would also face new penalties for readmitting Medicare patients in instances that the government deems unnecessary.

   The government can them deem it unnecessary that you need hospitalization if the stent implanted in your heart artery fails, because, hey, you have already spent thousands of dollars during your first surgery.

   Another sample of the Commissioner’s perverse powers [PDF]:

   The [insurance company] cannot vary the percentage increase in the premium for a risk group of enrollees in specific grandfathered health insurance coverage without changing the premium for all enrollees in the same risk group at the same rate, as specified by the Commissioner.

   So, the Commissioner decides exactly what coverage you can get and how much you and all others will pay. Of course, there are many more points that I haven’t talked about.

   So much power in the hands of one man, or even a small group of men, is wrong and will inevitably lead to abuse and mismanagement.

2. Health care exchanges and the public option – as with any government-run system, the matter cannot be as simple as the bill makes it out to be. Bureaucracy and red tape will impede any free dissemination of information in such “exchanges.” The public option would inevitably be the only real “choice” available on the exchange.

   Of course, the biggest problem is that the government will decide what services insurance companies can and cannot provide. Competition will decline as the minimum mandated coverages and government pricing will simply cause all companies to match pricing with the government option.

   As a comparison, minimum wage has created a situation where no employer wants to pay anything more than the mandated minimum even for jobs that would otherwise deserve a higher pay simply because of the government mandate. Similarly, insurance companies would simply match government pricing even in cases where a lower pricing might be achievable, just because that’s the “government requirement.”There would be no incentives for insurance companies to compete.

3. Large employer coverage – companies offering none or skimpy insurance would face new fines and penalties; in other words, an awesome hidden tax on corporations.
   Moreover, companies will find loopholes to drop coverage to avoid any fees, forcing employees onto the public option.
4. Cuts in payments to doctors – we need more doctors, not fewer. Any payment cuts will reduce incentives for individuals to go into the medical field. Medical students spend hundreds of thousands of dollars for their education and lower salaries will not help the situation. The current bill does not take corrective measures to prevent such payment cuts.
5. End of charity care? Hospitals across the nation provide subsidized or even free care for patients unable to make payments. Now, they wouldn’t because the government would prevent them by forcing rate cuts and through other restrictions.
6. $150 billion cuts in payments to drug companies – while it is easy to say that companies need to cut costs by that amount, but where will the cash come from, eh?

   Drug companies will reduce spending on R&D leading to lesser cutting edge research and fewer newer drugs. Where’s the incentive for them to continue spending billions of dollars on drug development?

7. Penalties for the uninsured – if America is truly a land of freedom, why can’t I make the choice to remain uninsured, if I so decide? Why should the government decide for me what is good for me?

   Obviously, liberals and Democrats want us to march down the road of socialism where the government even decides how we sleep – not on the left side, you idiot, here’s a fine!

Now, there are some good features of the bill:

1. Pre-existing conditions and coverage during sickness – insurance companies will be prohibited from denying coverage to people with pre-existing conditions and from dropping coverage when a customers becomes sick.

   But, we could have introduced regulations pertaining to these specific matters and taken care of the issue.

2. Medicaid for a larger group - low-income Americans can take advantage of either medicaid program or government subsidies to obtain coverage.
3. Medicare gap and preventive care – the gap in coverage would be eliminated and seniors would no longer have to pay for preventive care. Both are good ideas, but will only increase costs for the government.

So, 7 against, 3 for. Not too bad, but not convincingly good either.

Moreover, 52% of the public remains opposed, with 42% strongly opposed, to the new health care bill, according to Rasmussen.

Hopefully, the bill will either die a painful death in the Senate or will be made a bit more acceptable before Obama signs it and creates another NHS.