Health Care and the New Obama Landscape

November 5th, 2008, marked an historic day in American history when an African-American was voted in as the next president of the United States. Barack Obama will serve as the 44th President after his inauguration in January, 2009. With a majority of the electoral and popular vote in his favor, Mr. Obama is setting American politics on its ear--right or wrong. The country has indeed seen that anyone can be President. Now, the clock starts ticking toward January when the president-elect will take the oath of office and take command of the executive branch of our government. According to the International Herald Tribune, good will represents a formidable asset - so long as it lasts. But history suggests this fortunate phase for Obama will prove temporary. Before the age of polarization, Americans often swung behind new presidents in overwhelming numbers. Dwight Eisenhower, John F. Kennedy and Jimmy Carter also received approval ratings comparable to Obama's in their first weeks in office.

According to the Flathead Beacon, the recession is changing the dynamics of health care at a time when the Obama administration is pushing heavily for sweeping health care reform and lawmakers at the state level are voicing their concerns as well. Both the health care providers and general population are feeling the pinch. The number of people without insurance rises with every job lost. The same concerns are associated with dental care and every other facet of the health care industry. Health care providers are bracing for a year of “belt-tightening” with the expectation that the number of people being cared for but who are unable to pay their bills will remain high, or increase. When a hospital doesn’t receive reimbursement for care, it absorbs the costs as “bad debt” or charity care expenses.

Health care is the largest industry – and one of the fastest-growing – in the United States, employing more than 14 million people and providing seven of the 20 fastest-growing occupations nationwide, according to the U.S. Bureau of Labor Statistics. As the health care industry continues to grow, according to the Flathead Beacon, so do concerns over costs and insurance. Nationwide, 15% of the population doesn’t have health insurance. The past year’s economic woes have tempered the good feelings associated with the increase of people with insurance. It’s too early to tell what effect Barack Obama’s presidential administration will have on the health care industry, but hospital officials are keeping close tabs on the president’s claims to make health care reform a foremost priority. However, there’s tremendous momentum behind some kind of comprehensive health care reform.

According to McDermott, Will & Emery (MWE), President-Elect Obama’s health care pronouncements to date indicate a desire to work toward universal coverage, with the federal government occupying an important, but not exclusive, role. The plan enunciated by the Obama campaign embodies the “play or pay” concept, which would require large employers that do not offer or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payroll toward the costs of a national insurance plan. The plan also called for expanded eligibility for Medicaid and the State's Children's Health Insurance Program (SCHIP). And, for those who do not have employer-provided health care and who do not qualify for existing federal programs, a new national health insurance program would be created. Individuals could choose between the new public insurance program and private insurance plans that meet certain coverage standards. While President-Elect Obama has not called for mandated individual coverage, he has called for mandatory health insurance coverage for all children. President-Elect Obama has also called for spurring increased adoption of health information technology and establishment of a comparative effectiveness institute that would review the relative effectiveness of different interventions.

Earlier in 2008, the worsening economic outlook prompted many who desire health reform to wonder where the money would be found to pay for it as reported by MWE. (Current budget rules, PAYGO or pay as you go, require that any new spending be offset.) Interestingly, this dialogue is now undergoing a subtle shift. Some lawmakers have indicated that the investment in health reform is so important that it should happen regardless of whether or not it is paid for in the early years. Further, an increasing number of policymakers are describing health reform as a key “jobs-creation” measure that is a vital component of any economic recovery effort. Nonetheless, key factors affecting any domestic spending, including spending on health legislation, include the burgeoning budget deficit, the $700 billion cost of the recent financial rescue package, and the ongoing wars in Iraq and Afghanistan. In addition, if the Democrats fail to gain a filibuster-proof majority in the Senate, Republicans will be able to use the filibuster to affect and to thwart legislation, including health legislation.

MWE also reports that the first health policy focus in the new year will likely be on already identified and targeted health initiatives. Some are time-sensitive measures while others are front-and-center concerns. Health industry stakeholders immediately have opportunities to weigh in on these initiatives and either affect their shape or capitalize on them as vehicles for accomplishing other health-related goals apart from the specific focus of the legislation. In addition, understanding the health legislative and regulatory landscape remains a critical element of sound legal and business strategy and decision-making. Time-sensitive measures include changes in the SCHIP program along with Medicaid and Medicare payment reductions. Other pressing health priorities include health information technology, follow-on biologics and re-tooling of the Medicare physician drug benefit.

McDermott, Will & Emery also report that additional areas ripe for possible early action in 2009 include drug importation, embryonic stem cell research and tobacco regulation. President-Elect Obama has indicated that the importation of prescription drugs from other countries should be allowed provided safety is assured. He has also expressed support for government negotiation of drug prices, reversing the ban on federal funding of research using embryonic stem cells, and giving the FDA authority to regulate the manufacturing, marketing and sale of tobacco products.
Clearly, health issues will be center stage on the congressional and administration agenda in 2009. Players in the health sector should carefully evaluate their desired level of involvement in the upcoming swirl of health legislative activity.

But before long, if unemployment climbs as predicted to 8% or 9% next year, the worsening economic crisis will deepen the health insurance crisis according to AlterNet. And the combination of job losses and the loss of insurance that is inevitably connected to them is likely to be an awful lot like the crisis of the early 1990s -- the last time the political system tried to fix the confused, costly and crumbling health insurance system. Costs are driven inexorably higher by continual advances in care as well as an aging population that needs more of it. Employers can't cope unless they scale back coverage, shift costs to workers or eliminate benefits altogether. States have become insurers of last resort -- but right now they face crippling budget shortfalls that threaten this safety net. Tightening regulation of the insurance industry and creating a new, government-based plan to make coverage available to those who cannot afford to buy it from private insurers -- the essence of Obama's campaign proposal -- would only add another layer of complexity and, eventually, cost.

Government at the state and federal levels, insurance companies, the medical community, and the public must work together to improve the current status of the American health care system--but not ruin it. We need to improve how health care and insurance works. Yes, there are issues that need addressed to update our health care system. However, health care is alot like a finely tuned automobile. When all the fluids are full, the gas tank is full, and the tires are correctly pressured, it works great even on bumpy roads. When you blow a gasket, the car stalls out and stops. If the government wants coverage to be effective, it does not need to tell patients what repair shops to us and what mechanics to see. That should be left up to each American to decide. Each individual has the right to choose his own plan, his own insurance, and his own medical provider. Even President Obama knows that the United States was built on the concept of individual liberty. He doesn't have the right to take it away. A government controlled universal payor system would turn us into Canada or the U.K., and the stories related to government run health care mis-management in those countries make everyone shudder. Americans do not deserve a nationalized health care system, but they do deserve quality of care and a way to effectively control costs. Let's research those ideals and not ways to wreck the car.

Until next time. Let me know what you think.