Robin Hood and the health insurance crisis

October 22, 2007
Surgical Rounds®, October 2007, Volume 0, Issue 0

Bernard M. Jaffe, Professor of Surgery, Department of Surgery, Tulane University School of Medicine, New Orleans, LA

Bernard M. Jaffe, MD

Professor of Surgery

Department of Surgery

Tulane University

School of Medicine

New Orleans, LA

Robin Hood

Robin Hood

I recognize that Barack Obama is a presidential candidate (at least as of June 2007) and a Democrat. Nonetheless, I was quite disturbed—and you should be, too—to read that the Illinois senator is proposing a "plan to provide health care to millions of Americans and more affordable medical insurance financed by tax increases on the wealthy."1 I don't mean to knock Mr. Obama; he is far from the worst among the presidential hopefuls. It is his plan that concerns me. The proposal sounds like all over again: steal from the rich, and give it to the poor. I would like to remind you that was an outlaw, whereas Senator Obama hopes to become President of the United States.

There is no question that in our country, there is a gross disparity in access to health care. It is unacceptable that 47,000,000 of our citizens have no health insurance.2 The supposition has always been that the have-nots are in that position purely because of their financial status, but that is not entirely correct. I have several friends and neighbors, particularly those who own small businesses, who can afford to pay the premiums but opt out of the system. Despite a number of serious discussions, I have failed to convince them of the foolishness of their thinking. In my practice, I have cared for many patients who preferred to pay cash and could afford to do so. I am sure you have had similar experiences. The aggregate of these individuals do not constitute a majority of the uninsured, but I assure you that they make up a substantial number. There are still many Americans who do not trust insurance companies and are convinced the insurance companies do not fulfill their financial responsibilities by paying bills appropriately. There is good justification for this position; just talk to the many citizens of New Orleans who were denied reimbursement for Katrina damage for "apocryphal" reasons.

Despite the potential disadvantages of health insurance, I think all of us would agree that it is still the best option currently available to finance medical care. Assuming our country is ready to take the long-overdue leap to universal access to medical insurance, the next question has to be "How much will this venture cost?" Senator Obama omitted that information from the speech announcing his plan, but his campaign organization distributed a report compiled by three unnamed outside experts who set the price tag at $50 to $65 billion per year, once the plan becomes operational.3 However, this figure was the estimated amount to be spent after "improved efficiency and other federal savings."1 While the details were not spelled out, they are easy to calculate. "Improved efficiency" likely refers to lower physician reimbursement. After all, in the eyes of a bureaucrat, where else can money be saved? Anyway, "federal savings" is an oxymoron. When was the last time the feds saved money? You tell me.

Another component of the Obama plan is increasing spending to boost technology, such as investing in electronic recordkeeping. Electronic data management is a great idea but hardly an innovation. If Senator Obama is interested in each American having a centralized health record, his plan will run afoul of the esteemed HIPAA regulations, the most recent legislative medical breakthrough. With all the publicized concerns about invasion of privacy, is it realistic to believe that America's citizens trust their medical information to be compiled in a single electronic record that multiple physicians can access? I do not think so.

If experts assess the costs of the plan at $50 to $65 billion, expect cost overruns and double that estimate, at a minimum. Can the United States afford $100 to $130 billion per year? I assume so, particularly once the war in Iraq is over. But those of us living in New Orleans are very sensitive about federal spending on social welfare. Louisiana is still waiting for the promised funding for renovation, levee protection, and damage control.

Robin Hood

Senator Obama plans to finance his health program by terminating the recent tax cuts on capital gains and dividends and increasing the income tax assessments for individuals earning $250,000 or more. Does this sound familiar? Doesn't it evoke the spirit of ? Please note that we physicians will almost surely take a double hit with this plan, with reduced reimbursements and increased taxation.

For an issue as critical as universal access to health insurance, we need to do better than to institute a trite, nonfunctional, and punitive program. I am not one of Senator Obama's "outside experts"1 or consultants, but it did not take me long to come up with some relevant current funds that could be diverted:

  • Revoke funding of the HIPAA program. Based on my discussions of HIPAA in this editorial and others, I am sure my opinion of it must be pretty clear.
  • Develop a nationwide, unified, and simple credentialing program with lasting computer memory. I do not know about you, but I am tired of submitting copies of my medical school diploma, board certificate, and other documents when all these could be registered once and maintained in an electronic file. And yes, we might even contemplate stretching the hospital credentialing process to once every 3 or 4 years. What a novel, cost-saving idea!
  • Streamline the quality management program to emphasize corrective actions over punitive ones, which would markedly curtail the paper chase. The same should be done for documenting compliance with work-hour regulations, a nonproductive and expensive activity.
  • Cap the outrageous salaries of CEOs of insurance companies, health maintenance organizations, and, in many cases, hospitals. It is inappropriate to permit these managers to earn enormous incomes at a time when we are squeezing the health care dollar. One could justify an argument to similarly cap physicians' earnings, although it is a much smaller issue, since very few physicians have incomes in the upper seven digits.

The private sector has to play a major role in the process of developing universal health insurance. A major problem for industry is that its share of health insurance premiums keeps rising, constituting a critical expense. Too many small businesses fail to provide insurance benefits for their employees, accurately claiming that the available products are too expensive. This has to stop. All full-time employees need to be offered health insurance as a cost of doing business. To make it possible, premium prices need to be reigned in. You can predict that the insurers would cry foul should government and industry pressure them to lower their costs, but they need to share the burden. Anyway, they stand to benefit from the 47,000,000 additional insured customers this program would bring them.

Robin Hood

Given a little more time and space for this editorial, I could come up with additional solutions, and I'll bet you can, too. I would be much more comfortable about the Obama plan if it was not centered on the principle. The United States really does need universal access to health insurance, which should include offering subsidies to people who simply cannot (not those who do not work to) afford the premiums. Our responsibility is to find the best, fairest, and least contentious means to make this a reality.

References

  1. Glover M. Obama floats plan to add millions to health care roll. The New Orleans Times-Picayune. May 30, 2007, A4.
  2. US Bureau of the Census. Income, Poverty, and Health Insurance Coverage in the United States: 2006. Washington, DC: US Bureau of the Census; 2006.
  3. Obama B. Background questions and answers on health care plan. Barack Obama's Plan for a Healthy America, 2007. Available at: www.barackobama.com/issues/healthcare. Accessed September 11, 2007.