Sunday, February 21, 2010

Healthcare Reform: What’s Next?

I’m finding the current spate of political infighting over U.S. healthcare reform to be probably the most fascinating that I’ve ever seen. What’s more, I think that we could see fundamental changes in this country unlike any before in our history. Here’s way.

First, healthcare costs are spiraling out of control. I’m not sure why. I know that my primary care physician knows that he’s not profiting. A very competent professional in his early fifties, he claims to be making only 60% of what he expected to when he graduated from medical school. He blames rapacious health insurers. Recent health insurance increases ( ) by some providers were justified because of healthcare costs, such as excessive testing by physicians, were rising. Some providers said that the loss of premium paying customers because of tough economic times caused them to raise the rates of their remaining ones. That kind of beggar thy neighbor (or, customers in this case) never works long term. Interestingly, on last evening’s news, one provider told a correspondent that they were running at a loss and angry about being lumped by a critical President Obama in with firms earning record profits and still increasing rates. My ignorance in this matter doesn’t bother me, I’m obviously in good company. What does bother me is the complete lack of any understanding by anyone as to what the root cause of the problem is. The resources that are consumed here won’t be available to reinvest in the economy.

Next, the growing U.S. national debt is going to limit the government’s options in addressing the problem. Check out the U.S. Debt Clock ( ) to see some really scary numbers. A Federal government unable to afford any sort of healthcare reform, even smaller, affordable, initiatives may find itself thrown back on policy reforms only, or, even marginalized. Worse case, the U.S. standard of living could begin an irreversible decline for the first time in history.

Finally, the coming conflict between free enterprise and the public welfare as represented by a national healthcare policy. With limited resource available, the public will begin to resent for profit organizations (i.e., businesses) taking away monies which could have been used to provide healthcare services. Big Pharma will eventually have to explain why when they use volume purchasing to drive down suppliers’ profits, it’s capitalism, but, when the government tries to do it with prescription medicines it’s socialism.

So, there’s a lot going on here. Unfortunately, no silver bullet exists for this situation. I don’t believe that this is just a simple government funding debate going on here like we’re seen before. We may be seeing some fundamental changes to the American way of life coming out of this. And, the healthcare industry is going to have to figure out how to deal with this.

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Contributed by Guy de Lastin

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