As many of you know, health care reform has been a cornerstone in my career since the 1980's. So, I spent the night reviewing H.R. 3962, aka the2009 Affordable Health Care for America Act. Here is my initial reaction, with more detail to follow in the days ahead. As I ploughed through the 1,990 pages I had mixed feelings. First, was my personal disappointment at Congress's decision to make cooperatives state run collectives. But, overall it was shock and awe at the over-reaching scope and impact of the bill on the American health system. As an integrated totality it is sure to irreversibly transform the industry in the decades to come.
My bias in the health care matter is that the health care market is a failed market, far from efficient due to a series of actions perpetrated or allowed by market players over the years. The insurance companies have treated health care as an extractives industry and the political establishment unknowingly perpetrated the market's demise in its existential quest to seize power by pandering to various constituencies. In my mind we should long ago have stopped doing what we were doing, have reversed course and began a decade long process of restoring the market through the 12 strategies I outlined in my book,
Health Care 2050. I do not believe that we as a nation can afford to have 1 out of 5 workers employed in high paying positions in health care, nor can we allow health care to consume 20% of our country's gross national product. It's unsustainable and will eventually push us past a tipping point. That having been said, there is another even more dark side to all of this.
Free market ideologues have failed to accept that you cannot allow a market to evolve organically, particularly when that market distributes services that are of a life and death matter. Organic markets are volatile and periodically suffer the natural equivalent of hurricanes and earthquakes. The insurance market long ago walked away from the elderly and the poor and government had to act. Then, the industry failed to move toward more disciplined payment schemes and costs exploded as cost shifting became pervasive. The insurance industry gorged on profits from life insurance and reinsurance products and let the individual and small group market overheat until political solutions were sought by those constituencies.
Employers used health care as a carrot-and-stick in their labor negotiations and never had the backbone to initiate meaningful reforms. The large employers and labor unions got what they wanted when ERISA was passed in 1974 and they let the small employers and individuals twist in the wind. They collaborated with the insurance companies on managed care and reinsurance and shifted costs onto their employees whenever they could. The resentment built and a political redress was predictable.
Consumers have enjoyed decades of being buffered from the reality of costs and have failed to take personal responsibility for their health care. They act like they are victims when fully 70% of disease is avoidable. The elderly who are supposed to be our greatest generation have failed to transcend their personal wants and needs and have been more than content to let others pay for an array of health care services that merely extend life a few weeks or months before the inevitability of death arrives.
The political establishment as a species behaves in a predictable way. They fill vacuums and seize opportunity. But they also act when others will not act. Their intervention is by nature messy, partisan and influenced by special interests. But, when market players with skin in the game fail to act morally and rationally, eventually, the political operatives will move in. Such is the case in health care.
Whether H.R. 3962 passes "as-is" is irrelevant. Something along these lines is going to pass because the Democrats have majorities in the Congress and a President who has staked his political career on the matter. So, I would predict that 80% or more of what is in this bill will become law.
The legislation about to be passed represents not only a defining moment for the health care system, but for our political economy as a whole. Health care is destined to be 20% of our economy and by far the largest sector. This Act puts a stake in the heart of a free market approach and moves health care towards a regulated, government controlled system. Whether it will morph into a single-payor system or remain some hybrid, it is a move towards the models of the social democratic countries of Europe.I leave it to you to outlines the distinctions without a difference.
We are now far enough along in this melodrama to predict how the play will end. Republicans, insurance companies and the wealthy are losers. The
"have-nots" will benefit at the expense of the
"haves". Whether that is social justice or moral is up to you to determine based on your values. But, health care is analogous to alcoholism. Some believe the alcoholic is a moral failure lacking in courage and will power. Others believe it is a sickness. Irrespective, the alcoholic seldom changes and is often willing to lose everything and has to hit rock bottom before any real change takes place. Even then recidivism rates are high and many substitute other addictions for alcohol. We as a society are addicted to this thing called health care. It is both our friend and our enemy at the same time. We cannot live without it and we can't stand to be in the same room with it. We have given up our personal power and handed it over to it all-the-while rationalizing. It is destined to be both our downfall and our salvation.
I assert that great events will determine where all this goes, not Nancy Pelosi, Harry Reid or Barack Obama. Health care is on a path from its early roots: the Barber Surgeon, the Civil War Amputator and the Country Doctor. Technology, pandemic, demographics, maybe even world events will be determinants. By the year 2040, the power of genetics, biomaterials, computerization and super drugs will reign supreme. The retirement of the baby-boomers and the tsunami of unfunded liabilities could easily render H.R. 3962 a house of cards or a sand castle.
I came of age in the 1960s and 1970s and, sometime in this period health care crossed a great divide, where everything was different after the crossing than before. We are now firmly in the 21st century; it is a time when all the rules are changing and where periodic cycles are giving way to irreversible transformations. It would be as if someone in 1890 invented a new kerosene lamp, ignoring Thomas Edison and the incandescent bulb. Within a short time, electricity, automobiles, air flight and war, famine and pestilence combined to transform the 20th century in ways my great grandfather could not have imagined.
Our founding fathers had a noble idea when the American Constitution was written. But, these Colonial Men of the Enlightenment would have struggled mightily, as do we, to deal with our modern world. It is though we are now riding Albert Einstein's beam of light and we are merely particles on a fiber optic roadway.
The massive nature of H.R. 3962 demonstrates that much work and thought was put into the matter. It is the culmination of 50 years of political economic thought by the Democrats. The Republicans who had similar power over the past 25 years could probably have fit their ideas on a 3×5 index card. Shere energy and political will have now trumped everything else in the matter. Whether this is our final destiny, or merely a punctuation point in a much bigger story is yet to be determined.
In closing, I feel comfortable in saying that I am glad I am not in the health insurance industry. I am also glad that I cultivated hobbies and other interests over my life to reduce the dominance health care reform once had over my life. That past turns out to have been merely prelude.
Oh, by the way, if any of you want the 1990 page pdf of the bill, I would be happy to email it to you.