Opinion Column

The Health Reform Bills Would Be Great For the Business Of Health Care

Have you noticed how none of the big health care business special interests is running any negative health care reform ads? Why should they when each is poised to gain billions of dollars from it?

As President Barack Obama has said many times, any health care bill that costs about $1 trillion would be paid for, roughly half and half, with savings in the health care system and new revenues (taxes).

All told, health care providers will likely get hit by $500 billion in federal payment reductions over 10 years from what they would have received otherwise. This is their “savings” contribution to help pay for the overhaul effort. It amounts to no more than a couple of percentage points less than they would have received anyway.

But more importantly, the Congress is getting ready to spend $1 trillion over the same 10 years mostly to expand Medicaid and provide subsidies to the uninsured to help them purchase private health insurance and be able to pay their medical bills. The health industry, by giving up $500 billion, gets millions more patients armed with public and private health insurance cards. Not a bad deal-particularly when the other $500 billion needed to finance the bill comes from new levies on taxpayers, not bigger industry cuts.

The details show an even prettier picture for the business of health care.

The American Medical Association came out in favor of the House Democratic health care bill when the House Democratic leadership promised the doctors $230 billion in new spending to cancel out any future Medicare physician cuts (which are scheduled under an existing law called the Medicare Sustainable Growth Rate Formula). As a result, the doctors don’t have to give up anything under the health bills, and would actually pick up $230 billion under the House bill over 10 years.

The pharmaceutical manufacturers also cut themselves a deal with the Senate Finance Committee and the White House. They limited their contribution to health care reform to only $80 billion over 10 years. But in return, they got a commitment that their cuts would not be deeper, and maybe more importantly, that their drug patents for cutting-edge biologic drugs would be guaranteed 12 years of exclusivity.  They are so happy they are getting ready to spend tens of millions of dollars in advocacy advertising in favor of health care reform. One Associated Press report says they will spend at least $150 million.

The hospitals also cut a similar deal. They limited their losses to $155 billion over 10 years-a spot they appear more than happy with. Heard any hospital executives complaining about health care reform lately?

Bear in mind that at current trends we are on track to spend almost $40 trillion on health care in the United States over these same 10 years. Those hospital and drug company voluntary cuts are chicken feed. The doctors are not even being cut.

Then there is the intriguing story of the insurance industry. No negative anti-reform “Harry and Louise” ads from them this time. Why? They know the public option health plan designed to compete with them is all but politically dead out of legitimate fears the government would end up dominating the market. Why call attention to yourself when all those folks at the town hall meetings and cable TV are doing the job for you?

The insurance companies are pretty sure they will have to give up about $150 billion in “extra” private Medicare payments-but that might not even happen at the rate things are going for the Democrats.

Assuming the public option is going to be sacrificed by the president and Democratic leaders to get a health care bill, that leaves legislation that would mandate (through an individual mandate and maybe some type of employer requirement)  that millions of Americans buy insurance. Even better, those people would be getting subsidies that would cost the federal government as much as the $700 billion so they could afford to buy those new health insurance plans-billions of dollars that would get passed on to hospitals, doctors, drug companies and all the rest.

From the looks of these health care bills, this “health care reform” thing will be great for business!

But as far as “bending the curve” and beginning to make our health care system any more affordable or sustainable-or any less of a burden on patients and taxpayers-I can’t find it.

If that were the case, we’d be seeing lots of negative ads.

All we are getting is lots of negative pubic reaction because people smell something is not quite right.