Why Is Healthcare Reform So Difficult David Davenport

Why Is Healthcare Reform So Difficult? David Davenport Crystal Serenity February, 2011

Washington, D. C.

The Difficulty

Heated Rhetoric, Complex Issues 51 Million Uninsured? – About 11 million are noncitizens – About 16 million adults eligible but not insured – About 7 million kids eligible but not insured – Another 9 million have incomes over $66 k So real number closer to 16 million

Heated Rhetoric, Complex Issues WHO says US life expectancy #42 in world? --Remove homicides --Remove traffic fatalities We’re Number One

The Difficulty

The Science & Technology Are Rapidly Changing

Economics Are Becoming Unsustainable

2008 John F. Cogan Hoover Institution 1/10/09

But Costs Difficult to Manage • #1 cost driver is technology and improved healthcare • There is also waste, perhaps as high as 20 -25% but difficult to squeeze out

Waste To Be Eliminated • 3 rd party payor problems (moral hazard) – $5 of every $6 paid by “someone else” • Regulatory cost • Malpractice, lawsuits • Tax policy drives employer plans

Different Political Philosophies

The Equality vs. Liberty Narratives From the French Revolution: Liberte, egalite et fraternite From the American Revolution: life, liberty and the pursuit of happiness

The Liberty Narrative • Equality of opportunity • Limited role of government • Individual freedom and choice

The Equality Narrative • Equality of outcomes • Government oversight • Limits on free markets and individual freedom to institutionalize equality

Healthcare Reform in the 60’s

Healthcare Reform in the 90’s

Health Care Reform in 2010

What Would Happen In “Ordinary” Times? • American people don’t generally support major overhauls • With 15% uninsured and 80% + happy with their healthcare, felt need for overhaul isn’t widespread • So work on individual pieces of problem

But These Were Not “Ordinary” Times • President Obama wanted to spend his political capital on this • Both Congress and Senate were in his party • Tough economic times create greater support for more safety net

Obamacare: Will It Survive? • Repeal highly unlikely • But Congress may alter it in other ways • Constitutional challenges are real • Public is ambivalent

Repeal and Replace For individuals • National market, portability • Preexisting conditions • Tax relief and subsidies for uninsured

Individual Fixes for System • National market • Information/accountability for choices • Change tax incentives • Reform medical malpractice laws

Why Is Healthcare Reform So Difficult?