1. The current healthcare bill in its overall objective is very similar to the Massachusetts plan and effort.
2. In Massachusetts, the government passed a bill addressing the great question of how to provide universal coverage. It made a clear and honest determination at that point that it would assess more fully how to pay for it over the next several years.
3. The U.S. bill does a very similar thing. It greatly increases coverage while at the same time substantially adding to costs. The most recent CBO estimate (See: CBO's initial cost analysis (pdf)) shows the Senate bill with the House's changes costing $940 billion over 10 years. However, the CBO estimates the bill will reduce the federal deficit by $138 billion, which is likely to give Democrats even more momentum toward passing legislation. The bill, according to its supporters, will cover its costs with various tax increases, (see "How Does it Cost $940 Billion – and Cut Deficit?" in the Wall Street Journal.). However, Republicans and others worry that measures to pay for the bill may not be adequate to cover the cost in the long run. House Republican Leader John Boehner (R-Ohio) has critically denounced the bill and its costs. "They can tweak this thing and tweak it," he was quoted saying in a Business Week report. "Still, it's a trillion dollars they are going to spend."
The bill includes what many are calling accounting gimmicks to keep the costs low (See "3 Observations on the Current State of Healthcare Reform" in Becker's Hospital Review). The ability of the bill to actually reduce the deficit $138 billion assumes Congress will not change any provisions, including scheduled Medicare payment cuts, after the bill is passed. This is thought by many to be unlikely.
4. A great difference between the U.S. approach and the Massachusetts approach is the lack of clarity on one key point. In Massachusetts, it was acknowledged that they were solving one problem and would have to sooner or later address the cost issue. Here, the United States is not acknowledging that this is essentially an intermediate step to a much larger reform or tax effort.
5. As an intermediate step, this will greatly disrupt healthcare. The real assessment of winners and losers will occur as it is occurring in Massachusetts when the government in a few years must take action to pay for the bill — capitate care, contract with more providers, move to a public plan, raise taxes or reduce reimbursement.
6. The United States has made promises to various segments of the industry, hospitals and big pharma pledging protection in reimbursement in exchange for support of the program (See: "In New Health Care Package, Drug Makers to Pay More" in the New York Times). The United States has also promised limited tax increases.
7. As the bill starts to come due for the healthcare reform efforts and the increased government coverage of people, a second and more draconian healthcare effort will need to be undertaken. Either reimbursement will need to be cut dramatically or taxes will need to rise substantially. By doing the bill in the manner it is being done, the president and his team artfully and arguably disingenuously put off the really hard choices that need to be made. In essence, they make a promise that the country will provide services to another 32 million people and say it won't impact providers or tax payers too much when they clearly know another day of reckoning will need to come.
8. It appears the Obama administration is stealing two big ideas from Wall Street. There is the concept that one can do a huge expensive gamble or deal because when the real bill comes due, the old Wall Street adage, "I'll be gone, you will be gone" will apply. The second concept is that they will develop a program that is "too big to fail."
9. Given that U.S. debt is at risk of being downgraded from AAA which would be catastrophic, the passage of this bill strikes one as a dangerous gamble (See: "Moody's Says U.S. Debt Could Test Triple-A Rating" in the New York Times).
2. In Massachusetts, the government passed a bill addressing the great question of how to provide universal coverage. It made a clear and honest determination at that point that it would assess more fully how to pay for it over the next several years.
3. The U.S. bill does a very similar thing. It greatly increases coverage while at the same time substantially adding to costs. The most recent CBO estimate (See: CBO's initial cost analysis (pdf)) shows the Senate bill with the House's changes costing $940 billion over 10 years. However, the CBO estimates the bill will reduce the federal deficit by $138 billion, which is likely to give Democrats even more momentum toward passing legislation. The bill, according to its supporters, will cover its costs with various tax increases, (see "How Does it Cost $940 Billion – and Cut Deficit?" in the Wall Street Journal.). However, Republicans and others worry that measures to pay for the bill may not be adequate to cover the cost in the long run. House Republican Leader John Boehner (R-Ohio) has critically denounced the bill and its costs. "They can tweak this thing and tweak it," he was quoted saying in a Business Week report. "Still, it's a trillion dollars they are going to spend."
The bill includes what many are calling accounting gimmicks to keep the costs low (See "3 Observations on the Current State of Healthcare Reform" in Becker's Hospital Review). The ability of the bill to actually reduce the deficit $138 billion assumes Congress will not change any provisions, including scheduled Medicare payment cuts, after the bill is passed. This is thought by many to be unlikely.
4. A great difference between the U.S. approach and the Massachusetts approach is the lack of clarity on one key point. In Massachusetts, it was acknowledged that they were solving one problem and would have to sooner or later address the cost issue. Here, the United States is not acknowledging that this is essentially an intermediate step to a much larger reform or tax effort.
5. As an intermediate step, this will greatly disrupt healthcare. The real assessment of winners and losers will occur as it is occurring in Massachusetts when the government in a few years must take action to pay for the bill — capitate care, contract with more providers, move to a public plan, raise taxes or reduce reimbursement.
6. The United States has made promises to various segments of the industry, hospitals and big pharma pledging protection in reimbursement in exchange for support of the program (See: "In New Health Care Package, Drug Makers to Pay More" in the New York Times). The United States has also promised limited tax increases.
7. As the bill starts to come due for the healthcare reform efforts and the increased government coverage of people, a second and more draconian healthcare effort will need to be undertaken. Either reimbursement will need to be cut dramatically or taxes will need to rise substantially. By doing the bill in the manner it is being done, the president and his team artfully and arguably disingenuously put off the really hard choices that need to be made. In essence, they make a promise that the country will provide services to another 32 million people and say it won't impact providers or tax payers too much when they clearly know another day of reckoning will need to come.
8. It appears the Obama administration is stealing two big ideas from Wall Street. There is the concept that one can do a huge expensive gamble or deal because when the real bill comes due, the old Wall Street adage, "I'll be gone, you will be gone" will apply. The second concept is that they will develop a program that is "too big to fail."
9. Given that U.S. debt is at risk of being downgraded from AAA which would be catastrophic, the passage of this bill strikes one as a dangerous gamble (See: "Moody's Says U.S. Debt Could Test Triple-A Rating" in the New York Times).