Obama health care reform - breaking the bank!

We need to reform health care, but we need more focus on controlling costs.  I heard a saying many years ago that I've always remembered: "A smart man learns from his mistakes, but a real smart man learns from other people's mistakes." When it comes to health care reform Pres. Obama should do more to reduce the costs, learning from the spiraling costs of France's national health care and the results of Massachusetts health care reform in 2006.

An article in Friday's Wall Street Journal titled "France Fights Universal Care's High Cost" highlights the complexity of government-run health care. The following are excerpts from the article:

  • "The French system's fragile solvency shows how tough it is to provide universal health care coverage while controlling costs, the professed twin goals of President Barack Obama's proposed overhaul."
  • "The problem is that Assurance Maladie [the state health insurer] has been in the red since 1989. This year the annual shortfall is expected to reach $13.5 billion and $21.5 billion in 2010, or 10% of its budget."
  • Controlling costs would be even more difficult for the U.S. We spend 16% of our GDP on health care vs. only 11% in France and many of the freedoms we expect in the U.S. could be lost, according to a Fortune magazine article titled "5 Freedoms You'd Lose in Health Care Reform."  Americans won't give up those freedoms easily, making cost control even more challenging. 

The new Massachusetts health care reform, enacted in 2006, shows the difficulty in improving coverage while lowering costs. According to a Kaiser Family Foundation report titled "Massachusetts Health Care Reform: Two Years Later", the Governor's budget for Commonwealth Care called for an 85% increase in 2009 over 2008. It goes on to state that "Continued success will depend on controlling health care cost growth and holding together the coalition of stakeholders that came together around the broad tenets of health reform."

A recent poll of Massachusetts residents shows that an overwhelming majority consider their health care reform to be a failure in reducing costs and improving the quality of care. 

"Only 26 percent of likely voters in Massachusetts believe health care reform has been a success and just 21 percent believe reform has made health care more affordable, according to newly released poll results," The State House News Service/Boston Herald reports. "The Rasmussen Reports poll of 500 likely Massachusetts voters, taken in April, also found only 10 percent said the quality of health care is getting better under the reform law rules here."

If we can learn one thing from France and Massachusetts it's this - health care reform will be more expensive than we think. 

I'm the first one to stand up and cheer for reforms. Our own company's group health insurance premiums went up 19 percent for 2009 - and none of our employees reached their deductible in 2008, meaning the insurance company paid out very little!  Many Americans don't even have proper coverage - and we have a moral responsibility to make sure they have affordable coverage without walking into an emergency room. But legislators rarely show an ability or interest in reducing costs, even in emergencies like California's budget crisis today (in fact California's budget crisis is a direct result of poor cost control). Objective financial decisions are too often thrown out the window in the interest of political self-preservation.

Until we get health care costs under control, we can't fool ourselves into believing a government program will solve our health problems.  Even the Congressional Budget Office is blaming skyrocketing health costs on Medicare and Medicaid as the primary cause of our country's budget woes.  We need to move beyond the rhetoric and emotion about protecting our own interests.  Instead, Pres. Obama must speak as clearly about specific cost-cutting measures as he does when touting his proposal's benefits.  Until we do that, we're headed down the same budget path as Medicare and Medicaid.