Heart of the Matter

Obama's Health Care Plan

Barack Obama's major innovation in the great health care debate will be to provide a "marketplace" for people and businesses to buy health insurance.

The government will be a player in this marketplace, providing a standard for price and for services much like Medicare does now. This government plan will be competing with the BCBS and Harvard Pilgrim Health Cares of the world. It will be very similar to the "Commonwealth Cares" plan instituted by Governor Romney which enrolled nearly ¾ of the uninsured in the state at reasonable cost to both the government and individuals.

This plan will guarantee coverage to all comers and require the same from the competition thus eliminating one of the major flaws in the current system where, in most states insurers can cherry pick the healthy people and exclude the rest. This is clearly a major step forward. It is far and away an improvement over McCain's cynical plan but it still doesn't address the other major problem, that of cost excess in the system.

The AMA and the insurers would have you believe that there is fraud and abuse accounting for the majority of the excess expense of the American system and there is some of that, for sure. But this narrow view ignores the other two legs of this expensive stool: First, the ridiculous overhead of the private insurers, averaging 15-20% of premiums lead by their CEO's inflated salaries and, secondly, the positive feedback loops created in the system which rewards doctors for doing expensive procedures on one hand and scares them into doing more to avoid being sued on the other.

Obama's plan will approach the first and force the insurers to be more efficient and may lower the CEO benefits packet but it will do nothing to change a system where doctors are encouraged to avoid litigation and line their own pockets by doing more procedures and X-Ray studies.

As usual in this country, if something doesn't make sense the way it is, there is probably a lot of money preventing change. The AMA, the insurance industry and the attorneys all are powerful lobbyists. The Clintons found this out the hard way 15 years ago. The lobbyists will fight change in the system every step of the way.Obama may not think he can win those fights. We may have to settle for half a loaf and see health care reform as an evolutionary process. Obama at least provides us with a decent start in my opinion.