Wednesday, October 15, 2008

Kiss Healthcare Reform Good-Bye

I think we can safely kiss healthcare reform good-bye. We can thank the financial meltdown for this. With the most storied and large financial institutions like Lehman Brothers and Merrill Lynch folding as banks like Washington Mutual and Wachovia seek suitors like JP Morgan and Wells Fargo to bail them out, our economy has grinded to a halt. Banks don't want to lend money to businesses or consumers, even those with good credit, because they fear the borrowers won't return their money.

Homeowners have burned many banks by being unable to pay their adjustable rate mortgages and walking away from homes which are now worth far less than the loan amount. Certainly many of these homeowners were fooled into thinking they could purchase more than they could afford. Despite who was responsible for the mess, the reality is no one will lend money out which drives the economy.

To foster more lending and hopefully to improve trust between lenders and borrowers, Federal Reserve chairman Ben Bernake and Treasury Secretary Henry Paulson convinced Congress to give them authority to invest $700 to $800 billion to simulate the economy. The federal budget which ended September 30th resulted in a deficit of nearly $500 billion. Next year because of the action taken by the Treasury, the deficit will be far larger. With a predicted price tag of nearly $65 billion to implement Senator Obama's healthcare reform plan (note Senator McCain has not indicated the costs of his plan), it is highly unlikely that even with a presumably Democratic Congress that elected officials will agree to spend even more money despite the healthcare crisis.

The even bigger issue beyond reforming a poor performing healthcare system is what to do about the looming crisis in Medicare . With the first of baby boomers entering Medicare, benefit programs like Social Security and Medicare will dominate the federal budget. Both are underfunded with Medicare being worse of the two. Neither political party, Democratic or Republican, has dared attempted to make the gutsy and necessary changes to make these programs solvent.

What can you expect? Higher healthcare costs, more uninsured, and a general decline in the nation's health. A couple retiring this year must have about $300,000 available for future healthcare costs. With a stock market in freefall, it is clear people have less available than before. As a result they may unfortunately skimp on necessary preventive care and treatments. While decreasing their costs in the short-term, these choices will cause more expensive complicated problems down the road. The country will pay a price for this with a less healthy workforce or populace with increasing diability. In addition, individuals will discover what many have already which is the leading cause of personal bankruptcy is due to medical costs.

What can you do? Educate yourself. Find out how what medications are worth your money, what screening tests you must have, what you must do to stay healthy and well, and when to seek care and utilize the healthcare system. Our government doesn't have the financial resources or the leadership needed to truly overhaul our convoluted, frustrating, and fragmented healthcare system. This is one situation where only the informed and educated individual can make the difference between getting so-so care, which is the current state of affairs, and getting the right care which is what everyone deserves but increasingly will be unable to get.

1 comment:

Anonymous said...

The sad thing is that there are some really smart people out there who know what needs to be done about health care, but nobody is listening. Congress has completely politicized the issue. They ask "Will voters like this change?" rather than "Will this change improve access/quality or will it lower costs?" Given the motivations of Congress, they need a way to pass the reform task on to a non-partisan commission of health care professionals and system analysts who would draft something for an up-or-down vote.
Remember the military base closing commisssion?


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