Obama’s Health Care Plan

I just reviewed an article written by Michael Ragain, M.D. on American Thinker called Obama’s Health Care Plan. Even though my day job is working for a Fortune 50 health care company, I certainly do not propose that I understand anything at all about the system or how it works. I do see – on a daily basis – many reasons why the health care insurance costs are rising; it’s called government regulation.

These regulations do not help one bit. If the government mandates something be covered, guess what? The premiums will rise. You see, the doctors that provide services to patients that come into the office require that someone pays the bill.

Let’s take a quick look at Obama’s plan, from his Web site [PDF, 85kb].

Under the Obama plan, the typical family will save up to $2,500 every year through:

  • Health IT investment, which will reduce unnecessary spending in the system that results from preventable errors and inefficient paper billing systems;
  • Improving prevention and management of chronic conditions;
  • Increasing insurance industry competition and reducing underwriting costs and profits, which will reduce insurance overhead;
  • Providing reinsurance for catastrophic coverage, which will reduce insurance premiums; and
  • Making health insurance universal, which will reduce spending on uncompensated care.

A typical family saving $2,500 per year is a big deal. I’m not part of what you’d call a typical family but I’d take a $1,000 savings. Sound good to me; what’s the catch?

Obama’s first point on spending IT investment dollars to save money does not fly in my book. Health care companies are already spending millions and millions on IT investments because it makes sense. So since we’re already doing that to keep costs from escalating higher, it’s not going to save cash.

He proposes that the government spend ten billion in IT investment over five years. And where is that money going to come from?

On to the second point, health care companies are already doing the prevention and management thing. We’ve got HealthAtoZ.com, WebMD and more. Plus insurers have been doing health and wellness pushes for years. Many insurance programs – including plans that have a Health Savings Account component – include yearly physicals, OBGYN checkups and mammograms; with no payments or co-payments.

Third, he wants to simply reduce the amount of money that insurance companies make and demand that they pay a certain amount of the premiums collected towards claims. How would your company react if the government coerced them to make only a certain amount of money? I can hear the investors running away from the health care stocks in droves. Certainly won’t leave a lot of cash around for IT development or health and wellness programs.

I don’t pretend to be able to quickly grasp his last two points, but where is the money going to come from? Who will pay the bill to provide universal coverage?

When it comes to reduced premiums, can anyone provide me an example of one industry regulated or run by the government where costs have dropped?

Cable TV? Nope. Land-line phone service? Nope. Electricity? Nope. Natural gas? Nope. Education? Nope.

Not a very good track record. When it comes to who’s going to run upwards of 20 percent of the GDP of this great nation, I think avoiding government intervention is a good idea. Make sure you read the full article on American Thinker.

Posted in

Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.

The website's content and articles were migrated to a new framework in October 2023. You may see [shortcodes in brackets] that do not make any sense. Please ignore that stuff. We may fix it at some point, but we do not have the time now.

You'll also note comments migrated over may have misplaced question marks and missing spaces. All comments were migrated, but trackbacks may not show.

The site is not broken.