• Time to Remove Profit from Health Care Finance?
  • April 16, 2009
  • Law Firm: Holland & Hart LLP - Denver Office
  • The recent controversy of former Washington Post Reporter T.R. Reid’s abrupt exit and excise from Nightline’s “Sick Around America” program that ran on March 31, 2009, underscores a growing debate in the U.S. as to whether President Obama’s healthcare reform proposals are, in the words of Mr. Reid, “tinkering around the edges” of the problem, or whether core health care reform will be addressed.

    Mr. Reid was the host and principal commentator on the 2008 documentary, “ Sick Around the World,” where he took a look at the healthcare systems in Japan, Germany, Switzerland, Taiwan and the U.K. as potential models for U.S. health care reform. Mr. Reid notes that no other industrialized country has a profit mechanism built into the finance of basic health care coverage.  Many other countries mandate universal coverage, but provide either a single payor, Medicare like system, or payment by regulated, non profit enterprises. Mr. Reid apparently objected to the Nightline slant of the Healthcare in America program to include a substantial focus on the views of the American Health Insurance Plans (“AHIP”) and its president, Karen Ignagni.

    Ms. Ignagni testified before Congress on March 24 and appears in a USA Today pod cast interview that date where she insists that AHIP was able to substantially reduce cost in the system in the past, but that the “discussion” shifted to “choice.”  She insists that her members are back on track leading “stakeholders” on a collective mission to reduce costs such as the huge growth in scanning costs.  She says the major failure of the current system is the lack of inclusion of all citizens in the system leading to undue criticality expenses because of the delay in treatment and the cost shifting to private plans caused by the failure of Medicare to pay its fair share of the cost.

    Mr. Reid has a new book to be published in August entitled “Healing of America: - A global Quest for Better, Cheaper Health Care.” (Penguin Press, August, 2009). Although he did not focus on France, Reid believes that it has best healthcare system with only a 3 percent administrative cost compared to 25 percent in the United States. He also notes a number of countries like Japan and German beat down health care providers on price, although there is no shortage of doctors there because of the cultural, if not financial,  esteem in which they are held. He says that although there is a perception that medicine in Europe and Asia is socialized, the view is misleading because many of those systems have private systems of healthcare providers, even though the funding mechanism is universally public.

    One of the core issues that would seem to need to be addressed in the effort at health care reform would be, what is a reasonable administrative cost allocable for a health care system and should a profit motive that may encourage potential conflicts of interest be part of it?  Does the profit motive provide us with sufficient  performance value to justify its inclusion?  Is this issue just too big a political bone to swallow?  Can we have real reform with out looking at all the tough issues?  If we are not just tinkering, doesn’t somebody need to take a hard look at this issue?