The people have spoken it seems as Democrats lost a key Senate seat occupied for nearly 50 years to Republican Scott Brown.  The irony of course is that Massachusetts  is a progressive state taking the lead in health care reform.  The state has had mix success with reform.  According to a article the the real danger of reform is that regulators keep adding mandates and reforms that adds to the costs.

Small businesses are struggling in this uncertain economy and are fearful of regulators.  NYS has already added a sales tax in Summer of 2009 and almost passed a second surcharge in the Fall.  The real concerns are  costs and the Health Care Reform Bill barely touches 1.5%/year savings over 10 years,

Flaws in the Reform Bill are that people can choose to go uninsured and come back on when they’re sick without a pre-existing condition waiting period.  This adds to the cost as someone could defray costs by not paying into the system and just buy back into it as needed.  Imagine if we can do that with Auto Insurance? With so many progressive state programs for low income the people most commonly winging it are high middle income and younger people.

Secondly, the sole prop and individual markets in state such as NY are unaffordable.  This is the soft underbelly of the system that we also see as going uninsured especially with so many out of work employees who are working as 1099 consultants.  Extending COBRA to 36 months from 18 months staves this problem somewhat.  Perhaps extending COBRA even further may work as well even with a small added premium to extend form 36 month 60 month would still be a saving.  For example, a single NY non group HMO is $1000/month vs. $400/month for a group plan.

Finally and most importantly is Malpractice and Tort Reform. You cannot discuss Health Care Reform without attacking this issue and The Reform Bill falls short of doing this.  The actual cost of Malpractice is less than we realize.  Malpractice costs account for only 1% of spending but this leads to another estimated 9% is for “defensive medicine”. According to JAMA– “Defensive spending is described such as ordering tests, performing diagnostic procedures, and referring patients for consultation, was very common (92%). Among practitioners of defensive medicine who detailed their most recent defensive act, 43% reported using imaging technology in clinically unnecessary circumstances. Avoidance of procedures and patients that were perceived to elevate the probability of litigation was also widespread. Forty-two percent of respondents reported that they had taken steps to restrict their practice in the previous 3 years, including eliminating procedures prone to complications, such as trauma surgery, and avoiding patients who had complex medical problems or were perceived as litigious. Defensive practice correlated strongly with respondents’ lack of confidence in their liability insurance and perceived burden of insurance premiums.”

WIll this shape up to be a repeat of 1994 and dismissed as another failed  attempt by Democrats?  Perhaps not, so long as premiums are rising 10-20% a change must take place.  The President’s singular focus on this issue has moved government to act this far is an a testament to his will.  No other president in 50 years has wanted to touch this controversial topic with a ten foot pole  Trying to accomplish this in his first term is hubris and a bit naive but at least we have something on the table.  A true bipartisan bill may be the most lasting in the long run.

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