Health Care Reform Tourism...A Pilgrim's trip To DC

Been down with my own recent encounter with the health care system: a nasty case of pneumonia that's had me tired and wheezy...but no so out of sorts that I'd miss a quick trip to DC to talk about health insurance reform with a few key members of Congress.

We thought briefly of squeezing into the room where the Finance Committee was meeting to narrow down the differences both between and within the parties over the Committee's health insurance reform plan, but between the lobbyists and the media the crowd was 50 deep, so we met with members and staff instead.

Here are a few thoughts:

1)...The President seems to be of a mind to get some sort of health care reform plan signed by Thanksgiving recess. It'd be a nice symbol, but we encountered some genuine skepticism (especially among veteran staffers) that such a timetable was practical. After the Finance Committee finishes its mark-up, it must reconcile its version of the bill with the Senate Health, Education, Labor, and Pension Committee's mark-up...and the same exercise must go on among the three House Committees which have already passed their own (considerably more liberal) versions.
That's a lot of brinksmanship over a fairly short time, especially given that not even all the majority members of the Finance Committee seem willing to support their own bill;

2)...There seems to be some degree of resignation that whatever does manage to pass both Chambers will consist of a less ambitious plan than previously advertised. The big impact will largely be on insurance regulation, a necessary, but insufficient, component of health care reform. Reforms to the individual health insurance market will not take effect until 2013, at the earliest, and won't reach the small group market until five years after that. And while there are considerable political benefits to pushing the implementation of "reforms" out past the 2012 elections, the political calculation could backfire if people don't see the personal benefits of reform before the vote in 2012. And a bunch of Blue Dog Democrats fear voter backlash in 2010, regardless of what they do;

3)...It's hard to see how the reform plan actually saves anybody any money. Tax subsidies (which have yet to be paid for) may help to offset the cost of coverage for some people, but it seems clear that most insurance reforms will have the effect of, at best, re-distributing costs, and will probably cause a significant net increase in spending for small businesses and individuals, whether through taxes, through premiums, or more indirect means, such as bogus "excise taxes" on insurers, drugmakers, equipment companies, or other health care players, who'll just pass them on to consumers downstream.

We spent a considerable amount of time talking with Members and their staffs about the hug differential that exists between large employer groups, and small companies and self-employed individuals, in the realm of insurer administrative costs, and discussed ways to use information technology to make the process of shopping for insurance faster, easier, and more transparent for insurers, consumers, and brokers. This would be the best way to create a material and sustainable reduction in insurance costs...to focus on the 25-40% of insurer administrative costs which have nothing to do with medical claims, and everything to do with the institutionalized inefficiencies in the small group and individual insurance markets.

Technology could also be used to introduce a little much-needed competition into the health insurance market. In most local communities, three or fewer insurers control 70% or more of their local markets; in some communities, one insurer holds market share of 90% or better. With these realities, it's hard to see how insurers can say with a straight face that the introduction of a public option, or purchasing co-operatives, or insurance exchanges, could have a negative effect on competition...unless it's Opposite Day in Insuranceland.