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New Captain at the Helm of American Healthcare

Driving our system off the cliff

As all major news outlets are reporting , former Senator Tom Daschle has accepted an offer from President-elect Barack Obama for the post of Health and Human Services Secretary. While most people were aware that Daschle was on the short list for the job, the healthcare industry at large is not responding well to the fact that he actually got the post.

The first question that came to mind for most healthcare industry professionals was what business does the former Senate Majority Leader have heading up HHS. It’s a valid question, considering Mr. Daschle was a major proponent of the widescale failure of HillaryCare in the 1990′s. This plan, which was defeated in no small part by the effort of healthcare advocates, is widely considered one of the worst proposals for the healthcare industry ever imagined.

But Mr. Daschle hasn’t sat quiet on healthcare since realizing he was on the list for the job. The WSJ Health Blog highlights Daschle’s book set to be released in February, which is so creatively titled, What We Can Do About The Healthcare Crisis. In the book, Daschle outlines his recommendations for what should be done to solve the nation’s healthcare crisis, the main component of which is to build a governing body over the healthcare system, which would essentially act like the Fed does over the economy. I admitedly have not read the book, so I can’t speak specifically to this proposal, but I am curious to learn more, especially considering the Fed doesn’t preside over the economy – it manages monetary policy, which is only part of the economy. Therefore, we should ask Mr. Daschle how exactly a healthcare authority would preside over the broad and complex system, which accounts for almost 20% of GDP.

The answer is simple: Daschle would further the plan of some members of Congress and the new administration to implement universal healthcare, where the government would subsidize healthcare coverage for US citizens. In case you’re unfamiliar with my previous posts on the idea of universal healthcare, you may recognize it better when described as “socialized medicine.”

Before I go on, let me point out that I am not speaking as a political operative or in any way from a political standpoint. To provide a little more credibility on where I come from on this issue, I will encourage you to read more about my experience , where I have worked in the healthcare industry for a number of years now, specifically in healthcare management consulting and now in private equity investment. I have written dozens of articles and white papers on various healthcare topics, including policy analysis of universal healthcare and other proposals, as well as writing a regular column for the Journal of Medical Practice Management that focuses on healthcare policy in Washington. Finally, I was a co-author of one book where I address market challenges within the healthcare sector, specifically from the perspective of increasing competitiveness for healthcare provider organizations.

I am not pointing these things out to brag or highlight my accomplishments; I am merely exhibiting that I understand the healthcare industry. More importantly, I understand how critical it is for healthcare providers and patients alike to find a policy solution that is market-driven and centers around quality, rather than merely embracing a socialized model that will have detrimental effects on the economy and more importantly on the quality of healthcare that our patients receive.

Last week, I wrote a post in response to the recent plan that Sen. Max Baucus (R-Montana) introduced, which includes universal healthcare with mandate provisions requiring all Americans without health insurance to have government-sponsored coverage. Basically, this is the first drastic step towards truly seeing a socialized model in the US, compared to the systems in many European countries and Canada, which I highlight in the post. If implemented, such a plan would have widescale negative effects on patients and providers, most importantly including a decline in the quality of care provided through the US healthcare delivery system.

Ultimately, I hope Tom Daschle can do what is needed to drive the healthcare system (from the government’s perspective) where it needs to go. I hope that he can work with President-elect Obama and the Congress to implement the most effective healthcare reform model for our country’s medical consumers. However, I strongly urge people to look deeper into what universal healthcare would mean and how negatively it would impact the system. Not only would it not solve the crisis of the uninsured, but it would also result in significant cost increases, which we would all be responsible for, not to mention the quality decreases, which I already addressed.

Doctors and medical providers already have a tough time as it is remaining in business and staying competitive within a very volatile sector environment. The image of doctors driving expensive cars from their plane to their boat to their vacation home is a dream of the past. Today, medical practices are shutting their doors, because they cannot afford the rising costs of malpractice insurance. These costs have increased, due to the scary amount of increases in frivolous lawsuits, defended by trial lawyers, which are closely associated with Democrats in Congress.

Moreover, the rising costs of healthcare are killing the American business environment, not to mention the significant impact that the economy feels from this burden. Many small businesses can’t afford health insurance and large businesses are being forced to either reduce coverage or allow their margins to fade. Indeed, the Big Three automakers are testifying as we speak in the House Financial Services Committee, and one of the largest factors that have led to their margins decreasing and financial insolvency is the increased cost of healthcare benefits brought on by insurance companies and strong-armed by the unions. This is not a system that works, but under universal healthcare, the problem will only be compounded.

As such, the only system that will really allow for sustainable solutions to the nation’s healthcare delivery system will be one driven by the market, rather than the government. Can you image walking into a healthcare facility that is managed and financed by the government? If you’re a veteran, you can, and you know how atrocious it can be. Or, go to a facility in Canada and see what the treatment is like. Even the British are starting to realize this and take steps towards adopting a market-driven healthcare system after decades of a flawed socialized model that increases costs to taxpayers, lowers quality of care for patients and reduces the financial benefit for medical providers.

The system we need should be centered around ideas like pay-for-performance and consumer-driven healthcare. Moreover, the model should be built on wide incentives for the adoption of advanced technology to be used in the healthcare delivery process. All of these strategies focus on increasing quality, competitiveness and access – all good things for the strongest capitalistic system on the planet, regardless of economic downturn.

If you care about this issue, stay on your policymakers and work to inform yourself. Needless to say, a lot is at stake.

This post was originally published on my blog at www.marktomarket.typepad.com

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