Health Care Subject Matter Experts Part 2 Sally C. Pipes

A few weeks ago, my Leadership Program of the Rockies class heard Sally C. Pipes speak on the American health care system.

Who is Sally Pipes, you ask? (It’s okay, I didn’t know either!)

She is author of The Top Ten Myths of American Health Care: A Citizen’s Guide, and President of the Pacific Research Institute, a San Francisco-based think tank. She’s also Canadian.

So, in Part Two of our treatment of this topic (pun intended), I’ll share the notes I took during Sally’s presentation. Please bear with me for the fragmented writing – I took notes as fast as I could!

The American health care system is like an onion – it has many layers and many tears!

In her opinion, there are two missions for health care reform: support patients and increase the role of government.

Obama has said he wants a single payer system. There are only two countries in the world right now where that exists – Canada and North Korea.

The US does not have a free market health care system at this point since 50% is already in the hands of the US Government (Veterans Administration Systems, Medicare and Medicaid, etc.)

The US spends approximately 17% of our gross domestic product (GDP) on health care. Canada spends approximately 9% of their GDP, but here’s the difference, that’s what the Canadian Government has stated they can afford. At this point in time, Canada needs to spend $2 Billion to update their radiology equipment.

The average wait to see a Primary Care Physician in Canada is 16 weeks.

Sally’s mother tried to get in to see a doctor when she experienced some colon problems, but was told, “At your age, you cannot have a colonoscopy.” They gave her some drugs and sent her home. When it got really bad, she was encouraged to go to the Emergency Room which had to give her a colonoscopy. (I won’t go into details as to how bad it got). She died two weeks after having the colonoscopy. She was 53.

Per Investor’s Business Daily, 45% of doctors said they would consider getting out of the business if this health care bill passes.

When Canada decided to create a government run system, they went to England and ask what mistakes had been made. The Brits said their biggest mistake was to allow private health care to run parallel with the Government system.

Barney Frank was quoted as saying, “We have to get the camel’s nose under the tent to get to a single payer system.”

Her projection if this health care bill passes: hospitals will close, there will be low reimbursement rates which will add a 10% “hidden tax” to the American taxpayer

The reasons why Medicare costs are lower than private insurance is because Medicare outsources; costs for private insurers are higher, but they do it all

The Pillars of Obama’s Plan:

  • There will be a Health Insurance Rate Authority (Federal Board) to determine if insurance premiums are too high – similar to a regulated utilities
  • There will be a 40% Excise Tax until 2018 (this is the one Union members and Federal Employees are said to be exempted from)
  • The Medicare Payroll Tax will increase to an additional 9%
  • There will be State run Insurance Exchange by 2014 to determine what makes an appropriate benefits package
  • There will be an increase of subsidies. Fourteen million people are eligible for Medicaid and SChip health care programs but haven’t signed up. Why? They cannot get a doctor due to low reimbursement rates.
  • There will be an individual mandate forcing taxpayers to pick up insurance, something the “young invincibles” may not appreciate. The fine for not doing so will be 2.5% of their income starting in 2016.
  • There will be an employer mandate: for employers with 50+ employees there will be a fee of $2000 per employee if ANY ONE of their employees gets a subsidy
  • There will be controls on insurance to cover dependent children up to age 26. Recision will be prohibited and there will be no lifetime caps.
  • Medicaid expansion. One quarter of Seniors are on Medicare Advantage and Obama plans to eliminate it.
  • A Public Option

Health Savings Accounts will not survive if the Government decides what a benefits package will look like. Mandates will increase costs.

Private insurers will be crowded out of the market and Government will set a percentage they feel they can afford.

We may have Universal health care but not universal access!

In Canada no doctor can set up their own shop, but it IS happening. (Quebec is an exception because of their constitution) Canadian medicine is a study in restricted entry. Our best and brightest are not going into medicine due to the salary caps. (no incentive)

What must happen?

We must empower doctors and patients. FYI, the employer based health care system started in the 1940’s as a way employers tried to work around Federal wage and price controls to attract workers.

We must change the federal tax code. Private individuals should be able to buy coverage with pre-tax dollars.

The federal government should beef up the state run high risk pools. The impact – bring high risk people into the pool and it will attract moe companies to come into the market.

Consumers should be able to buy across states lines and open up the market just like in the car insurance industry

Reduce state mandates – it adds (get this!) 20-50% of cost to premiums. Examples of mandates which we all pay for include in-vitro fertilization.

Tort Reform. The cost of defensive medicine is estimated at $210 Billion. Docs are afraid of being sued. Some pay approximately $180,000/year in medical malpractice insurance. When Texas passed tort reform laws, 16,000 doctors moved to Texas.

41,000 Canadians come to the US every year for care.

We need transparency in our health care system. We need a patient-centered (not government centered) health care system.

You will see a rise of specialty hospitals.

Who do you want to be in charge of your health care, you and your doctor, or a bureaucratic board?

“If you think health care is expensive now, just wait until it’s free!” (PJ O’Rourke)

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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