Healthcare reform seemed to be on the ropes earlier this year. But lo and behold, insurance companies raised rates enormously in the individual market. The president began vilifying greedy insurance companies, and many sad stories of people denied care were shared.
This week we will learn if reform has been truly resuscitated. If so, who will be the winners?
President Obama wins, because he will have achieved his signature issue. The other winner will be the insurance industry as it enrolls large numbers of relatively healthy people.
As the game is played out, rates will be reduced from their “enormous” levels and politicians can inform the public that reform really works. The insurance industry will build huge reserves using some of the arcane standards of IBNR (incurred but not reported). Insurance profits will swell and the stock market will treat insurance stocks well.
I suspect the next chapter will be that total healthcare costs will soar, as more people will feel that healthcare is free, and they will request more tests and procedures. What a surprise!
The next villains will be doctors and hospitals with “out of control costs.” The insurance industry and government will be “forced” to implement price and fee controls, along with some form of rationing.
Yes, there are some provisions in the Senate bill that are good for hospitals. Some of the pilot projects on bundling payments are good, but as I understand it, there are no guarantees to turn pilot projects into actual policy.
With any major policy program there are always unintended consequences. This bill may have more than usual. The bill did not need to isolate the consumer from having a role in controlling cost. We had a chance to tackle healthcare reform better than this.
Whether patients end up winning or losing has yet to be determined.
Ed Howe blogs regularly at Action for Better Healthcare.