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Reducing The Cost Of Health Care – For Real

Reducing The Cost Of Health Care – For Real

That title is not out of a fiction novel. It could happen right here in our time.

A few weeks ago, both the Obama Administration and the US House made major moves to begin limiting the outlandish awards being handed out by some juries in medical malpractice cases. This area has long been a trial lawyers’ playground and each of us is paying the price.

We may be making the right kind of progress now. The President included $250 million in his budget so that the Department of Justice could work with states to rewrite their medical malpractice laws and see real, effective change on this issue. The proposal provides some specific areas of relief by using judges with expertise in this area to decide cases instead of allowing juries to dole out unreasonable awards. Additional proposals might include creating reliable standards for doctors to operate under that would allow them to prove they were not negligent and a shift from full liability of every entity involved, to proportional liability amongst all parties (hospitals, doctors, insurance companies, etc.).

House Republican efforts are a little more straightforward. They would impose a cap on non-economic damages awarded from juries. This would take out much of the incentive for the frivolous and costly lawsuits in the medical industry. Here is a more detailed summary of House File 5, cleared through committee about a month ago (you can read the bill here):

  • Help Efficient, Accessible, Low Cost, Timely Healthcare (HEALTH) Act of 2011 – Sets conditions for lawsuits arising from health care liability claims regarding health care goods or services or any medical product affecting interstate commerce.
  • Sets a statute of limitations of three years after the date of manifestation of injury or one year after the claimant discovers the injury, with certain exceptions.
  • Limits noneconomic damages to $250,000. Makes each party liable only for the amount of damages directly proportional to such party’s percentage of responsibility.
  • Allows the court to restrict the payment of attorney contingency fees. Limits the fees to a decreasing percentage based on the increasing value of the amount awarded.
  • Allows the introduction of collateral source benefits and the amount paid to secure such benefits as evidence. Prohibits a provider of such benefits from recovering any amount from an award in a health care lawsuit involving injury or wrongful death.
  • Authorizes the award of punitive damages only where: (1) it is proven by clear and convincing evidence that a person acted with malicious intent to injure the claimant or deliberately failed to avoid unnecessary injury the claimant was substantially certain to suffer; and (2) compensatory damages are awarded. Limits punitive damages to the greater of two times the amount of economic damages or $250,000.
  • Denies punitive damages in the case of products approved, cleared, or licensed by the Food and Drug Administration (FDA), or otherwise considered in compliance with FDA standards.
  • Provides for periodic payments of future damages.

The movement on both sides should be seen as a win for health care consumers. Runaway litigation has led to massive increases in unnecessary medical procedures and huge run ups in doctors’ insurance premiums, and will continue to spin out of control. All of those expenses are passed on to the premium payer and the taxpayer, in other words, you and me. Now is the time to enact real medical liability reform.

Reducing The Cost Of Health Care – For Real

Republicans Lead In Polls, ObamaCare Progresses, And Other Dangerous Things

Running with scissors, bungy-jumping, lion-training don’t hold a candle to these two items…

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Republicans appear to be doing well, very well, scary well. So what’s to be done about it? Republicans need to work harder, get more engaged, get more yard signs up, knock on more doors!

Why, you may ask, would I think that?

Because early poll successes:

  1. Are deceiving. In Politics, scientific polling lacks integrity because there are so many factors and inconsistencies, including the fact that they reflect a point in time, which is not election day
  2. Are open to interpretation. The complexities and meaning behind poll answers can be interpreted multiple ways… sometimes the answers mean something different than what we think.
  3. Can lead to complacency. Accepting that your candidate is going to win hands down can lead to voter apathy and before you know it, everyone that said they were going to vote decides to stay home election day or just forgets to vote.

It’s great to feel good about these polls… I’m very enthused about our prospects here in Iowa. But polling can cause us to take our eye off the ball… we need to stay focused on the message, on getting it delivered to the people that need to hear it most, and make sure we get everyone out to vote come election day.

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Did you think that maybe ObamaCare wouldn’t impact you directly for a while? Think again.

New rules from the IRS issued earlier this month, based on the Affordable Care Act now require that those who pay for over-the-counter (OTC) medications (such as Claritan, Robitussin, etc.) FSAs or HRAs, beginning January 1, 2011, to get a prescription for these medications to get the reimbursements. Flexible Spending Account (FSAs) Health Reimbursement Accounts (HRAs) setup for medical expenses not normally covered by insurance, using untaxed dollars. On top of this, patients will have to submit the prescription information along with the receipt to their account program adminstration instead of using the more convenient (and appropriate) debit cards most of these accounts now provide.

It may seem like a small thing, but doctors don’t typically hand out prescriptions of any kind without a visit, which will cost the patient and/or their insurance provider. Add to that the new paperwork burden, and you’ve impacted many Americans enough that they will (rightfully so) choose to abandon the use of the untaxed (or pretaxed) dollars and instead reduce their FSA/HRA use (or eliminate it) and just pay for these medications with taxed dollars.

Yes this is for real, and yes I think it’s stupid. This is the result of just a small piece of the gargantuan legislation passed by a Congress bent on making us miserable. I’m convinced of that now. Give them 2 more years and they will find a way to ensure that the Government will simply pay for these medications (with an appropriate prescription) instead of just going back to a system that worked fine, therefore making us even more dependent on the government.

And the best part is, you can still use these accounts like you always did for any other medical supplies that don’t require a prescription. You will have to get a prescription to get a, frankly small, tax advantage.

Government savings, none… I can pretty much guarantee that the new taxes recovered will barely pay for the paper used to print this stupid bill. More likely we will see substantive costs go up, either in government or for insurance companies, to support this idiotic requirement.

Sometimes it just seems dangerous to get up in the morning.

Iowa GOP Chairman Strawn Issues Statement on Health Care Vote

Iowa GOP Chairman Strawn Issues Statement on Health Care Vote

iowa-gopDES MOINES – Republican Party of Iowa Chairman Matt Strawn issued the following statement on today’s passage of health insurance legislation by the U.S. House of Representatives.

“Instead of working for bipartisan reforms that most Iowans could support, Iowa’s congressional Democrats chose a partisan approach that amounts to a staggering, half-a-trillion dollar cost to the American taxpayer while giving the federal government an unprecedented amount of control over personal health care decisions.

“The blatant disregard shown for the opinions of everyday Iowans who oppose this partisan bill is offensive enough, but it is unconscionable for Congressmen Boswell, Braley and Loebsack to force another $562 billion in debt on our children and grandchildren.”

State-based Health Care Reform Solutions

State-based Health Care Reform Solutions

Paul-McKinleyI’ve heard this week some suggestions that having the individual states administer reforms to provide improved health care might be a better way to accomplish what is needed.  Paul McKinley, Senate Minority Leader and candidate for the Republican nomination for Iowa Governor, released one of his insightful memos today on this very topic.

“Iowans are overwhelmingly in favor of making health care more affordable, accessible and portable. Most Iowans are also happy with their health care coverage, they just want their elected officials to institute some reasonable and responsible market-based revisions to the current system to make health care less expensive, more accessible and more portable.

“The direction some in Washington D.C. want to pursue will not make health care more affordable, accessible or portable and instead amounts to a government take over of nearly one-fifth of the country’s economy. Instead of empowering patients and physicians, the direction D.C. is headed will strip away personal liberties and empower government bureaucrats. Now is not the time to throw out the entire system we utilize today and replace with an expensive, rigid and confusing bureaucrat controlled government takeover. The plans being discussed in Washington would add hundreds of billions in debt and do nothing to improve affordability, accessibility or portability.

“Instead, Iowa Senate Republicans are proposing a set of initiatives and reforms that can be implemented at a state level within the market-based health care system already in place. They are carefully crafted to make health care in Iowa more affordable, more accessible and more portable.

“First, Iowa Republicans propose to establish a statewide online information hub that brings together both cost and outcome quality data in a searchable format for consumers. We believe the information age provides a tremendous opportunity to compare cost and quality in the delivery of health care services. Competition and comparisons save employers, families and individuals money.

“Younger Iowans in the 18-30 age, given their relative age and better health, often do not make purchasing health insurance a high priority. As a result, when they do have to seek medical treatment it is often for a serious condition and therefore very expensive. In fact, there are 106,000 Iowans in this age group who do not have health insurance and account for roughly half of all the uninsured in the entire state. Therefore, Senate Republicans propose legislation that will encourage the development of low cost market-based catastrophic insurance products that will provide base care for younger Iowans.

“Third, no serious attempt at reducing rising health care and insurance costs can move forward without an honest attempt to address the issue of medical malpractice reform. We have continually championed the need to pass legislation that raises the burden of proof for malpractice claims and places reasonable limits on payment for damages. Those hefty costs are passed on to consumers like you.

“Next, current law allows large employers the opportunity to deduct health care costs “above the line” – meaning a dollar for dollar reduction in their taxable income equal to the employer share of health insurance costs. This is a tremendous incentive for employers to provide health insurance to their employees. Thus, it should be no surprise an independent study shows 94 percent of employers who have 50 or more employees provide health insurance, whereas 36 percent of employers who have 10 or fewer employees only offer health benefits.

“Because a significant portion of our population now work for small businesses or for themselves, we believe such “above the line” deductions for health insurance costs should be extended to all businesses and individuals. Some estimates suggest an above the line deduction for health insurance costs may provide a 30 percent savings on such costs and provide a significant incentive to offer health insurance benefits to their employees. If it’s good enough for Wall Street, it ought to be good enough for Main Street.

“Prevention programs that encourage long-term commitment to wellness practices are proven to reduce demand for expensive health services and curb future growth in health care spending. However, our current system chooses to focus on imposing penalties on those who practice less healthy lifestyle through higher insurance rates rather than rewarding good health practices with lower rates.

“Consequently, we propose legislation to encourage insurers to offer “prevention credits” to individuals and businesses that can be used to reduce health insurance rates for those that demonstrate a commitment to wellness and prevention. “Prevention credits” will allow an average Iowa family to save upwards of 15 percent on their health insurance premium or $1,635 on an average family policy. According to the United States Department of Health and Human Services there is a return on investment of up to $4.91 for every dollar spent on wellness.

“Finally, we favor a bill that prohibits the denial of coverage for pre-existing conditions if you change policies within a health insurance company. Simply changing policies within a company does not mean you should lose your coverage if you have a pre-existing condition.

“I know we can make a real difference in lowering the cost of health care without turning our entire health care system and a large segment of our economy over to the government. We must utilize common sense reforms that can be done right here in Iowa. We can be a leader in showing the rest of the country how to achieve market based health care reforms that make health care more affordable, accessible and portable without adding hundreds of billions in generational debt and putting the government in charge of our health care.

 “As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at [email protected].”

I think there is a lot to be said for focusing many of these efforts at a state level instead of federal.  Some states, like Florida, have implemented some tremendous solutions to help reduce costs and ensure that patients help participate in controlling those costs.  In some cases, both the challenges and solutions may more regionally specific and better solved regionally.

One area that will likely require some federal oversight will be cross-state portability.  Some states might be resistant to such portability (and admittedly, due to influence by Insurance Lobbiests), but it would still be beneficial to make this a joint effort between the states under the herding of Congress.

I like where Iowa Republican leadership is headed.

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