Friday, September 26, 2008

Is This What We Want in Healthcare?....10/7

Looking back at the sub-prime mortgage mess, you have to consider what the original 'intent' was, and what has happened in practice. There are considerable parallels that can be drawn between that and what the future of healthcare holds for us. Freddie and Fannie were pseudo governmental entities--sort of like the Post Office.

"1970: The U.S. Congress creates the Federal Home Loan Mortgage Corp., nicknamed Freddie Mac."
What may play out could possibly be foretelling the fate of healthcare in a foreseeable future.

Well, what do I mean by that? De-regulation is being slapped about as the cause of the problems, but was it de-regulated? There were several mandates that were placed on lenders to make sub-prime loans. They made them, but in order to minimize their exposure (risk), they would re-sell those mortgages. Those were repackaged and sold as securities by Freddie Mac. When the mortgages were defaulted, the securities were we see where this is heading?

"Freddie Mac is a shareholder-owned corporation whose people are dedicated to improving the quality of life by making the American dream of decent, accessible housing a reality. We accomplish this mission by linking Main Street to Wall Street--purchasing, securitizing and investing in home mortgages, and ultimately providing homeowners and renters with lower housing costs and better access to home financing. Since our inception, Freddie Mac has achieved more than 30 consecutive years of profitability and financed one out of every six homes in America."
30 years of profitability---didn't quite make 40, did we? And, for the last several years, the CEO of Freddie Mac was stating that the reported figures were not accurate! Why isn't the former management team of the F.M.s coming under the same scrutiny as Enron? There is far more money and far more impact in the trickle-down effects.

Do we want this kind of management turned loose on healthcare? How about the politics? Speaking of politics, Senator Obama has the honor(?) of being the recipient of the second largest amount given to campaigns of elected officials by Freddie Mac/Fannie Mae ($126,349). McCain's campaign also received contributions, but far less substantial ($21,550). I'd say both would be better off returning the money. (Note: The Republican 'leader' that is being touted by the Democrats as having reached an agreement on the bailout was on the list--the most money taken in by a Republican campaign from the F.M.s.)

Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that.
Can you say, "Deal Maker?"

We see the purpose as providing 'accessible' housing. Isn't that similar to the mantra of 'accessible' healthcare.

Can you see the writing on the wall?


Anonymous said...

I think that you are off the mark when you venture into politics. We already live with government financed health care - it's called Medicare and it has a 3% administrative overhead vs the 15% to 20% overhead that commercial insurers have. And we already have mandates to provide care - like EMTALA - as well as a long tradition of providing care gratis to those who cannot afford to pay.

The problem is that with no insurer, the government included, willing to pay more than their "fair share", there is no one left to shift the costs to. This is why mandatory coverage makes sense. There are millions of twenty-somethings walking around uninsured. They are healthy and think that they'll never get sick, so they spend more on a Saturday night than a month's health insurance premiums would cost. But when they do get sick, be it appendicitis or a brain tumor, they are wiped out financially and those costs are shifted to you and me. And like it or not, they have worse health outcomes because they put off receiving care until they are sicker than insured people.

I don't necessarily want to see government run health care, but "the market" has not done much better for health care than it has for investment banking. Health care costs have rendered American industry non-competitive, yet our health outcomes are WORSE than most other western industrialized nations. Even insured people are finding it harder and harder to absorb the out of pocket costs that their insurance doesn't cover, yet premiums continue to skyrocket.

In short, the system is broken. The only question is whose ox is going to get gored? The system is seriously flawed, with numerous pockets of outright corruption (Medicare DME anyone?), skimming at the margins (E$$ent and the whole for profit industry), and misaligned incentives (cardiologists with their own 64-slice CT scanners, orthopods with MRI machines, etc) that reward more "productivity" without improving care. But a lot of people are making a lot of money maintaining the status quo, and they are going to do everything possible to hang onto the brass ring.

And one other thing... Since we don't really make much in America any more, except hamburgers perhaps, and since the finance and housing industries are undergoing major contractions, just where are all of the jobs going to come from? Like it or not, health care is the only engine of the economy still turning! So fasten your seatbelts - we're in for one heck of a ride!

fac_p said...

Personally, I liked fee for service. But that isn't going to be back anytime soon.

Right now, Medicare swings a big stick, even bigger, lately, as the boomers hit eligibility. However, the inclusions that have been incorporated into Medicare, are what is going to eventually either drive it into a socialized medicine, or bankrupt it.

Seems like what has happened to Social Security--originally a program to give a little extra to supplement savings and retirement programs. Back then, those that didn't save, or plan for the future were looked down upon.

Pretty soon I'll bet there is going to be means testing, and then the lack of planning and savings is going to be rewarded...with those who did plan and did save penalized for such foresight.

You've probably seen the updated version of the ant and the grasshopper. Funny, but it has that little shiver of prophecy.

fac_p said...

And whenever you have a system, someone is going to figure a way around it.

Remember seeing your family doctor back in the good 'ole days? You ran through the lists of ailments and didn't come back for another year?

Seems like that list has translated into a list of appointments--because of the limits placed on providers. Now you get around it by seeing the patient for each ailment separately...and bill for each time.

And how about the medications that require monthly levels testing--another visit.... Wish I could have stayed on aspirin....

Actually, I did.

Anonymous said...

Can you see the writing on the wall?

Merrimack Valley Hospital is having laid-off???? Can you see the writing on the wall??? I see closing!! How much in the red can they go. Not to mention the poor management - CEO - changing # - The CFO is a puppet to the CEO - the CNO words can't explain her incompetance and the controller who worked with the CEO to change the numbers at Emerson.