Health Cost Containment in H.R. 3962

There are really two essential components to needed health care reform in America: access and cost containment. These are the two elements that threaten the health and economy of the nation, and that President Obama and the public have identified as most important to meaningful reform. Having 47 million people uncovered is a moral blot and embarrassment to the country, especially since many poorer countries are able to cover of all their people. But the cost of insuring them at American health prices is what makes it so difficult. We have less to go around when we have to spend 17% of our GDP on health to cover 80% of our people while others cover 100% of their people for only 9% of their GDP.

I asked a knowledgeable health professional if there are effective cost containment mechanisms in the health care legislation passed by the House last Saturday. Bob Montion is the retired CEO of a local hospital. He's read all 1,990 pages of H.R. 3962. You can read an article on it here, including a link to the entire document. I asked him if he could give me a synopsis of provisions in the bill that might help rein in the ruinous rise in American medical costs. After reading this you will have a good idea what to tell people when they ask what the legislation does to help get a handle on the rising health costs that are bankrupting too many Americans and making it harder and harder for our businesses to compete.

He says, "As for cost controls, the most effective is the public option. Insurance companies have feared the public option most because they know it will cause them to lower premiums to compete."

He remarks that preventative care will get a big boost under the new system. That should help drive down long-term costs by preventing potentially serious conditions from becoming critical and expensive.

Next, the simple fact that everyone will now have medical coverage, "will exchange expensive emergency care for low cost ambulatory care in clinic and doctor offices" and again, "identify illnesses early while they are manageable and cost effective."

Bob also mentions, "the seeds of medical malpractice reform in the bill," that can save a lot of money now spent on "defensive medicine."

He believes a continuation of the no-nonsense fraud and abuse enforcement initiated when the new administration came into office has already begun to bear fruit. "Some of the largest settlements ever have occurred in the last nine months. They will cut $100 billion a year in direct and indirect fraud and abuse." If that is true, this alone will pay for the cost of the bill, which is estimated at $102 billion a year over ten years.

This experienced health administrator would like to see additional measures in a final bill, such as, "a system that salaries doctors rather than paying them per service provided." Incentivizing more procedures doubtlessly insures that more will be performed.

In summation, Bob writes, "The cost provisions are there but subtle and designed to drive the market to reform its own system. Not nirvana, but a good bill."