28 December 2007

Stopping Reform: Public Thoughts

CNN Money has a piece with advice for health insurance companies and Pharma on what to do about all the talk of health reform. I'm wondering who the target readership is — perhaps mid-level management types?

Hard to say.

The advice boils down to this: Not to worry. Act reasonable, then after the elections lobby as usual.

In a December report called "Beyond the Sound Bite," PricewaterhouseCoopers compared the health-related policies of seven major presidential candidates: ... Democrats Hillary Clinton, Barack Obama and John Edwards and Republicans Rudy Giuliani, Mitt Romney, John McCain and Fred Thompson. ...

The Democrats propose "broader and more immediate changes, with new mandates, programs and funding."

The Republicans want no new government programs, preferring "indirect approaches such as changes in tax incentives that could move insurance away from an employer-based model."

PWC boiled down the issues to these: covering the growing uninsured population, changing tax rules to support health system changes, controlling health costs, and improving quality of care....

[None of the] candidates propose a single-payer system along Canadian lines. All seven candidates tend to rely on expansion of the existing private insurance market.

But the report notes, "The Democrats say they would also create new public programs to offer more choice and compete with private insurers."
The PWC expert advised the insurance companies needed to devise a strategy to compete with the government, if Clinton's or Edward's plan goes through.
Even if the Democrats don't hold the Congress and/or take the White House, Republicans can't be expected to maintain the status quo, says John E. Calfee, a scholar at the American Enterprise Institute ...

That's because the momentum to do something to bring the 47 million uninsured into the system is too strong.

"You know there's going to be heavy action on the Hill over this even if the Democrats don't win," Calfee said.

He suggests that the insurance industry attack head-on the question of its efficiency. Some analysts put the cost of bureaucracy and paperwork at 30% of the $2.1 trillion (in 2006) spent on health care in the U.S.
As for Pharma, a USC professor of pharmaceutical economics says he expects that Medicare Part D will change, and receive the ability to negotiate drug prices. That could hold down prices and bring greater transparency to the market — a worrisome scenario for Pharma stockholders, no doubt.

The good professor's advice: "appear cooperative and happy to get along with a new regime. Then, after the election, lobby vigorously in Congress, as usual."

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