How many of you know where hospitals get the money to pay those fines? And the fines are expected to average about $125,000 the first year. Hospitals make money by seeing patients. If they are fined for readmitting too frequently, they will do a couple things. First, they might just refuse the business if it involves a government health care program like Medicare. Some seniors have found that doctors no longer wish to accept patients on Medicare because of the low pay, slow pay time, and other red tape involved. It makes it unprofitable. Will hospitals be next?
While the government may impose fines, they also tell the hospital how much they will pay per occurrence. Hospitals are unable to raise rates to cover the fines, at least on government sponsored health care. They would have some latitude to raise prices on those patients who pay cash, or are privately insured, causing those people's costs to go up. Health care insurers, who also need profit to stay in business would have to raise rates to their subscribers to cover increased costs. That hits the majority of people. Is that one of the hidden taxes of health care reform? And don't forget, if you do not have health insurance, there will be a fine collected by the IRS when you file your taxes, effectively holding up the market for insurance. The rich and big corporations can side step this by self insuring, then carefully picking their employees to minimize risk. The middle class will pay once again.
It is government meddling in the market that has caused health care costs to rise, government meddling will not solve the problem now. Prior to World War II health insurance was rare. For the most part people paid the doctor when they went to see him, or made arrangements to pay the provider if they could not afford the lump sum, remember the stories about paying with a chicken? In World War II the government imposed wage freezes, meaning that to attract quality employees, companies could not offer more money, they could offer benefits though and the big one was health insurance.
As more people were exposed to health insurance, they found it was a useful benefit. After the war, insurance companies fought for those dollars and consumers benefited. As more people used health insurance, however, it took more and more of them out of the reality of actually paying a doctor, that's what the insurance company did. If the child sneezed, off to the doctor demand skyrocketed. Doctors and other providers found that the insurance company did not argue much back then, just wrote the check, and doctors gradually increased their fees. There was no market force to control costs. At first there were slight premium increases, but as the machine started rolling the increases accelerated.
Along came HMO's, who reduced costs by trying to control costs paid to doctors, they had negotiated rates for particular services. HMO's could have helped reinstall the market place, but for the most part they found it was easy to pass along price increases and this never eventuated to a major degree. As costs spiraled up ward, more and more people were being priced out of the market. Now when they need emergency help, they show up at an ER, who are required to stabilize them and if they don't pay... whatevverrr. So now along comes government, to try to fix the problem they created. Regulations have not controlled costs but pushed more people off the insurance rolls. And as mentioned earlier prevented some seniors from seeing the doctor of their choice.
Today we have a major problem, before WWII doctors were primarily middle class. Today, they are upper middle to upper class. To take money away from them would discourage them from staying in the industry and others from joining it. But if the pre WWII market forces were still in effect, we probably would not need to be discussing this as much. To try at this point to reinstall the market forces would actually force us to declare health insurance illegal. Then individuals would be forced to monitor their own costs, and choose health care like anything else. But that would harm millions of peoples access to health care and I'm not sure this is a viable option anymore.
In the last 3 1/2 years median income has decreased by over $3000. Gas prices have doubled, health care will go up soon, and the drought across the heartland this summer will push up food prices. This will reduce disposable income and it is possible, perhaps probable that we dip in to recession, or even depression. Even if reforms are made, the economic hurt will probably harm the economy. But our leaders will try to do what they always do, push off the really hard things as long as they can, then set up a bipartisan commission to study the problem, then reject the suggestions of that commission. It isn't good for getting votes...
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