Every Presidential succession, a new President seems to make promises to modernize U.S. healthcare, most of them he can’t keep. The Obama Administration’s ambitious agenda to reform a broken healthcare system seems calculated in a similar fashion. But everything is not always as it seems. This time, the new measures offered might achieve results – especially in relation to electronic medical records software implementation.
Healthcare IT (Information Technology) has surfaced as a distinct priority backed up by dollars – lots of dollars; even with some substantial shaving of dollars in the stimulus package ($30 billion was originally allotted for Healthcare IT), the numbers remaining are still a “healthy” $19 billion. Much of the administration’s attention is focused on mechanisms that improve access to data, of which a prominent facet has to be electronic medical records systems and software.
An Obama stated objective is to “invest in proven strategies to reduce preventable medical errors.” This inevitably leads to finger pointing at a “paper system” where physicians jot down prescriptions in often ineligible handwriting, where patient files and records are misplaced and have to be needlessly duplicated or even created anew from scratch, sacrificing not only paper but efficiency and perhaps safety in the old-fashioned processing. In fact, a wider adoption of medical records should save lives.
EMR systems are quite efficient and proficient in the managing and dispensing of prescription drugs, the primary source of medical errors. But can the Obama-era U.S. healthcare juggernaut take full advantage of a newfound electronic data stream? How much of the data will be quantifiable in a traditional sense? The size of data warehouses will be growing radically. Can the stream be mined adequately in the coming years for qualitative analysis? These questions will pose enormous challenges, but also offer potentially staggering rewards.
The new blog of Compass Professional Health Services called Quit Wasting My Healthcare is focused on helping individuals and employers receive higher quality care and stop losing money on senseless healthcare costs. Quit Wasting My Healthcare is written by healthcare experts: a physician and a former hospital finance executive. They form a team with integrated clinical and economic acumen that is so badly needed in today’s healthcare world. The writers have seen the frustration, the inefficiency and the substandard care that is the US healthcare system from the front lines. The writers also have the data and have identified over $1 billion of waste in just one major metropolitan area alone. Employers are getting fleeced. Patients are not getting the care they deserve. Quit Wasting My Healthcare is your guide to the underlying problems and their solutions.
Quit Wasting My Healthcare takes insider provider know-how, turns it around and gives it to you in easy to understand language so that you can navigate the broken US healthcare system. Recent posts include topics such as:
(1) Using co-insurance to drive change
(2) $1,000 CT scans of questionable
(3) Price differences of over 200% even within network
You’ll find ideas on employer health benefit plan designs, thoughts on saving money when visiting the doctor, and comments on the politics of healthcare in the United States.
If you are a company CFO or president, if you work in employee benefits, if you are a healthcare professional or if you work in the insurance industry, then Quit Wasting My Healthcare is worth your attention.
Not reading it is a lost opportunity to learn something smart about healthcare.
About Compass:
Compass Professional Health Services was established in 2005 with the mission to help employers and individuals lower their healthcare costs while maintaining or improving the quality. Our employees and leadership bring unparalleled expertise in provider charge structures, patient guidance, and health satisfaction metrics. This experience uniquely positions Compass as a leader in employee healthcare support. Our services return control to the patient in a way that benefits the entire healthcare system. Better care, lower costs, happier patients – employers who use Compass see the difference.
Mission:
The Mission of Compass Professional Health Services is to enable consumers and employers to receive and purchase higher value healthcare.
Vision
Vision:
The Vision of Compass Professional Health Services is to be the premier provider of information and services that shift consumer and physician behavior towards lower cost and higher quality care.
Philosophy:
Every person has the power to become a better healthcare consumer.
President Barack Obama had a hard won victory on Saturday night (the 7-8th day of November 2009) when the landmark health care reform legislation (HR 3962) was passed with 220-215 votes. Now if everything goes the Obama way, then by the end of the year ’09 “Affordable Health Care for America Act” would apply as a law impacting almost fifty million US lives. But what does this Act actually imply? How does it stand to impact an average US life? How does the Act affect the outsourcing industry at large? Through my article below I endeavor to answer these and many more questions.
Ab-initio we will refresh the fundamentals of federalism, stating the Roles, Duties, Nature, Scope and Restrictions on the government in a written federal constitution. Next we proceed to see whether the above attempt by the federal government to accede healthcare legislation is ultra-vires the powers granted by the US Constitution.
What is Federalism?
According to the traditional classification followed by the political scientists, constitutions are either unitary or federal. In a unitary constitution, the powers of the government are centralized in one government viz., the Central Government. In the federal constitution, on the contrary, there is a division of power between the federal and the state governments in a way that they are both inter-dependent and independent at the same time.
As we all know that Constitutions are organic documents which operate as fundamental law. The governments and their organs owe their origin to the constitution, derive their authority from the constitution and discharge their responsibilities within the framework of the constitution. The judiciary has the power to declare a law unconstitutional if the law is found to have contravened any provision of the constitution. The American Constitution is the oldest and a well praised example of federalism.
What are the powers granted by the US Constitution to the State Government?
Powers reserved for State Governments are:
• Establishing local governments
• Issuing licenses (driver, hunting, marriage, etc.)
• Regulating intrastate commerce
• Conducting elections
• Ratifying amendments to the U.S. Constitution
• Providing for public health and safety
• Exercising powers which are neither delegated to the Federal Government nor were prohibited from the States by the Federal Constitution (residuary powers)
• Framing other domestic law (for example, setting legal drinking and smoking ages etc.)
What are the powers granted by the US Constitution to the Federal Government?
Under the Constitution, powers reserved for the Federal Government are:
• Printing of money
• Declaration of war
• Establishing the armed forces
• Entering into treaties with foreign governments
• Regulating commerce domestically and internationally
• Establishing post offices and issuing postage
• Making laws necessary to enforce the Constitution
What are the powers shared by Federal and State Government?
Under the Constitution, the shared, or “concurrent” powers are:
• Setting up courts
• Creating and collecting taxes
• Building highways
• Borrowing money
• Making and enforcing laws
• Chartering banks and corporations
• Spending money for the betterment of the general welfare
• Acquiring private property with appropriate compensation
What is the HR 3962 Act ?
The HR 3962 Act conceptualizes a new, voluntary, public, long-term care insurance program to help purchase services and support for people who have functional limitations. The Act endeavors to form a new national program to provide affordable coverage for those who can’t get health insurance today because of pre-existing conditions. Under this, the insurance companies must spend 85 cents out of every premium dollar on medical services, thereby fostering the expansion of Medicaid and improving the Medicare. Under this, the young adults, till the age 26, are covered within their parents’ policies.
The Obama administration intends to attain this by creating mandates. As a self-sustaining public insurance option (that is financed not by tax dollars but by insurance premiums), this provides an alternative to and competes with private health insurance companies, on a level playing field. Additionally, the Act intends to eliminate the antitrust exemption for health insurers and medical malpractice insurers thereby fostering competition thus targeting the existing monopolies in the health insurance market. It aims to establish a new mandatory essential benefits package that shall become the minimum quality standard for employer plans, with the passage of time. The package places a cap for annual out-of-pocket spending, at a maximum of $5,000 per individual and $10,000 per family to prevent bankruptcies from medical expenses.
This Act requires the employers to either provide insurance to their employees or contribute to the cost of their coverage through the public plan/exchange, though the small businesses are exempted from this requirement.
Arguments regarding Constitutionality of HR 3962
The legal fraternity is divided between two schools of thought about the constitutionality of the Act. First school believes that the Act is unconstitutional and places reliance on Articles I §8 and V of the US constitution and on Tenth Amendment. They claim that their argument is supported by the celebrated case of MARBURY v. MADISON, 5 U.S. 137 (1803) and some federalist opinions. The second school of thought places reliance on Article I §8 and the celebrated case of McCulloh v. Maryland, 4 Wheaton 316 (1819); Steward Machine Co. v. Davis, 301 U.S. 548 (1937); United States v. Butler, 297 U.S. 1 (1936) and some federalist opinions. An in-toto analysis of these school of thoughts would conclude that the true interpretation of the word ‘general welfare’ in Article I §8 of the U.S. Constitution can only determine the constitutionality of an Act like HR 3962. Till date the court opinions have been more inclined towards Hamilton (Federalist 33, 83 etc.) and Story rather than Madison (Federalist 41, 45 etc.).
Simply put, when the government mandates welfare as a quid-pro-quo for premiums collected, such welfare translates to nothing but a tax liability for the country men. Such an attempt by the government to regulate insurance sector by masquerading as an industry player is inspired from socialism. I personally feel that socialism is a Marxian concept and may not go well in an economy with capitalist foundations. The good thing is that people all over the world should buy insurance; this however turns bad when the government forces people to do so.
What are the implications of HR 3962 on the Outsourcing industry?
The object clause to the Act states that it is meant to provide affordable, quality health care for all Americans and reduce the growth in health care spending.
In reality, the act is a victim of haste. Ideally if the intention of the Obama administration and the object clause of the Act were actually in-sync then the administration should have awaited a confirmed indication of the end-of-recession. The administration should have first looked at strengthening the fundamentals of the economy, by:
ü better regulating the existing insurance sector,
ü improving the US agrarian culture and making the country self sufficient regards its food requirements,
ü checking the cost-of-living index and
ü creating more jobs in the private sector.
But if the intention is to make more and more Americans dependant on Federal Government for basic requirements, then the attempt is bang on.
Impact on the outsourcing industry:
Prima-facie it may seem complex but there are clear indications for the outsourcing industry to benefit once the HR 3962 is implemented. The benefit roots from the fact that the employees will become expensive for the employers post this Act’s applicability. Now given the very competitive market scenarios, thin profit margin and the inability of the employer to transfer this increased cost to the end consumer, the employer is forced to search for the less costly alternatives. It is needless to say here that the Act magnifies the already existing labor arbitrage opportunities internationally. To appreciate the existing labor arbitrage opportunities you can refer to my older blog post.
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