The Struggle Behind the Scenes Over Health Care Reform

CMD's Senior Fellow on Health Care, Wendell Potter, spoke at the Armand Hammer Museum in Los Angeles about the ongoing struggle over the implementation of the new health care legislation. Coverage of the new law has been minimal lately, pushed off the front pages by the oil disaster in the Gulf of Mexico, but a lot has been going on behind the scenes. Even though Congress passed, and the president signed the new healthcare legislation, we still don't know how it's going to be implemented, because the legislation only lays out Congressional intent. Numerous regulations must now be written to govern the business of healthcare in America. Parts of the new law could still be invalidated by the courts, or repealed by future members of Congress. So what is going on behind the scenes, anyway? Big insurers are quietly working very hard to preserve the status quo, just as the big banks are doing with financial reform.

To do that, they are trying to influence regulatory processes at the federal level, including heavily lobbying the organization charged with writing most of the regulations, the National Association of Insurance Commissioners (NAIC). Big insurers are struggling for the freedom to keep spending less and less on medical care, because every dollar they don't spend on medical claims means more dollars paid to shareholders and CEOs. Insurance companies are pulling out all the stops, Wendell says, including trying to manipulate the very definition of the term "medical care." They are pressuring the NAIC to let them shift a lot of what the companies now count as administrative expenses into their "medical expense" category. If that happens, the insurance companies will look like they're spending more on medical care, without really changing any thing at all, and that meets their goal of assuring no real change occurs at all.


Is this the case of unintended consequences? If you are the insurance company and your survival is at stake, then I'm sure that you will expend a significant amount of time and energy to keep yourself alive. I don't buy that they are just trying to pay off the exec's so much as trying to figure out the boondoggle of legislation that the health care bill is.

As the old saying goes, 'the devil is in the details'. The health insurance industry is simply doing what all administrators in any field do namely expoliting loopholes. In the UK several years ago new rules were introduced saying patients must be seen treated and admitted from the emergency room to a hospital bed on a ward within 4 hours. The response of many hospitals was to bring beds down from the ward to the emergency room, stick patients in them and claim the target was met. As a result they got big bonuses. Patients received no better care and it cost a lot of money. So all I can say is keep shining a light on the details and don't let anything go without publicity.

A very informative post about the sad state of the healthcare system, for many years now there has been no concrete solution regarding the said problem. It is high time for the government to step up and start solving this problem.

The new set of rules for health care reform has been most confusing, for the public and for insurance companies. Unless we get more involved in the struggle for true health reform, all the new rules would just be unrealized. We should get more involved in pressing for implementation of the rules.