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Sunday, March 28, 2010

Fine Tooth Analysis of the Healthcare Bill

Dear Friends and Concerned Citizens,

I will be going through the recently enacted Healthcare Reform Bill with a fine toothed comb--unlike the majority of our elected officials that voted on it--and will apply over 20 years of healthcare experience in the trenches as a surgeon, emergency room physician, and a primary care/urgent care provider in interpreting it and posting all relevant aspects of the bill as they affect all of us, including providers and consumers.

In the first 26 pages of the bill under Division A (Affordable Healtcare Choices), Title I (Immediate Reforms)the bill discusses setting up high-risk pools of those that have been denied coverage for a variety of reasons--especially pre-existing conditions--so that they may obtain immediate and affordable coverage.

The problem is that Congress has appropriated 5 billion dollars--not including collected premiums)--to pay for direct medical care provided to those individuals. Now that may sound like a lot of money, but remember, that money must also go to pay administrative costs as well as direct medical care. Since this is a "high-risk" pool of patients, that, by definition means that their medical care is going to be much more costly--but, since they cannot be denied or charged more than anyone else (remember it is supposed to be affordable)that means the money will come from the 5 billion dollar pool which will be burned through very quickly.

Now the second problem--that was never told to the public--is that when the funds run out, then the Secretary of Health and Human Services may " reduce benefits, increase premiums, or establish waiting lists."

Don't believe me? See for yourself and pay attention to the last paragraph:

14 (1) IN GENERAL.—There is appropriated to the
15 Secretary, out of any moneys in the Treasury not
16 otherwise appropriated, $5,000,000,000 to pay
17 claims against (and administrative costs of) the
18 high-risk pool under this section in excess of the pre19
miums collected with respect to eligible individuals
20 enrolled in the high-risk pool. Such funds shall be
21 available without fiscal year limitation.
22 (2) INSUFFICIENT FUNDS.—If the Secretary es23
timates for any fiscal year that the aggregate
24 amounts available for payment of expenses of the
25 high-risk pool will be less than the amount of the ex-
VerDate Nov 24 2008 12:56 Oct 30, 2009 Jkt 089200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H3962.IH H3962 rmajette on DSK29S0YB1PROD with BILLS
HR 3962 IH
1 penses, the Secretary shall make such adjustments
2 as are necessary to eliminate such deficit, including
3 reducing benefits, increasing premiums, or estab4
lishing waiting lists.

And that is just in the first 26 pages and 11 of those were introduction and table of contents!

John R. Vigil, MD


  1. I appreciate the hard work and thoughtfulness you're exercising in this endeavor. I think it would be especially helpful if you included some statistics in your critique.
    I know it will require much addition effort but without facts you only contribute to the chorus of opinion, viz. 'the 5 billion dollar pool which will be burned through very quickly.'
    For my part I'll be headed over to the CBO to see if I can find some figures on this :)

  2. STFU Memo,

    Thank you very much for your thoughtful comments. I have posted an article from Medicine & Opera regarding costs of medical care for 2007. I have also researched costs from the CBO and have learned that the real rate of increase in medical costs is about 5% per year.

    If we apply that rate of increase to the figures for 2007, then the costs for 2010 (before Obamacare) will be about 3.05 trillion.

    Five billion is 0nly 0.16% of 3.05 trillion dollars. If we take all the uninsured--which estimates range from 20-40 million--and for the sake of argument, pick 30 million, that accounts for about 14% of the population. If 86% of the population is "spending" 3 trillion dollars a year for healthcare, then 14% should spend about 430 billion dollars per year. Five billion is only 1.1% percent of the 430 billion dollars needed to provide healthcare to 30 million more insured. which means that 98.9% will come from collected premiums or about $14,000/person ($1166/month in premiums).

    But--since this is supposed to be an affordable alternative for the uninsured, there are only two alternatives:

    The rest of us subsidize the care above and beyond the pittance of $5 billion and whatever the government charged for premiums (which I'm sure will not be $1166/month) or the Secretary of Health and Human Services rations care and/or denies coverage.

    The second problem is that in the above analysis, I have made the assumption that those people will require the same amount of care as the "average" patient; however, we must remember that this group represents a "high-risk pool" with presumably pre-existing conditions and one can assume that their care will be somewhat above the "average"!

    Another interesting finding is that the same CBO figures estimate that the US currently pays about $7400 per year for health care per American. If that is true, then in the above analysis, we and/or the patients will be paying twice as much for their care from the government as we should be!

    If we apply that same $7400/person to the 30 million uninsured, we see that we would still need at least $222 trillion dollars to care for them, which again, is far more than the 5 billion appropriated by our generous congress!