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Copyright © 2012

People, Places, Processes & Products that Influence the Supply Chain

 

INSIDE THE CURRENT ISSUE

March 2010

Fast Foreward

Winners and losers

Healthcare reform is dead. Long live healthcare reform.

With no disrespect to Western European royalty customs intended, attribute the former to the meaningful and the latter to the peripheral.

So what went wrong?

At association conferences and trade shows, such as AHRMM, IDN Summit, World Research Group’s World Congress, and others, plenty of deep and thoughtful discussions and debates about the issues took place. Too bad none of that intelligence made it to Washington, whether elected, appointed or merely hand-delivered by a handsomely paid lobbyist.

What Capitol Hill and The White House, as well as their teeming hordes of apparently clueless-to-real-life-among-mortals-at-the-base-of-Mount-Olympus advisers seemed to forget or simply overlook is that with anything you’re going to have winners and losers.

Even in the nonsensical political theater known as diplomacy where compromise is king there are winners and losers because ultimately nobody gets what they truly want. Healthcare is no exception.

Poke your finger into a well-inflated balloon and you create a latex protuberance on the opposite side. Poke too hard and … well, you know the consequences.

From an orthodox perspective, the supply chain works this way: The sellers want to sell as much product as possible at the highest price to generate the most amount of profit. The buyers want to buy as little product as possible at the lowest possible price (free is good, too!) to protect the bottom line and look like heroes. Typically, they meet somewhere in the vast middle where everyone cheers, clinks goblets and declares themselves the winners. Who said basic economics couldn’t be a spectator sport?

Everyone between the two factions in the negotiations realm either tries to satisfy one of the sides as best as possible or they merely get in the way.

Because people get hurt or sick, providers consistently need to buy products so they lose leverage there. But competition sans collusion can help keep sellers "ethical" and "honest" so they lose leverage there.

In healthcare, or health insurance, reform, the fundamentals are similar.

Obama, akin to the Clintons before him, wanted to insure the uninsured, restrain spiraling healthcare costs as well as insurer and product supplier profits and revenue, and increase healthcare access and process efficiency. All at the same time. Had he been able to accomplish all of this concurrently, he would have been regarded as a domestic super-hero. But simple business logic turned out to be his green kryptonite. Why? All of these sides represent competing interests so one or more groups would have to win at another group’s expense. Shattering goblets.

1. Require resistant citizens to buy insurance they don’t want or can’t afford and you pad insurance company profits at the expense of those who fear severe income loss or federal parenting-enforced behavioral changes.

2. Force insurance companies to cap or reduce their profits or pricing via outlawing rejections based on pre-existing conditions or allowing interstate enrollment and you run afoul of the capitalistic free-enterprise economic system developed and managed by this democratic republic of ours. Of course, you might argue that the automotive manufacturer and banking/finance industry bailouts set the precedent. But you also force these payers to restrict reimbursement and ration coverage. Eliminate the insurance industry entirely or bestow "not-for-profit" status on it only invites even more vitriolic pandemonium.

3. Cap or tax the sales of product manufacturers only forces them to restrain research and development and hike prices, which ultimately are passed onto the payers and citizens directly.

4. Encourage ordinary citizens (either through education or punitive fees or taxes) to live more healthy lives as a way to avoid using healthcare services theoretically prevents providers, payers and manufacturers from making money. Plus, Americans see this as teenagers (or toddlers) being told by an exasperated dad and mom to behave and obey.

So what’s the answer? Simple. Someone has to lose. Pick one. Let it play out and then adjust the plans and processes from there. Pacifying everyone merely keeps us sucking our pacifiers. Or thumbs. We know better and can do better.