According to a report from The Center for Public Integrity, which produces original investigative journalism on public issues, there are over 45 million Americans who lack health insurance. Politicians of all political outlooks have constantly promised Americans a plan for health insurance. Nothing has happened.

President-elect Barack Obama made health care a critical part of his election platform and is now a central facet of his presidential agenda. I can assume that with the current economy, there will be opposing forces of “we can’t afford it” and “we need it for the unemployed”, so it still will not be easy.

Obama’s plan has several goals in mind, some of which have substantial effect on medical products industry. The plan claims that it will save up to $2,500 (I assume annually, but it’s not exactly clear) as it phases in:

• Lower drug costs through higher imports from other countries, increasing use of generics, and “taking on drug companies that block” importation of cheaper generics. Analysis: Generic drugs should be used whenever possible is not in question. However, the importation of generic drugs that violates the intellectual property of proprietary drugs still on the market is problematic--it could have the unintended consequence of actually increasing the price of non-generic products since the return on investment time period for non-generics may shorten.
• Require hospitals to collect and report health care cost and quality data. Analysis: I personally believe that the gathering of data has a long-term benefit, but I remain unconvinced how this may actually add anything to the $2,500 savings, especially since there is not a lot of choice in which health care provider one may utilize.
• Reduce the costs of catastrophic illnesses for employers and their employees. Analysis: This will be helpful to everyone, but unless the government takes on the responsibility (which has a cost), then it cannot provide any benefit that adds to the $2,500.
• Reform the insurance market to increase competition by taking on anticompetitive activity that drives up prices without improving quality of care. Analysis: This is very popular with politicians, but the insurance companies, though not exactly altruistic in their decisions, are constrained by the higher costs at the provider level.

The most important part of President Obama’s health care strategy is to make health insurance available to the largest group of Americans possible. He proposes the following:

• Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums.
• Create a new Small Business Health Tax Credit to help small businesses provide affordable health insurance to their employees.
• Lower costs for businesses by covering a portion of the catastrophic health costs they pay in return for lower premiums for employees.
• Prevent insurers from overcharging doctors for their malpractice insurance and invest in proven strategies to reduce preventable medical errors.
• Make employer contributions more fair by requiring large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payroll toward the costs of their employees' health care.
• Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.
• Ensure everyone who needs it will receive a tax credit for their premiums.

In the end, a better healthcare insurance system benefits the public and helps the medical products industry. Physicians and hospitals that get reimbursed for more patients, even if the reimbursement is reduced, only helps this industry. Small businesses along with the unemployed are the most helped by this proposal. This is good for the medical products industry.

By Michael W Simpson

Tags: Healthcare policy, Obama, Managed care