Health Care and the Supply Chain (Part 3): Maybe John Kerry was Right

While President Obama deserves credit for wanting to fix healthcare, he'd do well to understand that more people would feel better about his bold plans if we had some kind of track record on which to judge his performance. But he has already spent us into decades of debt with no proof that any of his ideas is anything more than a well intentioned wish. Last week, he pulled a Bush and announced that the stimulus package accomplished its mission. He should have paid more attention to President Bush's Mission Accomplished speech several years back and noted how that worked out.

In and of itself, passing legislation fixes nothing in the same way that simply signing a new procurement contract saves no money. Money is saved in procurement by effectively using the contract to insure that lower prices are paid. I once followed a person in a procurement job who announced savings when he signed a contract but then never followed through on the details to be sure the savings were actually achieved.

If the President and Congress are serious about improving health care there are intermediate steps that can be taken apart from monstrous legislation that no one understands. One of them is the creation of a catastrophic health care cost safety net as proposed by Senator John Kerry in his 2004 campaign for President. According to the June 4, 2009 issue of Business Week, Harvard researchers reported that 62% percent of all personal bankruptcies in 2007 were caused by health problems and that 78% of those filers had health insurance.

The fact is that health insurance plans have lifetime maximum caps and once the insurance company pays out an amount equal to the cap they are done paying. Some diseases and health conditions are incredibly expensive and will exhaust an insured's benefits. When that happens today, even if Medicare is involved, it will still leave a growing balance that is the responsibility of the patient and the patient's family.

Senator Kerry maintained that no one should have to go bankrupt over health care costs. This could be achieved if the government were to create a Catastrophic Cost Safety Net that stepped in and covered one hundred percent of health care costs once an insured's lifetime maximum was exhausted. There are obviously many details that would have to be explored but surely it would be a place to start before we just guess at what will fix health care.

- Lynn James Everard