Promises Promises

When is a contract a contract? When is a promise a promise? The answer in 2011 is “It Depends”.

Public employees have contracts. Some of their contracts promised adequate wages with really good fringe benefits and generous retirements. Almost all of their contracts guaranteed stability. Governments; cities, states and the feds, and public institutions such as schools, often took the easy route. Our leaders and elected officials pushed these payroll costs back twenty or thirty years when funding would be someone else’s problem. This strategy was so popular at the steel mills and the auto plants that it had to be a good idea.

The future is now.

Vice-President Dick Cheney once said the deficits don’t matter. And they didn’t. To him. In 2011, after ten years of unfunded wars, unregulated banking, and reckless spending, we are in a real mess. We could reassess our priorities and then align our income (taxes) to pay our bills, but that would be difficult. That would take courage. Instead, we tear up contracts, de-certify unions, and cut heating oil subsidies for the poor.

What does all of this have to do with the delivery of health care? After all, this is Health Insurance Issues With Dave. In a word, everything.

The recent election gave us Republican governors in Wisconsin, Ohio, etc… Elected to create jobs and right their ships of state, these new governors have chosen a different path. They have decided to target their public employees and to eliminate the unions that represent them. We are being told that these contracts are too expensive to honor. We don’t have the money. Their jobs, and the incomes that paid their bills, will disappear. The pensions they were promised may be gone.

Why is this different than government’s promise of health care? We haven’t properly funded the health care we have promised to the poor and the elderly. We have deferred the expenses and punted every time a difficult decision has been on the table. A quick example is the Medicare Doc Fix.

In an effort to make a dent in the fiscal mess that is Medicare, a decision was made in 1997 to control the escalating costs of medical care. The Sustainable Growth Rate was a payment formula designed to keep doctors’ rates in check. Unfortunately, the formula didn’t work in the real world. The adjusted payment rates would have forced a large number of doctors to not accept Medicare and to leave the system. One option would have been to correct the formula. Another option would have been to scrap the Sustainable Growth Rate and start over. Congress, Republicans and Democrats, chose a third option. They passed periodic fixes to the bill and pushed the tough decisions back for someone else to handle. The Sustainable Growth Rate was passed in 1997. How much have we saved to date? Nothing. The implementation is still getting postponed every month.

Is the Doc Fix a good idea? Would the Doc Fix solve Medicare’s problems? Probably not. But if Congress doesn’t get Medicare’s costs and funding under control, we will eventually be facing the same problems, and the same decisions, that the states are grappling with today.

Can the federal government be entrusted with more responsibility for our health care? What promises are too important to break?


This entry was posted in Uncategorized. Bookmark the permalink.

4 Responses to Promises Promises

  1. Holly says:

    Cuts have been made to medicare, cuts and cuts and cuts. Even cuts of what the insurance companies pay for service. I look at our statements. Ex. a recent one, $2,346 billed, $264.00 paid by insurance, cost to us, thankfully, $0. But what are hospitals, doctors, etc,doing to make up for this, advertising for more patients, serving more patients, sicker patients I may add because people are older, sicker living forever with so many problems. How are the hospitals dealing with less revenue, working with less, working with less staff and burning everyone out. The doctors are burnt, the nurses are burnt and soon the whole thing is going up in flames.

  2. Holly says:

    Like the new format, so much easier to post a reply..

  3. says:

    From our friend Michael:
    Please post.
    In medical parlance (Doc Fix) one quite often hears, “There’s a Pill for That”.
    Seeking a Sustainable Growth Rate — take Viagra.

    Michael – No Names Please

  4. Gabriel says:

    Quality related information! I have been seeking for anything like that for quite a while today. Thank you!

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.

This site uses Akismet to reduce spam. Learn how your comment data is processed.