I’m very torn about healthcare reform.  As a business owner smack dab at the epicenter of the effects of healthcare reform, it’s a very timely boon to our business.  As a taxpayer, although I think a lot of the reforms are necessary, I’m very skeptical about how we go about implementing and paying for it. And in many ways, I think so much more could have been done.

Good for business, but good for patients?
For Picis, healthcare reform and its companion legislation, the ARRA HITECH stimulus money, are going to spur tremendous growth opportunities. Today, the 32 million people that will soon be insured will end up going to the hospital emergency room for care under the EMTALA law (where hospitals aren’t allowed to turn away ER patients). The only problem is the hospital ends up footing the bill, putting pressure on their margins and reducing their ability to invest capital in IT and other systems. After covering 4 million more lives here in Massachusetts, we actually saw ER visits go up by 7 percent. Why?  We didn’t add any more primary care doctors, and these newly insured patients swelled the offices of the existing general practitioner population to the point where 56 percent are no longer taking new patients. So where do these patient go? You guessed it – back to the ER, but for an entirely different reason. They’re not going to the hospital to get the only free care they can get – they’ve now got insurance – they’re going because they can’t find a doctor to see them in the ambulatory setting.

Again, this greatly benefits our business – since the only way these much busier emergency departments and other hospital care areas can drive more efficiencies is through automation.  Add to that the fact that $46 billion of government stimulus money is flowing into a market whose publicly-traded, non-conglomerate collective company market cap is only around $17 billion.  And the expected cuts in Medicare will pale in comparison to the benefits. Why else did all the for-profit hospital companies shoot up 10 percent the day after signing?  So I’m very bullish on the effect of healthcare reform and ARRA HITECH on our business.

Show me the money – or at least where it’s going
On the other hand, the bill that was passed has some very big problems stemming from the lack of bi-partisan support – and the biggest is its cost and how it will be implemented and paid for.  Don’t get me wrong – I think the problem of the uninsured needs to be solved, because the current solution, where we’re forcing the uninsured to the ER to get the most expensive care, is untenable, and we all end up paying for it anyway.  And the denial for pre-existing conditions and some of the other patient-friendly parts I’m all for.  But I am extremely skeptical that this new extension of benefits across a broad swath of population can possibly end up being deficit neutral or even save money. And we already have an unfunded social security and Medicare liability of over $117 trillion (have you ever seen a number like that? – it’s three times the size of our entire economy!).  The HHS budget for 2010 is bigger than the entire budget of France!  And, mark my words – there is a public option hidden in the current legislation.  The HHS secretary has virtually unchecked power to experiment with pilot programs like the federal employee program as part of the healthcare exchanges. That’s a public option wolf in sheep’s clothing, according to some trustworthy contacts on the Hill, and I don’t doubt it.

Big swings, big misses
I’m also disappointed that Congress couldn’t get together and do some of the essential things that could have made this extension of entitlement programs more palpable. Tort reform is the first. Practicing defensive medicine causes a huge amount of waste and inefficiency in our health system with no improvement of outcomes.  We see it every day in our business as our tools are often used by hospitals and doctors in court to get their malpractice cases dismissed. Case in point:overused procedures, i.e. one in three births in the US today are done by caesarian section – way beyond anywhere else in the world. Secondly, allowing insurers to compete across state lines is a no-brainer to anyone with even basic economic knowledge. Ironically, in the bill that passed, after all the bashing of insurance companies, the bill authors let them continue pretty much business as usual with no new competitive forces to rein them in!  Thirdly, incentivizing hospitals and patients to run more efficiently with more pay-for-performance measures and reduced rates for healthier lifestyles would bring another huge reduction in costs. And I really don’t care if the Democrats or the Republicans are to blame. I say to them you idiots let a very imperfect bill get through. You let trial lawyer and insurance lobbyists stop you from putting responsible boundaries in the bill.

I think this is where the pundits get it all wrong. Most of us who live and work in the healthcare world know that something had to be done about the uninsured, the pre-existing condition denial and other key inequalities in our system. What many of us are upset about is that bill that was cobbled together in order to get rushed through ahead of the next election, is not a cohesive, logical plan where increases in care and coverage are met with responsible funding and cost containment. The sum of these parts is an incongruous amalgamation of special interests, one-off provisions, unbridled future costs and somewhere buried deep inside are some good things for patients.

- Todd Cozzens