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Hospitals Are For Sick People

July 14, 2011

We are a small business in the “high tech” business.  Our goal is “advancing the paperless office.” It’s a shame our company and so many companies like ours simply cannot afford to do business with the government.

Doing business with the government is  a paperwork and regulatory nightmare.  We don’t have the time, the resources, a team of consultants to guide us or a team of  lawyers to protect us, God forbid we forgot to dot an “i” or cross a “t”.

“That is why The Affordable Care Act is destined to fail. It’s unintelligible.  Just ask anyone who hasn’t read it.”

As a software development company which replaces paper with electronic records, we believe technology can and will solve many of the cost containment problems with healthcare.

The problem is government needs to get out of the way.  Forget about subsidizing doctors with taxpayer dollars for buying government mandated and precertified technology called HITECH.  The problem is there’s too great a cost and too much red tape for a small business to get into the game.

Worse, doctors are going to pay too much money from the select few companies that are willing to run the government gauntlet to become certified under Obamacare.

Let the free market work.  My company has 32 employees.  Healthcare costs are a growing concern for our small business.  We pay the employee’s healthcare in full which has risen on the average more than 10% per year per employee over the past several years.  In the process we are seeing benefits shrink and costs increase for both employer and employee.

This is a partnership between employer and employee.  Employers want to provide a benefit in the form of compensation, in particular with a pre-tax benefit to the employee.  Employees want quality affordable healthcare for their families.  We ask the employees to participate in the decision making process.  We collaborate to find the best available plan for the money.

One of my employees with a spouse and 5 kids says, “I might as well just hand my paycheck back over to you to pay for my family’s healthcare.”

As an employer I feel terrible about this type of sentiment, but I’m paying for the employee’s healthcare, plus the cost to shop and administer the plan.  There’s nothing in it for me but to try to remain competitive in the salary and benefits area with other employers.

The 2011 National Physicians Survey, conducted by Thomson Reuters/HCPlexus and polling almost 3,000 American doctors, shows that while Obamacare would raise spending, premiums, overall U.S. health costs, and debt, it wouldn’t raise the quality of American health care. Rather, by a margin of well over 3 to 1, doctors expect the quality of American health care to decline over the next five years, in the wake of Obamacare’s passage: Only 18 percent of doctors expect the quality of health care to “improve,” while a whopping 65 percent expect it to “deteriorate.”

Recall that Gallup recently announced that only 13 percent of Americans support ObamaCare as is.  I’m not blaming this all on the President, but you have to walk the walk to talk the talk.  The President doesn’t do either.

Health insurance cost is a moving target for small business. In 2010 we paid full medical benefits for 27 FTEs.   Our cost averaged $4,900 per employee per year. This is up only 5% over 2009 due to changing providers from Blue Cross to Humana, changing plans from a PPO to an HMO, higher deductibles and over 1/2 of the FTEs selecting H.S.A.s due to the cost to their families. Since there is really no competition between providers, Blue Cross, Humana and United Healthcare we have been switching from one to the next every 2-3 years based on the plans available and the economics. In 2011 the cost will has increased to $5,030 per employee until August when we will again negotiate a new and undoubtedly less desirable coverage. Keep in mind the impact is felt not only by the employer, but by the employee with spouse and children as well.

The answer to rising prices and declining benefits is to increase competition in the health insurance market.  Why do we need a new law to create healthcare exchanges?  Why can’t we lift existing regulations to allow competition across state lines?  Encourage, not put limits on Health Savings Accounts H.S.A.’s as the new Affordable Care Act does.  I pay for my employee’s health and dental benefits up to the monthly H.S.A premium. If they select a more expensive plan they pay the difference.  I have physicians who have discounted procedures 25% because they know I’m paying for their services out of my own pocket (at least until I reach the out of pocket maximum).  The emphasis at our company is to be healthy.  We have our own gym.  We have a cycling team for the formed to fight MS.  If an individual is making decisions on their own behalf with regard to their health and their health care costs, the cost of healthcare will  truly become more affordable.

The bottom line is we simply cannot afford to get sick.

Where common sense fails. disingenuous, dishonest, demagoguery prevails.

From PoliticalCalculations.com: Combined, the Top Ten recipients of this corporate welfare took 45.6% of the total $1,789,449,634 taxpayer dollars that were doled out, with the United Auto Workers taking the largest chunk by a wide margin, with $206,798,086, or 11.6% of all the taxpayer money that was allocated for the purpose.

Surprisingly, two telecommunication giants AT&T and Verizon took the second and third positions, with 7.8% and 5.1% of the total take respectively.

After that, three state agencies occupied the fourth, fifth and sixth largest positions—the Teacher Retirement System of Texas, the Georgia Department of Community Health and the California Public Employees’ Retirement System (CalPERS), the latter frequently in the news recently for corruption scandals and its massively underfunded pension liabilities.

The eighth and ninth ranks are taken up by the State of New York and the Pension Accounting Services Department within the State of New Jersey’s Treasury Department.  Corporate basket case General Electric, which has come to rely greatly upon government mandates, special protections, subsidies and bailouts for its revenue, rounds out the Top Ten with an even 2.0% of the total handout.

The remaining 1,305 entities collected the remaining 54.4% of the money paid out by the government to pay for the health benefits of people who chose to retire from their professions early, with the Minnesota Cement Masons taking the least of all the recipients, at 60 dollars.  Source: politicalcalcualtions.com


Why do politicians, the president the mainstream media and a plethora of celebs continue to make a silk purse out of a sow’s ear?  Not so at the Washington Times…

“The president’s own secretary of health and human services, Kathleen Sebelius, has admitted a major section of the Obamacare law is “totally unsustainable.”

“The now-familiar monthly trickling down of new waivers is, at best, a tacit admission that Obamacare is a failure. So far, seven entire states and 1,372 businesses, unions and other institutions have received waivers from the law. The list includes the administration’s friends and allies and, of course, those who have the best lobbyists.”

“More than 50 percent of the Obamacare waiver beneficiaries are union members, which is striking because union members
account for less than 12 percent of the American work force.”

“But the political payoffs don’t stop there. The Obama administration  didn’t forget its closest friends in the latest round of waivers. Although  there are 435 congressional districts across America, nearly 20 percent of the new waivers, amazingly, found their way to a single district – Mrs. Pelosi‘s.   As for Mr. Reid,  well, the entire state of Nevada found an early waiver in its Christmas stocking.”

The answer is they have no real stake in the game.  Politicians and the President want to be re-elected.  Their own constituents get a pass.  They don’t pay for their own healthcare. The mainstream media and celebrities and their Cadillac health insurance plans can afford to pay more.

The small businesses and their employees are left to deal with big government mandates already proven to unpalatable to 3.1 million individuals exempted from the plan, of which 1.55 million are in union plans. Those who received waivers and those who pay no taxes are going to continue to vote in favor Obama, Pelosi and Reid.  They have held the keys to the kingdom and skyrocketing debt too long.

If you are a taxpayer, do something.  Lean hard on federal, state and local politicians to come up with a better answer to the high cost of healthcare than the Affordable Care Act.

Ask your physician to cut you a break on your healthcare costs.  Negotiate with every insurer who offers healthcare in your state.  Look for plans which cover individuals and their families outside your employer’s plan(s).  Start moving.  Do everything you can to stay healthy.  Hospitals are for sick people.

6 Comments leave one →
  1. July 25, 2011 10:55 pm

    I was asked by employees today, “what is your plan in future years (in terms of compenasation) with regard to group insurance?” I basically said I would like to get out of the group insrance business, but I won’t if it has an adverse effect on my employees.. It almost has to be an “all for one and one for all” type of process employer and employees alike.. With Obamacare and government subsidies to individuals who join “insurance exchanges” conceived through Obamacare, the uncertainty and complexity continue to grow.

    • July 2, 2012 3:50 pm

      US Healthcare costs are too high and outcomes could be beettr. Agreed. But why would putting government in control of these issues solve the problem? Free markets have time and time again shown their ability to reduce costs and deliver higher quality. So why is it that people trust the market to deliver cheap plasma screens, but when it comes to something ever more important like healthcare we all start to second guess free markets, to our own detriment? The reason healthcare costs are high and outcomes less than ideal is because of government, specifically the tax system that favors employer-provider coverage. This puts employers and their chosen insurance companies in the middle of most healthcare transactions. When patients aren’t choosing their insurance companies directly, they lose their ability to discipline the bad ones through their choices. Similarly, when patients aren’t paying for their medical procedures directly, even small ones (because of the ridiculously low deductibles employer insurance plans give), they have little incentive to discipline the healthcare providers to give cheaper and beettr service. In other words, the consumer choice model that drives the benefits we see in free markets has been taken out of the healthcare equation by government. The solution, therefore, is not to add another layer of government on top of this. Rather, the solution is to re-empower the healthcare consumer.It is very simple. Just fully privatize the delivery of healthcare and get rid of the employer-provided-health-insurance-favored tax system. Then provide healthcare vouchers (if we are feeling charitable), the size of which increases the poorer you are, with which to purchase health insurance. This addresses the problem of poor people not having access. But also leaves the market free to operate efficiently and compete for peoples $$s and vouchers.As to people with pre-existing conditions, the answer is charity. Insurance, by definition, protects against the *unknown* bad events. Once the bad event becomes known, however, such as upon being diagnosed with cancer, then we aren’t talking about insurance anymore. Now we are talking about straight up charity, paying for someone else’s known medical condition. We can set aside some money for this. But the solution is definitly NOT to mess up the health insurance market for everybody else, by trying to force what is charity into an insurance model (which is exactly what Obamacare does).VN:F [1.9.7_1111]please wait…

  2. Jim Graber permalink
    July 16, 2011 2:58 am

    Good, lucid indictment of our alleged free enterprise system. We have allowed a favored few the ability to rig the system with barriers to entry, such as “professions”,licenses,excessive patents and intellectual property abuses, and artificially sustained oligopolies.

    These schemes,which are ostensibly designed to protect an innocent albeit ignorant public,are actually mechanisms to limit free markets and the innovation and competition that come with them.

    Sometimes, we’ve just got to look in the mirror.-Jim Graber

    • July 29, 2011 3:22 pm

      Thanks Jim. We live in fear of excessive patetnts being in the software business. There are companies that exist solely to sue company’s who’s technology is similar to their own without merit.

  3. July 14, 2011 4:46 am

    Great article, Al!

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