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October 28, 2013

The Business of Obamacare Fails the Business Test

Steven R. Berryman

Democrat Congressman John Delaney from Maryland just went on record expressing his businessman’s perspective on the “Obamacare roll-out.” A roll-out is an insider term for bringing a product or service to market for the first time.


He suggested bringing the [equivalent of] the project managers and their contractors to accountability, then go fix the problems.


Of course, the White House and Hillary Clinton’s handpicked contractor for the Internet face of Obamacare, CGI Federal, will hear none of that! It was a glitch, they will say. Well, a glitch in the business, I would say...


This workmanlike proposition is noble and logical, based upon Representative Delaney’s storied corporate background; but then, does government follow any business model. Further, are they always seeking the most productive of outcomes in their various “projects?”


During the Great Depression, government projects actually defined “make-work projects,” as in the “Alphabet Soup” government programs like the WPA (Works Project Authority), the TVA (the Tennessee Valley Authority), and many others used to simply hand over taxed dollars to those needing jobs, regardless of need or usage of the actual job performed.


Even professional artists and actors had their champions in these make-work agencies.


So, not only will the forcing of a population to purchase a service – insurance in this case – serve as an anti-constitutional tax, as the U.S. Supreme Court ruled. It just plain won’t work for several reasons that are understandable, even at the layman’s level.


1) The European model of a social healthcare system works to a degree, though they suffer tremendous wait times compared with our current system. However they have caps on what can be charged for a specific treatment, test, operation, or service. A knee replacement may be but $1,000. Tonsils out may be $300. We typically charge many times more, hence the category of “medical treatment tourism.”


Under Obamacare, there are no price controls, so increases due to inefficiency in the procedural parts of the Affordable Care Act, and/or requirements for added coverage for wellness and preemptive procedures can be simply added to consumers price tag under Obamacare.


Witness what we have now, the bubble in the amounts of deductibles at all levels of coverage. Example: A poor family may receive a $3,000 subsidy for buying into a plan, but their family deductible for any payout at all may be $6,000. Guess what; they will STILL decline to be covered and accept any penalty, to be certain.


2) What they teach you at Insurance Theory Camp during week one of the 101 Level class is the theory of risk-pooling: Insurance is a financial balance between those who take out more than they pay in (in some cases nothing) and those paying in lots more that rarely if ever use the plans benefits. A healthy man or woman may go 15 years without so much as a check up, yet pay in tens of thousands of dollars for the privilege of having the peace of mind.


This part of what is a “fairness” principle that is unfair is uniformly not considered by liberals.


To date, those entering the Obamacare plans through the markets set up for exactly this have been those needing immediate medical attention, those very likely to actually use more of the plans payout than they pay-in, and those who don’t currently qualify for any insurance plan in the real world.


This may someday, under the threat of force, be rectified, but for years, the financial payout of this “start-up” Obamacare will be a cash killer for a government that is already broke!


3) Word will travel fast that – even under full implementation of Obamacare – that medical emergencies will still be treated upon request at emergency rooms. They will not turn away illegal immigrants, for instance, simply because they did not purchase the Obamacare card.


In the business world, before a project of any magnitude is launched, it is beta-tested, it is computer modeled, it is role-played, it is lab tested, it is subjected to honest scrutiny, and the results fairly examined.


Our CEO-in-Chief seems to have forgotten those steps!


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