The other day I got an email from the salon where I get my hair cut. They wanted to let me know they're moving to a new location — a much bigger space. Uh-oh, I thought. And indeed, at the very end, the email said just what I suspected — that as a result of the bigger space, the cost of a haircut would increase $5. I’m not happy about the price increase, but I can't really blame them. They're doing what any business does: passing the cost of their higher rent onto the customer. I think health care works the same way.
Last week the Senate Finance Committee released its health care reform proposal. To pay for universal coverage, the committee’s recommendations mainly came down to pushing the cost of change back into the system. The proposal does little to fix why the costs are high to begin with. It offered no remedy for the high costs of prescription drugs (biologics can cost up to $200,000 per year); repeat billings for the same procedures (like having an MRI twice in the same month because your doctor’s don’t all know each other and talk to each other); and other issues that are plaguing health care.
See, the Senate Finance Committee's idea to pay for reform focuses on new fees on insurance companies and drug makers. This is like taxing car insurance because the mechanics and the factories that make car parts have increased the cost of fixing cars. We know who pays for everything in the end: us, the consumers.
Okay, I work for a health plan, but help me understand this: Doesn’t the Senate know that imposing a tax on health plans just makes coverage more expensive for people? Because the health plans have to pass on that cost of doing business. Sixty-one percent of private health plans are nonprofit — they don’t have a way to absorb this cost. And if the Senate thinks for-profit plans will just reduce dividends, they are not being realistic.
Would it be possible for my salon — where I love getting my hair cut — to keep their prices the same even if they're paying more rent? You know the answer.
Taxing the “messenger” of increased costs does nothing to reduce medical spending or fix the real problems with the system, plus it just makes private coverage more expensive for people. The cost problem will just continue to get bigger. That doesn’t sound like real reform to me.
Thinking about the “big picture,” what really matters? What will have a transformational effect?
Get ideas and share your thoughts at our Facebook page.
