A Dissection of the Senate Health Care Reform

Assuming many Americans have not had time to do research, I am compiling information from studies and government
sources, adding questions to assess logic and ideas generated from many sources for solutions. If the Senate is
embarrassed enough that it must vote in the middle of the night, I can certainly stay up all night and analyze it.

Linda de Sosa
US Citizen and Texas Resident 12/21/09

First, why do we need it?

Possibilities mentioned are
a. The US Healthcare system is not good
b. The US Healthcare system is good, but not enough people have access
c. The US Healthcare system is good, but healthcare or insurance costs too much

What is the quality of the US health care system?

1) Look at Infant mortality (percentage of infants not living to one year of age)
The US rate is high, relative to other countries (6.8%)
What are the causes?
d. Higher rate of very low birth weight infants in US (12.4%) and rising rapidly
i. Primarily teen mothers and mothers 40+ (Source: CDC study)
ii. For older mothers, directly related to higher multiple births (fertility treatments, not lack of
health care)
iii. Younger mother analysis
1. Mothers younger among American Indian, black, Mexicans, and Puerto Ricans
2. Mothers younger in Alabama, Arizona, Arkansas, DC, Georgia, Louisiana, Mississippi,
Nevada, New Mexico, Oklahoma, South Carolina, Tennessee, Texas.
iv. US infant preterm mortality rate is actually higher than other countries, indicating better health
care
e. Decreases significantly if we could reduce low birth weight – suggests improved access to prenatal care
for teens and improved teen pregnancy prevention programs
f. Small rate variation due to US increased definition of live birth
i. Several countries do not consider a birth live unless it is over a certain weight or gestation week
– Norway, Czech Republic, France, Ireland, Netherlands, Poland
ii. Accounts for some, but not large amount of our lag
g. The top 3 causes of infant mortality (equally 43% of the cases) are congenital malformations, disorders
leading to low birth weight and gestation, and sudden infant death syndrome.
Therefore, infant mortality does not indict health care quality itself.

2) Look at average age at death in US

a. Not a valid measure of quality of health care
i. If you compare the death rate of a tribe of motorcyclists riding fast without helmets with a tribe
that walks everywhere, which one would have a lower average age at death? Have we even
discussed health care?

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 b. Average age at death is a function of life and habits, not health care
i. Stress, Obesity, smoking, bad nutrition, sedentary lifestyle
3) Look at innovation
a. 50% of pharmaceutical patents come from US
b. Large percentage of Nobel prize winners in medicine (84%)
c. CT and MRI machine quantity relative to other countries
d. Where are the best medical centers in the world – where do people go when they need help from all
over the world?
e. Example of Von Hippel Lindau clinics (rare disease)
i. 11 countries have clinics to treat
ii. 10 countries have 11 clinics
iii. The US has 28 clinics, 3 in Houston alone.
4) Ignore UN comparative measures that are politically charged and based on invalid criteria
a. Example – heavy deduction for “fairness” where a country would receive a higher score for 2 persons
dying since they had equal treatment versus one living.
b. High rating for Cuba with such a broken system outside the capital that they don’t even have bandages.
5) Do health insurance companies receive obscene profits?
a. The latest study showed they only received 2.2% profit, down from 6%. That is substantially less than
most industries.
b. Since the companies are public, the profits actually go to shareholders
c. Profits from others in the health industry are used for research and breakthroughs that can fuel future
profits.

Rather than bemoan our health care system, we need to increase access

First, we need to understand the problem

Here is an analysis of health insurance (Source: Census bureau 2008)

301.4millio
Total people n
Insured 255.1 84.6%
Not Insured 46.3 15.4%

Government Care 87.4 29.0%

Medicare 43
Medicaid 42.6
Other (VA, government employees) 1.8

Private Health Care 201 66.7%

Employee 176.3 58.5%
Private Pay 24.7 8.2%

Of the 46.3 million not covered, why?

Make over $75,000 so assume voluntary 7.5
Eligible for Medicaid or CHIP for Children 14

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 Illegally in Country 9.5
Other 15.3
Of these, young invincibles 4.7
Therefore, those who are involuntarily
uninsured are a segment of 15.3 million

The uninsured are disproportionately in the South and West, American Indian, and Hispanic (30.7%). Even discounting
the illegal proportion of Hispanics, a Hispanic cultural bias against insurance was indicated. In addition, the states with
the highest percentage of involuntary uninsured are Texas, New Mexico, Louisiana, Florida, Arkansas, Arizona,
Oklahoma, Mississippi, and Alabama. Analysis shows that the difference in state income per person was also a large
indicator. In other words, these states have lower incomes per person and so fewer people can afford insurance.
Therefore, these states would need more financial help if they are going to increase their percentage of people insured.

Conclusion: We have a great system, but we must increase access and lower costs.

So, does the Senate bill do this?

How to evaluate any bill

1) Does it fix the problem or meet the need without injuring other parties?
2) Is it Constitutional?
3) Is it something the nation can afford?

Does it fix the problem?

1) The bill raises taxes.
a. Cost analysis below shows cost overruns.
b. Health care subsidies for poor
c. Those who choose not to get insured are penalized (or jailed!)
d. Taxes high cost insurance plans, except for those who lobbied for exclusion
2) The bill penalizes seniors
a. There is a 21% decrease in payments to providers who accept Medicare
b. Currently, 50% of doctors do not accept Medicare alone because it reimburses 8% less than the cost - so
that number will increase.
c. Kelsey-Seybold Clinic, the largest private multispecialty physician group in Houston, does not accept
Medicare without additional insurance. If this number decreases further, then either seniors will have to
pay more, or their care will have to be rationed.
d. Lower Medicare Advantage subsidies - $118.1 billion over 10 years (page 30 CBO)
e. Holds future provider payments to less than inflation. The CBO states on page 19:
i. It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it
would be accomplished through greater efficiencies in the delivery of health care or would
reduce access to care or diminish the quality of care.
3) Those on Medicaid will be penalized.
a. Fewer doctors accept Medicaid than Medicare since Medicaid pays only 72% of Medicare. When that
decreases substantially, Medicaid patients will have few options.
b. Only 40% of doctors will accept new Medicaid patients.

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4) The bill will lead to decreased numbers of doctors and increased patients, leading to rationing.
a. If the potential income for a medical career decreases, fewer people will train as doctors
b. Current doctors will explore other options, which has already happened. Many OB/gyns have switched
careers due to the high malpractice insurance.
c. There already is a current shortage of general practitioners
i. If current trends continue, the U.S. will be short by about 125,000 family care doctors by 2020,
according to Dr. Ted Epperly, president of the American Academy of Family Physicians board.
(msnbc.com, Wed., June 24, 2009)
ii. There are huge wage differences between specialists and generalists.
1. The difference is driven largely by Medicare-related reimbursement rates, which pay
more to doctors who perform specific procedures than to doctors who diagnose and
treat general illness.
5) The bill leaves 23 million people still uninsured. (CBO estimate)
a. Deducting 9.5 million unauthorized aliens, we have 13.5 million still uninsured. That is nearly the
number we currently have involuntarily uninsured.
6) The bill will increase unemployment.
a. Requires businesses over 50 employees to provide health care
i. If you have a business, would you want to receive a profit?
ii. If your costs were going to increase since you were required to pay for healthcare, how would
you balance that? Chances are good, you would decrease your number of employees.
THEREFORE, unemployment goes up under this plan.
b. The bill would supplement the cost of insurance for those who earn up to 400% of the poverty level
($22050 for a family of 4 in 2009). For a family of 4, that would mean anyone earning up to $88200
would receive help paying for insurance. When someone uses that supplement, their employer is fined.
Therefore, many employers will either lay people off or make them temporary or contract workers to
avoid this.
7) Our premiums will increase.
a. Younger persons no longer get discounts based on the fact they are less likely to need services (as in
auto insurance) Compare New Jersey (where this already occurs) vs Pennsylvania rates to see evidence
of this.
b. Insurance companies will be required to cover everyone, even those with major expenses, spreading the
costs to everyone.
c. WellPoint insurance company evaluated its actuarial data in the 14 states where it runs Blue Cross plans
for small businesses and individuals (which is more meaningful than aggregating the data nationally).
Premiums went up by as much as triple for some ages when cost differences could not be used to price
the policies. (WSJ, October 28, 2009).
8) The bill is unfair.
a. Critical that we do not get into a situation of shortage since if allocation is needed in times of
shortage, proposed “Complete Lives System”
a) Complete Lives System by Dr. Ezekiel Emanuel, top medical advisor to Obama and brother of
Rahm Emanuel, White House Chief of Staff
b) Quoted in the Lancet, Volume 373, Issue 9661, pages 423-431, 31 January 2009
a. Prioritise adolescents and young adults over infants due to previous investment in
education and parental care as well as developed personality

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 b. Prioritise those with better prognoses, even if young adults, so do not spend
disproportionately large amounts of resources
c. Older adults have already lived their lives and have had the opportunity to be the age of
young adolescents so lower priority
b. Requires everyone pay close to the same amount for insurance
i. Young subsidizing the old (in addition to current subsidies in payroll taxes)
ii. Young need average of only $1500 per year in health care
iii. Penalized if don’t take insurance ($750+ or jailed)
c. Currently, the legislative branch controls the guideline and rule setting process as designated in the
Social Security Act.
i. State programs, auto insurance programs, state worker comp programs all use these
guidelines
ii. The current health insurance reform program shifts these rights to Health and Human
Services (Senate) and a Health Choices Commission (House), both of which are directed by
the White House (Lack of oversight, no judicial review)
9) The bill creates more bureaucracy.
The House health care plan creates 111 new bureaucracies. (I have the sections and
page numbers for each)
The Senate health care plan creates 118 new boards, commissions, and programs.

It is not constitutional.
1) Making health insurance mandatory is not constitutional
a. There is no power in the Constitution to force this.
d. Not the equivalent of auto insurance since you can choose not to drive
e. Even car insurance only requires liability insurance, not comprehensive
6) Some have said that the Preamble statement, “promote the general welfare” covers this.
a. The preamble does not confer any power to the government, however.
i. Jacobson v. Massachusetts, 197 U.S. 11, 22 (1905) ("Although th[e] preamble indicates the
general purposes for which the people ordained and established the Constitution, it has never
been regarded as the source of any substantive power conferred on the government of the
United States, or on any of its departments."); United States v. Boyer, 85 F. 425, 430–31 (W.D.
Mo. 1898) ("The preamble never can be resorted to, to enlarge the powers confided to the
general government, or any of its departments. It cannot confer any power per se. It can never
amount, by implication, to an enlargement of any power expressly given. It can never be the
legitimate source of any implied power, when otherwise withdrawn from the constitution. Its
true office is to expound the nature and extent and application of the powers actually conferred
by the constitution, and not substantively to create them."

The cost of the health care bill is vastly underestimated.

1) Analysis of the CBO Dec 19, 2009 report clearly shows this if you read the fine print.
a. The cost estimate of $871 billion does not include $10 billion for IRS infrastructure changes (page 12),
$10 billion for HHS changes (page 12), or increased costs to the states of increased Medicaid enrollment
($26 billion+ – fine print on page 23) as specified by the CBO
b. Assumes that Congress will pass the 21% decrease for Medicare payments. They have not been able to
do this for the past several years politically nor is it viable since the costs are already higher than the

Linda de Sosa, Houston TX

 current payment. CBO notes this as well as the fact that it continues to hold future cost increases to less
than inflation. This adds $186 billion to the cost.
c. They also question a seemingly random number for savings in Medicare.
d. New CLASS Act, which creates a long term insurance program in this bill, starts collecting premiums
which will be needed to pay out benefits later. However, they are unfairly using these premiums ($72
billion) to offset the cost of the health care bill. CBO also is unsure if this program will be successful in
any case.
e. The bill starts collecting taxes and penalties long before the benefits are paid out. If one ignores the first
5 set up years and looks at just the 2 nd 5 years, the net revenue is $21 billion. If we double that number
to equal the revenue for years 5-15, the revenue is $42 billion, not the $132 billion touted by the CBO.
f. $46+186+72 = $304 billion undercounted against $42 billion revenue. This does not take into account
the fact that all the revenues are random guesses as to who will continue with their Cadillac plans and
who will pay penalties rather than purchase insurance. In the words of the CBO, “The same substantial
degree of uncertainty that surrounds CBO and JCT’s estimates of the impact that the proposal would
have on insurance coverage rates and the federal budget also accompanies this analysis of the
proposal’s effects on premiums.” http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf
2) Health and Human Services Department Analysis (nonpartisan governmental entity) found that:
Nation’s Health care bill will increase of $234 billion over 10 years
Unrealistic to squeeze $493 billion in savings from Medicare over 10 years
New Long term care insurance (CLASS) plan faces a significant risk of failure
3) CBO (Dec 19, 2009) doubted that the nonprofit insurance companies would materialize (what is the incentive to
create them?)
4) Previous health care bill cost estimates have been historically underestimated
(WSJ, Oct 20, 2009 – Health Costs and History)
a. Medicaid – House Ways and Means Committee estimated first year costs of $238million. Instead, it was
$1 billion. Current cost: $251 billion.
b. Medicare – 1965, congress said it would cost $12 billion in 1990. It was $90 billion. Hospitalization was
supposed to be $9 billion, it was $67 billion.
c. The costs are nearly always higher because of the entitlement nature of it.
d. One exception is the 2003 Medicare prescription drug bill. Costs are 1/3rd below projections due to
lower than expected participation and because of savings from generic drugs due to competition
occurring in the private market where people are selecting less costly drug plans. This illustrates the
benefit of letting the private market operate rather than the government controlling prices.

What about endorsements?

It is important to look at the groups endorsing it and their incentives
1) The AMA endorsed the bill
a. Current law causing 21% cut in physicians’ reimbursements. They hoped to avoid it.
i. Actual law required 5-6% reduction, but Congress has rolled this over each year so 21% is
what they are currently up to and has been used to blackmail doctors’ organizations
2) AARP endorsed the bill
a. Main supplier of insurance that covers the gap between Medicare and actual costs.
b. Bush 43 passed Medicare Advantage program which is a subsidized lower cost alternative to
Medigap. 10 million seniors switched, hurting AARP income.
c. Current bill eliminates this subsidy so seniors will have to pay more and AARP will make more.

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 3) Pharmaceutical companies endorsed it
a. Got a 10 year limit of $80 billion on cuts in prescription drug costs
b. Got assurances that the government will bar low cost drugs from Canada and abroad
4) Medical device manufacturers DID NOT endorse it
a. As a result, the Senate Finance Committee imposed a tax on medical devices like automated
wheelchairs, pacemakers, stents, prosthetic limbs, and artificial knees and hips.
5) The conservative Democrats
a. Ben Nelson held out his vote until he received $45 million so Nebraska will not have to pay the new
Medicaid funds that all the other states must pay.
b. Mary Landrieu held out her vote for $300 million for Louisiana

CONCLUSION:

Linda de Sosa, Houston TX

This bill should not be passed. We have issues with health care costs and access that must be
addressed. This bill, however, has so many negatives, it could dangerously hurt our excellent
health care system and damage our struggling economy. Instead, we should directly address
the cost and access issues with the suggestions on the following pages.
Cost savings suggestions
Indicated Solutions to improve access (besides lowering cost of insurance)

Educate and enroll those who are already eligible for Medicaid – streamline procedure
For younger, make it easier to enroll so increase the age where they are eligible to be on their
parents’ plan to 26
Educate the Native Americans and Hispanics on the benefits of insurance
Focus subsidy dollars for insurance in states with lower income per person.
Those who are involuntarily uninsured have fewer checkups, blood pressure checks, flu shots,
and preventive tests like mammograms and pap smears. Low cost clinics could provide these.
Consider increasing the minimum eligibility income for Medicaid
Current eligibility is set by each state, but the minimum requirements are
1) Meet Aid to Families with Dependent Children eligibility
2) Pregnant women and children under 6 with income at or below 133% poverty
a. Poverty level currently $10, 830 for a single person and $22,050 for a family of 4
3) Children 6-19 with family income to poverty level
4) Caretakers for those with children 18 and under
5) SSI recipients (disabled)
6) Those living in medical institutions with monthly income up to 300% of SSI income
7) Medically needy (pregnant, children, blind) with too much money to meet the requirements above
Increased access for those with medical issues

1) Guaranteed renewal protection (encourages to get insurance when well)

2) High risk pools
a. Ie, Texas has a high risk pool where the maximum premium is 200% of regular

How do we lower health care costs?

1) The current bill incorporates many savings that should be adopted.

2) Tort Reform reduces costs to doctors
a. Statute of limitation
b. Cap noneconomic damages to $250,000
Examples of success
Texas (Perryman Group study in April 2008, added 430,000 Texans to rolls
http://www.tlrfoundation.com/perryman-group-report
Unnecessary tests to protect the doctor
c. Medical malpractice records across state lines
Encourage discipline of incompetent doctors rather than relying on self-policing
d. Trial lawyers will lobby to not have this happen.

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3) Simplify administration
a. Standardize electronic exchange formats and sharing for information between patients, providers,
and insurance companies
b. Enhance information sharing between healthcare providers on patients
i. Example – Amalga
c. Email benefit summaries
4) ER Analysis
a. What conditions are more serious, treat accordingly (see Superfreakonomics p77)
b. Immediate payment required for noninsured, nonemergency cases
i. Encouragement of low cost clinics
1. Incentives for doctors
2. Locations in pharmacies, low income places, schools, churches
c. Federal data show that elderly and mental illness/substance abusers are the most frequent users of
the ER. (HHS Medical Expenditure Panel Survey)
i. Study ways to lower their visits
5) Improve health care fraud enforcement
a. Utilize technology and manpower
b. Current fraud estimated at $47 million in a federal report (Houston Chronicle – Questionable
Medicare Claims hit $47 billion Nov. 14, 2009)
i. States that aggressive action to date has yielded little improvement
c. Focus on centers of high fraud
6) Examine barriers to cost reductions
a. Nongovernmental panel of players
b. Identification of legal barriers
c. Incentives for more treatment, not results
i. Currently make more with the more treatments, ie oncologists make half income from
chemo
ii. Hard to tell patients the truth about odds. Perhaps have cancer consultants who can lay out
the benefits vs the risks. Many solid mass tumors hardly respond. Lots of pain for 1-2
months of additional life. Lay it out realistically and let the patient decide.
d. How do we reward innovation?
i. Marc W Kirschner, Elizabeth Marincola, and Elizabeth Olmsted Teisberg, The Role of
Biomedical Research in Healthcare Reform, Science 266 (October 7, 1994)
ii. Biodesign Innovation among business people, doctors, and engineers (Stanford professor –
Stefanos Zenios)
1. Expand access by reducing costs
7) Examine causes of health issues and seek to improve
a. CT Scanners may cause 29,000 future cancers – 2 studies by the National Cancer Institute (Amy
Berrington de Gonzales) and UCSF as cited in the Archives of Internal Medicine
i. Variation of doses between machines and operators
ii. Nonexplantion of risks and overprescription – Need cost-benefit analysis each time
b. Teen pregnancy prenatal care and prevention
c. Obesity, smoking, and stress reduction
i. Tax deductible weight lose programs

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 ii.Find alternate uses for tobacco to maintain jobs, but lower smoking (ie hemp for marijuana)
iii.Physical education for children
iv. Nutrition information
v. Incorporate rewuired wellness and disease management programs into Medicare, Medicaid,
and the VA
vi. Provide employers with incentives for implementing wellness programs
d. Well care covered 100%
e. Insurance programs offering vouchers for appointments
f. SIDS causes and prevention
g. Information on causes of congenital malformations (like smoking and alcohol)
h. Increase information on the necessity of prenatal care, especially in high risk states like Texas and
Tennessee
8) Examine methods to reward results
a. More doctor interactions actually increases mortality rate (see Superfreakonomics p82)
9) Reimburse Medicaid and Medicare at the same rate as the Federal Employees Health Benefit Plan
10) Remove the limit on medical care costs for itemized deduction tax filers

How do we lower insurance costs beyond reducing health care costs?

1) Increase competition
a. Compete across state lines.
i. University of Minnesota Steve Parente additional 12 million enrolled
b. Web portal to ease comparisons between policies for individuals and employers
2) Spread Risk
1) Small businesses pool together to purchase insurance to spread risk

3) Study possible tax credit enhancements to help reduce the cost of insurance
i. Tax Credits for insurance costs for employers and individuals
1) Also improves portability
ii. Promote use of Health Savings Account
iii. Look for tax favored status
iv. Change the self-employed health insurance deduction to adjusted gross income into
a fully deductible business expense
4) Improved payment innovations
a. Payable semi annually for Medicaid
5) Study the efficacy of reinsurance programs

Linda de Sosa, Houston TX