bobonomics

Who wouldn’t want to be able to go to a doctor any time they wanted and not get a bill for it?  Who wouldn’t want to know that if something catastrophic happens to them, either due to sickness or accident, that they would not face financial ruin because of it?

On the other side of things, what doctor wouldn’t like to know that he/she’ll be paid for all of his/her services?   That he/she doesn’t need an army of billing clerks working in his/her office?  What hospital wouldn’t like being paid for all the people that use their emergency room?

These are things that are positives under a Medicare-for-All plan, or a national health service.  There are, of course, negatives, too.

The one most people bring up is having to wait for appointments or surgeries.  Or not being able to keep your favorite doctor.

Now it may be different where you live, but I routinely need to wait at least a couple days for a non-emergency appointment with my primary care doctor.  And waits of weeks or even months are the standard for many specialists.  It is unlikely, or at least uncertain, that a universal healthcare plan would change this a great deal.

As to keeping “your own” doctor, in the final iteration of such a plan, all doctors (except a few, concierge-type physicians) would be members of a national health service, or accept Medicare (under whatever name it may exist).

Can this be accomplished by the stroke of a pen, or a single law passed by Congress?  Of course not.  A switch to this type of system will take years to implement.  It will require gradual change, on the part of patients, doctors, taxpayers and corporations.

Patients and doctors have already been mentioned.  Now let’s look at taxpayers and corporations.

It is true that every citizen (or possibly, every resident) of the United States would have to be a member of this health plan.  The Affordable Care Act (ACA) attempted to make this a reality by treating it as a requirement for all and using a tax penalty to enforce it.  (The penalty was eventually struck down, making the health insurance requirement a toothless section of the ACA.)  A national health plan would have to be supported by taxes, that is, as a required tax rather than a penalty.

This need for taxes to support the plan would, of course, raise individuals’ taxes.  But would it raise an individual’s actual payments for healthcare?  These days, in America, there are very, very few health plans that are actually provided free by employers.  Almost all require the employee to pay a portion of the premium.  Again, almost universally, they require co-payments or deductibles when healthcare is used.  All of these costs that are incurred by the average individual or family can be balanced against the amount of raised taxes needed.

Additionally, it is possible that corporations could pay part of the increased taxes that are needed.  This could take the form of a separate “healthcare tax” on corporations.  It could also be voluntary.  Think of it this way.  No company in the U.S. is required to offer a healthcare plan.  In fact, none did until 1929, when teachers in Dallas created a hospitalization plan that was partly employer-sponsored.  Even then, corporate healthcare plans did not become popular until World War II in the 1940’s.  During the war, there were wage and price controls.  The labor market was tight, for obvious reasons, and companies began offering sick leave and health insurance, which counted as benefits rather than wages.  These healthcare plans were meant to entice workers to want to work at the companies that offered them.  Today, corporations spend large amounts of money offering these benefits.  Yet almost no one would go to work for a company that did not offer at least some form of healthcare insurance (except for the smallest employers).

There is no reason to think that companies would not want to continue to offer this benefit, especially if its cost would be reduced in the future.  This could take the form of a contribution (specifically allowed by law) towards the healthcare portion of an employee’s taxes.  This would allow companies to continue offering this benefit, while reducing the individual’s added taxes to no more than he/she is currently paying for a healthcare plan (hopefully, even less).  Is it a fantasy to think that this would occur?  Not really.  Benefits are an important part of the compensation package for any average employee.  Workers would still look for these benefits when making decisions about where to work.

Let’s look at the situation for doctors.  Some changes would occur, of course.  Physicians that clear earnings well over the average would earn less, even on a net basis.  However, in countries that have a national health service, doctors still earn amounts that are close to the U.S. national average for their specialty, on a relative basis to the national average wages of their country.  These earnings would be a salary with no yearly fluctuations to worry about.  Doctors that cared to could establish a practice that took only private insurance or cash if they wished, but would be subject to limited business (patients) as most people would use the national health service.  This is the current situation in countries like the UK.  This would be the eventual result after full nhs is achieved.

As mentioned before, there would be advantages.  Doctors would not need to maintain and staff their own offices.  There would be little to no paperwork billing insurance companies or patients.  There would be no patients unable or unwilling to pay their bills.  A doctor could come to work in the morning and go home at night with regular hours.  Physicians who work for the nhs would pay no tuition or fees for their medical education.  Possibly some tax advantages could be offered on their earnings.

Patients could have their own doctors, in the same way that they do now.  Doctors would either be on the staff of hospitals or in smaller or single offices.  They might be grouped by specialty in larger population areas or in multi-specialty offices in smaller towns and rural areas.

There would be a downside for one big industry, unfortunately.  The health insurance industry would be largely put out of business.  The industry currently employs over half a million home office personnel (the figure is variously estimated at 500-660,000) plus sales office people.  Of course, if you’ve called an insurance call center lately, you probably realize that not all of these people are located in the United States, so that might cut the number down somewhat.

Many of the people in these home offices are involved in processing claims.  A Medicare-for-all system would still require claims processing, so there would still be a need for many of these employees in the beginning years of any changeover to a national health service system.  Companies that sell health insurance would have to change over to merely health processing companies.  Any profit from the sales of insurance would no longer exist, except in a much smaller way, as companies could still offer additional insurance services, similar to Medicare Advantage plans (at first) and then concierge types of plans (later).

Eventually, however, the government should probably force the insurers to split sales and claim processing into different companies, and the claims processors could be purchased by the federal government.  As the system transitions from Medicare-for-all to a true national health service, less and less claims processing will be required and these organizations would be downsized or eliminated.

So, it is certainly true that a major industry would be seriously affected, but this has always been the case with changes or advances in various fields.  The classic example is the buggy whip industry disappearing completely when automobiles became common (fairly apocryphal example).  But consider what’s happened to companies making photographic film (Kodak, once a mighty company, has practically evaporated) or paper maps (Rand McNally, a skeleton of its former self).  Even the historic newspaper industry has been greatly decimated by the internet.  The point is that sometimes an entire branch of trade can be reduced or replaced by more current developments.  Government assistance may have to be provided to industry employees as they transition to other work.

So how would this all come about?  As stated above, it will take years to achieve.  But we can lay out a plan.

The ACA

Initially, the Affordable Care Act already provides at least minimal healthcare coverage and everyone is required to have their own health insurance.  The problem, of course, is that there is no enforcement of this because the individual “mandate” was struck down by a Republican Congress.  This mandated coverage, enforced by a tax penalty, should be immediately reinstated.  This would ensure that Americans have coverage or that they contribute, through the mandated tax penalty, to the price of coverage for all.

Corporate, union and private insurance plans would continue as present, with the required coverage under the ACA.

Medicaid coverage would continue and expand as necessary (and fiscally possible) for those unable to afford premiums or penalty.

Medicare-For-All

The Medicare-For-All system is instituted.

Corporations, unions and individuals have the choice to join the system or maintain their own private insurance.

For-profit facilities would not be allowed to receive payments from Medicare or Medicaid.  For-profit facilities could continue and would still be legally mandated to provide care to all in emergencies, but would receive no government payments for it.

The Medicare-For-All hospital network should be established, either through construction of new facilities or purchase of current facilities.  For-profit organizations would also have the choice to transition to non-profit.  The pay structure within the converted institutions would be controlled under federal guidelines.

Taxes would be phased in to replace the penalties  These would be listed separately and would apply to both people who are insured and those who are not, although those who would have qualified for penalties (i.e. those without healthcare coverage) would pay more than others.

Additional healthcare training programs and medical schools would be established for those students willing to join a national health service upon graduation.  It has been previously shown that the American Medical Association (AMA) has limited the number of medical schools and students in order to hold the earnings of doctors at the highest level, much like any other labor union.  This has resulted in the United States being required to import many medical professionals from other countries.  There is no reason why more students can not be admitted to more medical schools and still keep the same level of physicians being graduated.  Larger numbers of doctors would also help ensure that all areas of our large country are served with the medical help necessary.

National Health Service

Healthcare would be fully taxed.  Every citizen would pay the healthcare tax, based, of course, upon their ability to pay taxes at all.  The tax would be listed separately so that corporations, unions, etc could make non-taxed contributions for their employees’ taxes, if they so desired.

The National Health Service would be fully established and healthcare at NHS facilities would be free for all taxpayers, as well as for those who file but are not required to pay taxes due to low incomes.  Non-citizens would pay, but the amounts would be nowhere near what they are now.  Non-citizen with healthcare insurance would be eligible for treatment at NHS facilities, but their insurance would be billed.

Much of this is based on the work of William Beveridge and Aneurin Bevan in establishing the National Health Service in the U.K. in 1948.  The changeover was quicker there, but much of that was due to the completion of World War II and the major changes made as a result

My friend A, as well as many others, are complaining about former President Obama taking $400,000 for giving a speech (his first paid speech since retiring from office).  He complained that Obama should be “more discerning as to who he should receive it from regarding topic.  Wall Street has no business funding a healthcare talk.”

So, here’s Bob’s opinion on that.

President Obama is indeed giving this speech to “Wall Street” in the context of there being only two parts to America, Wall Street and Main Street.  But that’s not really a valid context to use.  There are many parts to Wall Street, as well as many to Main Street.  In fact, it is not very beneficial for us to think only in this binary way about the economy.

As stated, Obama is being paid $400,000 to give a speech about healthcare.  But who, exactly, is he giving this speech to, and who is paying him to do it.  And why would you pay an ex-President that much money to speechify?

The speech is to be given at a Cantor Fitzgerald healthcare conference.  Cantor Fitzgerald is a medium-sized investment bank (medium-sized only in the context of investment banks, which can be huge, e.g. Goldman Sachs, etc).  Some will remember it as having many of its executives and staff killed in the 9/11 attack.

My friend A seems to think that Obama will be speaking to a group of healthcare executives, either telling them “secret ways” they can make more profit from their nefarious businesses, or patting them on the back and telling them how wonderful they are.  But he will actually be doing neither.

A conference, such as this one, is an event sponsored (generally) by a bank or brokerage firm, open either to their clients, current or prospective, or to anyone willing to pay for admission to it, or to any combination of the above.  This may be a one-day affair or it may go on for days.

In this case, its subject is healthcare.  Typically, this means that there will be representatives of various healthcare companies present to give prospective investors information about their companies.  They may man booths, such as you would see at the kind of convention we’ve all been to, or they may only be available for panel discussions or one-on-one meetings with potential investors.  The exact setup depends on a few variables, including the size of the investment required to attend the conference.  In other words, if the conference is restricted to investors with large amounts to invest, it is more likely that top executives of the healthcare companies will attend, and more likely that meetings will be more personally directed.

Additionally, there will be speakers, either solo or in the panels, who are analysts in the healthcare field.  They may come only from the firm sponsoring the conference (Cantor in this case) or they may be from agencies or “think-tanks” that study the field.  Outside analysts will probably be paid for giving their opinions in the panels, etc, although obviously not a fraction of what Obama gets.

The attendees at the conference will be considering investing in the healthcare field.  Or, possibly, DIS-investing in it, if they don’t like what they hear.  Who are these people?  They may be high-net-worth people, i.e. so-called “fatcats” who have good-sized fortunes to invest.  They may be analysts or executives of mutual funds (possibly some contained in your 401(k) or IRA), trying to decide where to put their clients’ money.  They may be from pension funds, representing teachers or firemen or mineworkers or you.  If it’s a wide-open paid conference, they may be analysts from other banks or investment firms getting the latest scoop on the industry.

The executives or other representatives of the healthcare companies are there to encourage the attendees to invest in them, either as initial investments that go right to the company, or as current market stock investments that help support the price of the stock.

So why does Cantor Fitzgerald spend its own money to host this conference, typically at an expensive hotel or meeting site?  It is simply to encourage the investors, whoever they may be, to do their investing through Cantor.  The conferences are held to provide investment guidance, which is a valuable quantity to the attendees.  Cantor is willing to spend large sums, quite simply in the hope that they will keep their current clients happy, as well as attract new clients.  An investment bank or brokerage earns a large portion of its earnings from fees and commissions charged to clients for handling their investments.

One important thing to remember here is that, by and large, Cantor Fitzgerald doesn’t care much whether the resulting decisions of the attendees after the conference are positive towards investing in healthcare or negative. Cantor simply wants to provide that valuable quantity, Information.  They know that the attendees have to invest their money in something.  Funds have to keep generating returns on their investments if they want to keep their investors or if they want to keep paying their pensions.  As to large individual investors, well, think of yourself (even if you only have a little spare cash to your name):  do you want to leave your money in a bank account paying less than 1% or do you want to put it in something that will produce higher returns?  So Cantor will have other conferences covering other fields, and will provide investor advice to its clients at all times about all industries.

The healthcare executives at the conference, of course, would like to have the impression of their field be positive.

Now we come to our primary topic, the $400,000 speech being given by former President Obama. That’s a lot of money.  Why would Cantor pay him that much to speak?  They want people with high recognition, who have something to say that’s important in the field of the conference.  That’s because they want to attract people to this conference, thus earning themselves new customers and greater commissions and fees.  You can’t get much higher recognition (in someone who’s not currently holding political office) than the President who’s just left office.  Especially one who has been responsible for so much change in the healthcare field.

Former Presidents command high speaking fees.  Bill Clinton earns anywhere from $150,000 to $450,000 for his speeches.  Ronald Reagan once got $1,000,000 (in 1989 dollars!) each for two speeches given in Japan  Rudy Giuliani’s highest-paid speech earned him $270,000. Donald Trump was paid $1.5 million per speech for The Learning Annex’s Real Estate Wealth Expos.  So President Obama, giving his very first paid speech after leaving office, on a subject he knows well, seems like a relative bargain.

Now here’s the really interesting part.  He’s being paid to talk about the future of healthcare.  For all we know, he will stride up to the dais, say “Healthcare in the US will be socialized in two years, all your companies will be bankrupt, don’t invest a penny in them, thank you and good night.”  He probably won’t, but he could.  Cantor Fitzgerald is paying him to give his honest opinion about the subject.  That what the attendees want also.  They’re not interested in some BS about how great everything is.  They want real information about it,because they’re investing real money.  Oh, Cantor will probably be happy if he says what a great investment bank they are, and maybe tells a joke or two, but that’s not what they’re really paying for.

President Obama is a DRAW, especially this early in his retirement.  He’s worth every penny they pay him, just for attracting people to this conference.

As for his motives, they’re probably pretty simple.  He’s worked in academia and politics his entire life.  For someone of his qualifications, those are low-paying jobs.  Even the Presidency.  It’s time for him to make some money for himself and his family, as is anyone’s right.

And that’s Bob’s opinion.

Welcome to WordPress.com! This is your very first post. Click the Edit link to modify or delete it, or start a new post. If you like, use this post to tell readers why you started this blog and what you plan to do with it.

Happy blogging!