Analysis of Obama's Speech

President Obama on Wednesday clearly laid out his vision for health care reform. Although the speech was long he actually succinctly stated his goals and laid out his vision in language that should make it difficult for opponents to mis-represent and lie about.

Cost and Waste issues
On my favorite topic the President had this to say:
"We've estimated that most of this plan can be paid for by finding savings within the existing health care system - a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn't make us healthier. That's not my judgment - it's the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid."

He's right but I'm going to be very watchful of the details on this as I hope he is talking about instituting health care reimbursement based on "episodes of care" and I hope the plan includes implementing LEAN processes.

There was no mention of either in the speech. As the President said there are many details that need to be worked out to flesh out the basic proposal he announced.

On Medicare and Medicaid there was little detail but he reassured seniors and people with disabilities that he would protect the programs they need and rely on. I'm sure there are important new ideas that will impact these groups within Obama's and Baucus's plans. Please check back here for that analysis soon.

On the public plan
The President said, "An additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear - it would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up." Taxpayers will not be subsidizing this public insurance option. Obama said, "The public insurance option would have to be self-sufficient and rely on the premiums it collects."

This should clear up the idea of a gov't takeover of health care but I doubt it will and in the end I'd bet that health co-ops are what is implemented as a compromise. I've said that before and I'd bet my mortgage on it being the alternative option.

Individual and Small Business Tax Credits
For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can't get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it in the campaign, it's a good idea now, and we should embrace it.

Cost of the plan
The President- "I will not sign a plan that adds one dime to our deficits - either now or in the future. Period. And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize." The plan will cost around $900 billion over ten years. Most of these costs will be paid for with money already being spent - but spent badly - in the existing health care system. The plan will not add to our deficit. The middle-class will realize greater security, not higher taxes. Obama reiterated the dire need to curb rising medical costs saying, "if we are able to slow the growth of health care costs by just one-tenth of one percent each year, it will actually reduce the deficit by $4 trillion over the long term.

As always more and more details will be forthcoming. I will research how the plan addresses the waste issue and the provider payment issues. These are the key components and will make or break any bill that becomes law. Please stay tuned, engage, and provide your comments.