The Silence Is Deafening.

In the past, conspiracy theorists always seemed to be, well, excessive, paranoid, not-in-touch-with-reality. Given recent events, I think we need to reconsider what they say.

For over a year, healthcare has been virtually the only topic of national discussion. Now, suddenly…nothing. The silence is deafening.

Does the silence mean that nothing is happening? Some things have not changed. Most people get the health care they need, many without insurance, some later than they should. People still make themselves sick with overeating and smoking. Most still have a doctor they like. Costs keep going up and up, relentlessly.

A very large piece of legislation, more than 2300 pages and over 400,000 words, was recently passed. Called the Patient Protection and Affordable Care Act, H.R. 3590 enables a number of major changes that are happening during what seems to be a lull.

The silence is not total.

Some are doing their homework and then talking about it out loud. Deere farm machinery in Moline, IL estimates increased expenses related to H.R. 3590 of $150mil for fiscal 2010. Caterpillar in nearby Peoria projects additional costs of $100mil in the first quarter alone. AT & T has publicly announced their calculations: >$1bil additional cost-of-doing-business as H.R. 3590 eliminates the tax-free status of their retirees’ health costs.

What can businesses do to offset the costs created by H.R. 3590, especially those who cannot increase their revenue? The reason many cannot increase net revenue is either because they are in healthcare where reimbursements (aka payments) are fixed, or because global competition makes increased pricing a form of commercial hara-kiri.

So, what can they do to compensate for government-generated dramatic increases in costs? Answer: reduce their cost basis by ‘reduction-in-force.’ Medtronik in Minneapolis, the acknowledged leading manufacturer of pacemakers, is already planning layoffs, just like Caterpillar, Deere and AT & T.

Let us not ignore the loudly decried increases in health insurance premiums. Insurance companies are after all businesses just like other commercial enterprises. They either make enough money to cover payroll and satisfy investors or they will have neither.

So what do insurance companies do when the government adds millions to their risk pool and increases benefits by law? What else can they do but raise their prices (premiums) or go Chapter 7.

Congress doesn’t seem to like what they have wrought by passing H.R. 3590. Did they think American businesses could simply pay millions to billions more dollars to the government, and stay in business without major adjustments?

Apparently, the answer to my presumably rhetorical question is yes. Representatives Waxman of California and Stupak of Michigan of the House Committee on Energy and Commerce have called the CEOs ‘on the carpet’ to explain to Congress what they are doing. One wishes (with little hope) that these will be public hearings so we can see how the CEOs have behaved in a fiscally responsible manner while our ‘Representatives’ have not.

Such commercial adjustments, while huge to those who will be laid off, are actually minor compared to what is happening behind closed doors, in the deafening silence.

In Silence, Quietly, Behind Closed Doors

First, there are the Federal hiring programs for accountants, administrators, billers, coders, programmers, transcriptionists, and (reputedly) 16,000 new IRS investigators. There will be easily >100,000 new government bureaucratic jobs in healthcare and not one new nurse or doctor to provide health care.

What will these new hires do first? They will have to determine who has what insurance, with what benefits, and at what price? Such “due diligence” will also include gathering personal medical information on everyone in order to apply medical and financial risk analysis.

Also without fanfare H.R. 3590 creates multiple agencies de novo each with its own new rules and regulations that must be overseen and enforced. The Federal government is silent on how this massive expansion of the bureaucracy will increase public access to health care services, and more particularly, WHO will provide these services?

Finally, the frightening quiet is accentuated by two outright contradictions. If you compare what is written in H.R. 3590 to what both the President and Congress have stated publicly, you cannot determine whether Medicare reimbursements will be cut or not, and whether the health care needs of illegal residents will be covered or will not.

Shatter the silence.

Those who advocate repeal of H.R. 3590 are being painted as the truly crazy and no doubt some are. However, is not Congress even crazier? They passed a Bill expecting and loudly proclaiming that it would help both the public and the national economy.

1) H.R. 3590 promises health care that it cannot provide. The bill brings to mind the story of the Emperor’s Clothes.

2) H.R. 3590 increases the cost of healthcare. Let us not forget that unsupportable cost was the reason for the start of healthcare discussions in the first place.

3) H.R. 3590 is both suppressing our economic recovery in the short term and reducing American business global competitiveness over the long run.

When phrased that way, repeal of H.R. 3590 seems to be the reasoned, logical appropriate response to the current deafening silence.

System MD

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#1 financial risk analysis on 08.30.10 at 2:10 am

The points raise are quite sound. When the cost of labor goes up the demand for labor will come down. I believe that everyone should have access to health care but, the steps that have been taken so far will not provide healthcare just more paper to push around.

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