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August 2009 Archives

Why We're Waffling on Health Care Reform

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Earlier this year polls indicated that we were pretty much convinced of the need for health care reform. But when it comes to actually doing it we are backing down. It's a bit like a smoker's desire to quit, "I want to, but not now." Some of our loss of enthusiasm can be attributed to media coverage of the screaming supporters of the status quo in the recent "town hall" meetings.

Status Quo Bias

We have a deep-seated psychological resistance to change - some call it a "status quo bias". We would rather put up with something we kinow, even if it's broken, than change to something we don't know. When it comes to health insurance, most people tend to stick with whatever they start with even when premium rates double in five years. Some of this can be explained by the law of intertia - things tend to stay as they are.

Fear of Loss is a Strong Motivator

We are more motivated by fear of loosing something than getting something better. This is especially true if we feel pressured to change by a looming and arbitrary deadline, like health reform legislation by year end. A year ago, less than one-third of us rated our health care system good or excellent, now over half of us do. The system has not improved, but our perception of it has. The approaching threat of change has made us overvalue what we have.

Sold the Wrong Benefits

Recent polls show that almost half of us disapprove of the way the Obama administration has handled healthcare reform. For instance, they have concentrated on selling the benefits of lowering health care costs over the long term by extending coverage to the uninsured and offering a new public option. The problem is that most of us already are insured and all the cost cutting talk get's us thinking about what we might have to give up. To President Obama's credit, he's always said that if people like the health insurance they have they can keep it. But he needs to sell some of the very personal benefits certain to be included in the final version of the health care bill - like removing the pre-existing condition barrier. What that means to us is that we can each buy the health insurance we want and that it cannot be taken away from us. Keeping our medical insurance no longer means keeping our job. That's a huge benefit to many of us, those who may have a chronically ill family member and are barred from starting a small businesses or can't take the job they want because they would loose their group health insurance.

Maintaining the status quo is not no longer an option so let's do this thing.

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A promise by the pharmaceutical industry to save the nation $80 billion over a decade in exchange for protection from further givebacks under health care reform pending in Congress was confirmed recently by the White House. Apparently, the pharmaceutical companies got spooked by action in the House that would give the feds negotiating authority for drug prices and bigger rebates from the industry. So the industry got an explicit affirmation of protection from deeper cuts.

The trade group PhRMA explained the quid pro quo -- drugmakers stepped up first with a cost-saving pledge, and, in return, got "a rock-solid deal" not to make further cuts in prescription drug prices beyond the $80 billion. The White House confirmed the deal.

Neither party mentioned what is apparently a side deal - drug companies will bankroll a TV ad campaign in support of health care reform. The ads would bolster the administration's plans to remake health care and expand insurance coverage to nearly 50 million people.

The drug industry, already a big spender on commercials for its medicines, is an unlikely patron for the planned ad blitz, which could cost $150 million or more, until you stop to think about all the new customers an expansion of coverage might bring to pharmacies. To put the size of the ad campaign in perspective, Sen. John McCain spent $126 million on TV ads in his bid for the presidency.

Some of the TV ads expected this fall will carry the name of the Pharmaceutical Research and Manufacturers of America, the main trade group for brand-name drugmakers, which has pushed hard for an $80 billion limit on price concessions under an overhaul.

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This page is an archive of entries from August 2009 listed from newest to oldest.

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