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Hugo’s Letter to Congress

October 18, 2009

Dear Member of Congress:

I am writing to express my profound disagreement with the current health care reform legislation that is being formulated. It has been and will continue to be vigorously opposed for the reasons outlined below.

The process by which the current legislative soup has been evaluated herein is rooted in the practice of multi-disciplinary solutions engineering.  A synthesis of basic problem solving principles and techniques, the approach is equally purposeful whether evaluating repairs to your car, a facility renovation, or an overhaul of 1/6th of the nation’s economy, as is the case here.

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  • Has the problem been adequately defined and have the baseline conditions been sufficiently verified? ……………………..No.

The oft-cited number of uninsured citizens is 45.7 million people, or 15.3% of the approximate 300 million residents.  This number is taken from a 2007 Census report. The composition of this number is noteworthy as it illuminates both the scope and urgency of this issue.  Of this 46 million, more than 6.6 million are believed to be unauthorized immigrants. Additionally, and according to the same Census report, approximately 7.8% of the 46 million have household incomes greater than $75,000.  Other studies have indicated that over 14 million persons are eligible for existing government health care programs such as Medicaid and SCHIP but have not applied. Furthermore, a 2005 report by the Department of Health and Human Services stated, “one-in-five (20%) of the uninsured that year were without coverage for three months or less.” Applying that ratio to the reported 45.7 million uninsured yields 9.1 million persons.

Accounting for the classifications above, it can be reasoned that there are 12.3 million legal residents (4.1% of the population) that are termed “ever-uninsured,” meaning they may face significant financial risk of having a medical emergency that would have to be paid for out of pocket.  It is these citizens that are reportedly targeted for assistance under the proposed legislation.  As such, a program designed to remedy the 45.7 million uninsured is, at a minimum, illusory and, at worst, nearly four times as large and costly as is needed.

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  • Has the recommended solution been adequately specified, including the scope, schedule, costs, benefits, and uncertainty? ……………………..No.

There are currently five bills being developed and revised (two in the Senate and three in the House).  Leadership in both houses is on a two to three week timeline to put a bill on the President’s desk to become law.  The only bill that passed through committee in either the House or Senate and was scored to be deficit-neutral by the Congressional Budget Office was not legislation but, rather, conceptual language offered by the Senate Finance Committee. The CBO released their “preliminary analysis” on October 7th and in their letter to Congress cautioned in a section clearly titled Important Caveats Regarding This Preliminary Analysis that “The Chairman’s mark, as amended, has not yet been converted into legislative language. The review of such language could lead to significant changes in the estimates of the proposal’s effects on the federal budget and insurance coverage.

The CBO’s preliminary analysis of the Senate Finance Committee’s conceptual language revealed that the number of uninsured would be reduced by 29 million, falling short of the initial stated target of 46 million.

In terms of the proposed schedule, as currently conceptualized, the revenue side of the legislation is to be enacted immediately (i.e. taxation of high cost plans, issuance of mandate penalties and free rider penalties), while the benefits to those currently uninsured that will be benefit from this legislation will not be implemented until 2013.

Most alarming is the non-passage of amendments to require a full CBO scoring based on actual legislation and a minimum of 72 hours prior to voting on a final bill. This would senselessly and ultimately prevent all of the equally-critical dimensions of a recommended solution from being evaluated.

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  • What other solutions were considered and why were they ultimately dismissed in favor of the recommended solution? ……………….Incomplete/ Unsatisfactory.

While there have been many permutations of the current legislation, there are two seemingly viable solutions that have not been responsibly addressed:

a.  Currently each state regulates its own health insurance industry.  While Congress is now positioning the delivery of health care and medicine as an interstate commerce activity, the availability of insurance plans across state lines is fully discounted.  There are roughly 1,300 health insurance companies presently serving the nation and in over one-half of the states, one insurer covers over 50% of the population.

The President’s senior advisor, David Axelrod, in a September 9th interview addressed the notion of interstate competition with the following:  “That is not endemic to the kind of reforms that we are proposing … We’re proposing a package that we believe will bring that stability and security to people, will help people get insurance, and will lower the cost impact and pass the Congress. And that has to be the test. We’re not into symbolic expedition here.

There has been nothing more than a terse dismissal by the Congressional majority on this matter as well. This is presumably due to the fact that this issue is the province of the states and not so cost or time-intensive as the proposed legislation.

b.   Under the theme of tort reform there are a number of potential improvements such as the establishment of special malpractice courts and limits on non-economic damages that have yet to be seriously introduced into the discussion.  In response to such a question posed at a town hall meeting on August 25, 2009, the former Chairman of the Democratic National Committee, Howard Dean, candidly stated:  “Here is why tort reform is not in the bill. When you go to pass a really enormous bill like that the more stuff you put in, the more enemies you make, right? And the reason why tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth. Now, that’s the truth.

While Dr. Dean’s response was truthful, it was not a good answer as to why this specific item has been conspicuously absent from any legislative discussion.

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  • Has a plan to verify the program results been defined? ……………………..No.

How will it be determined that, if enacted, the legislation met its objectives?  What does health care reform look like and how will it make itself known when it is realized?  Too often, results are glorified as achieved before the first work is done.  In this case, there are multiple measures of success, including deficit-neutrality, expanded coverage, sustained quality of care, applicability of coverage, and cost.

Without a verification plan, any posture of accountability for program results will be meaningless and the likelihood for success is greatly diminished.  As important, the proposed language is devoid of a progress monitoring plan for the program to ensure that the implemented solution does not become disconnected from the problem it was intended to solve.

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  • Have suitable references and project experiences for similar type work been provided? ……………………..No.

There are two large examples that are often cited to support the federal government’s ability to effectively engage in such an undertaking as is being considered: the U.S. Postal Service and Medicare.

The U.S. Postal service is the single largest civilian federal agency.  It is also the third largest employer in the entire country, behind the Department of Defense and Wal-Mart.  In August of this year the USPS reported a quarterly loss of $2.4 billion, delivering the 11th quarter in 12 with a net loss.  Last year, the Postal Service lost $2 Billion and is expected to lose over $7 Billion by this year’s end and the Postmaster General most recently noted that the multi-billion losses are expected to continue for “many years to come.”  While it is a vastly different business than the proposed health care system, there are keen similarities between the architecture of the business model that warrants awareness.

Medicare is not only an example of previous health care legislation but also is intertwined with the current reform legislation.  In fact, it is purported that the success of the pending bill relies heavily on reducing Medicare spending on the order of hundreds of billions of dollars.  In 1967, one year after Medicare was implemented, the government projected that the cost of the program in 23 years would be $12 Billion. The actual price in 1990 was $110 Billion.  And as of 2007, the program has a projected $85 Trillion in unfunded obligations.

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Conclusion

  • The current proposed legislation, in all of its present forms, fails in accurately and honestly identifying the problem to be remedied.
  • There are no plans by Congress to have the final proposed legislation undergo a detailed cost-benefit analysis by the Congressional Budget Office.
  • It has not been unanimously favored by all members of Congress that they have sufficient time to review and discuss the final legislation before voting.
  • Notably absent from the arena of solutions being discussed are interstate competition and medical malpractice reform.
  • There are currently no prescribed measures for verifying the success of the legislation if enacted.
  • There is no precedent or historical record of success on which the federal government can legitimately claim a qualified standing to enact legislation that directly impacts, literally, the lives of every single citizen.

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Frankly, the Congress has not been convincing that it has prepared a thoughtful, efficient, and effective plan that is in the sole and best interest of the People.  I respectfully yet firmly submit to you a request to do better.  Law that gets made like this will not work. Perhaps at one time it did; but now, no longer.

I would be willing, however, to support a memorandum of understanding so that a proper study of the existing problem and development of viable solutions can be undertaken in a manner and with a level of competency and statesmanship commensurate with the criticality of this matter to millions of Americans.

Regards,

Hugo

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