Heading into the 2008 election, health care reform has become one of the most discussed issues among presidential candidates, and for good reason. As costs have risen, the percentage of employers providing healthcare to their employees dropped from 69 percent in 2000 to 60 percent in 2005, and the number of uninsured currently stands at 46.6 million. Most recently, major healthcare players, including the president of the National Coalition on Healthcare and the American Medical Association, have begun calling for a true, systemic change in the way healthcare is delivered.

One such approach is universal health care, a principle that has been advocated by at least three of the top Democratic presidential contenders. But while a universal mandate healthcare system would be a significant boon to the American economy, a single payer system would also cause dislocations of varying impact in the pharmaceutical, insurance, and hospital industries, as well as in doctor-patient relationships.

A Boon Disguised?
Experts are equivocal about how pharmaceutical companies will bear the burden of a new system. While the pharmaceutical industry was a key player in dismantling the move for universal health coverage in 1993, the outlook for such companies may not be as grim as they think. If Medicare Part D has been any indication, government subsidies would fuel strong prescription drug growth, serving as a great boon for their bottom line. As Les Fundleyter, a strategist at Miller Tabak noted in a recent CNBC interview, pharmaceutical companies would stand to benefit because “as people get more coverage, they will get more drugs.”

Manufacturers of generics would benefit especially, and while many, including Sen. Hillary Clinton have called for the production of less expensive drugs, financial analysts note that pharmaceuticals are skillful at filling market niches and providing highly specialized products that are not easily replaceable and are certainly less expensive than prolonged treatment.

And what of insurance companies? A universal coverage mandate could be a good financial deal. Companies would have to enroll some people undesirably ridden with risk and illness, but that loss would be at least partially offset by a new pool of young, healthy people who before saw little reason to become insured. And, according to Hillary Clinton, companies would save about $50 billion a year that is spent on deciding who to cover and who to exclude. But if the universal mandate were realized under a single-payer system, with government as the only insurer, the entire industry of managed care providers and insurers would be swept off the market.

Hospital, Heal Thyself
The proposals’ effects on hospitals—those players who most often bear the burden of caring for the uninsured—are particularly intriguing. Not much would change logistically for hospital administrators under a mandate system, though they could see great benefit if the billions of dollars they lose in treating uninsured patients were suddenly transformed into profits.

However, single-payer arrangements would have huge implications. Hospital billing would be completely eliminated as hospitals received lump sums from the government that would cover operations, expansion, technology, and marketing costs. Still, economic studies show that in a single-payer system, hospitals would be extremely unprofitable and struggle financially.

Under Medicare and Medicaid, hospitals often face funding shortages and make ends meet through donations, investment, and insurance arrangements. But no such safety nets would be available under the new proposals. “One need only look at Medicare and Medicaid to see how inefficient the system would be,” notes Katherine Baicker, Professor of Health Policy and Management at the Harvard School of Public Health.

For all the debate, it is easy to think of health care reform as simply a matter of politics, ethics, and morality. But while those considerations matter, it is important to remember that these policies they have intense economic and structural repercussions for both individual businesses and the national economy as a whole. Such massive changes entail huge bureaucratic and industrial dislocations and have the potential to make a system resoundingly more efficient and patient-friendly, or resoundingly more bureaucratized and chaotic. And unfortunately, perhaps it may only be through a trial run that citizens and businesses will be able to tell which it is to be.¨ ]]>http://hprsite.squarespace.com/treating-body-public-112007/rss-comments-entry-1373400.xml