This guy is my new hero. He wrote an article recently that I love. I would love to go work for this many.

The link is here http://www.modernhealthcare.com/article/20090209/SUB/302099987 and here is the article:

Putting skin in the game

Reform must not eliminate patient, employer responsibility

By Howard Rohleder
Posted: February 9, 2009 - 5:59 am EDT

Moral hazard has been widely discussed in the context of the 2008 financial crisis. Simply stated, moral hazard is the concept that, if the risk of failure in a transaction is greatly reduced, some part of the population will choose to undertake imprudent actions they would not otherwise consider.

In the financial world, moral hazard arose from an implied guarantee by the government to backstop certain transactions. While the implications of ignoring this principle have now become clear to the financial system, we should consider how moral hazard relates to healthcare.

Already, a major disconnect in the healthcare system is the reliance on “third-party payers.” For many consumers, the need or desire for healthcare is not tempered by cost. We have minimized the risk to consumers of overutilization as well as the risk of choosing the high-cost alternative.

As tax policy encouraged the creation of gold-plated company benefit plans, the concept of insurance protecting against a catastrophic claim gave way to first-dollar coverage. Any financial risk for consumption was eliminated. The prudent man may not live in the best neighborhood or drive the best car, because he makes an economic choice acceptable to his taste and budget. But, when it comes to healthcare, which the “third party” is paying for, only the best is acceptable.

As this was occurring, many lifestyle-related illnesses blossomed and, significantly, the medical technologies to diagnose and treat those illnesses were developed. The individual was sheltered from the risk of chronic disease: new drugs and technologies offered treatment and their health insurance covered the cost.

So here we are: Federal programs and tax policies encouraging health insurance have spurred the supply of medical services and encouraged the development of robust pharmaceutical and medical equipment industries. Improved care resulted in longer lives, which led to more chronic illness, which caused demand to spiral upward, which fed the need for more supply. The capital costs to keep up were being passed on to the third-party payers. No employer or politician wanted to tell their constituencies that they could not access the latest diagnostics or treatment.

Left behind were the uninsured. Wonderful medical care was suddenly available to those with insurance. Providers logically chose to focus their efforts on those who had the means to pay through insurance. Others were not so fortunate. As stories of the uninsured were publicized, medical care began to be seen as an entitlement. If a person did not have an employer to pay for it, then they turned to the government. If they were not eligible for a government program, then an expectation was introduced that the providers should absorb the cost. We have raised expectations of entitlement while leaving it to providers to deliver the service.

So, where does this leave our hospitals? The shifting of costs from government payers to commercial insurers has gone as far as it can. The burden of this “hidden tax” has grown to the point that insurers (and employers) are rebelling. Insurance has become unaffordable to many small companies. The resultant pool of uninsured has become a rallying cry for charity care by hospitals to be expanded or for government to step in with a single-payer solution.

The political process moves us closer to defining healthcare as a “right.” This can be compared with years of political jockeying through government-sponsored organizations such as Fannie Mae to promote a high percentage of home ownership without regard for whether buyers had the means to support the obligations involved.

Healthcare being defined as a “right” implies payment provided or supported by taxes. History has proven that someone will provide an unlimited supply of whatever healthcare services are paid through insurance. In this country, there is no “right” for universal food, clothing or housing. Yet, we are talking about funding a system that could create unlimited demand for something far more complex and expensive.

At that point, the design of our health benefit plan will be subject to the vagaries of the political process. Every advocate for a particular drug, alternative therapy or new technology will lobby for inclusion. Illnesses that we haven’t even thought of will be defined and treated aggressively. No one will be speaking for balancing the demand for care with the economics of care.

The moral hazard argument prevails. When we provided first-dollar insurance coverage with no individual risk for the cost, usage increased. When we reduced the risk of not having health insurance by providing Medicaid coverage and mandating basic care by providers, the uninsured population increased. When we minimized the risk of poor lifestyle choices by developing drugs and therapies (covered by insurance) to counteract negative outcomes, chronic illness increased.

The remaining question is whether we accept the added moral hazard of moving to a single-payer system that eliminates the employer’s risk. This removes the last bastion of prudent economic control on health benefits and places it in the hands of Congress. Employers would no longer be a party to negotiating benefits. Our recent experience with encouraging home ownership should be an example. Why would the political process fare any better in designing a workable health benefit plan?

Howard Rohleder is president and chief executive officer of Salem (Ohio) Community Hospital.