Jack Welch critiques Obama's healthcare plan

Jack Welch, the guru of General Electric and the darling of Wall Street, is on a book tour.

The man who pioneered business innovations and put shareholder concerns on Wall Street's radar is also selling his new online MBA program -- the Jack Welch Management Institute.

So today he took a spin on MSNBC's Morning Joe program, where he delivered a telling critique of President Obama's healthcare program. The beef: It ignores the big questions.

Lashing the administration for suggesting that any government program can save money, Welch said that the Obama plan -- by putting off the table reform of malpractice insurance and ignoring issues like the cost of the last six months of life -- dooms any serious fix of the healthcare system.

"We've got to deal with tough issues if we want to get at costs," he said. While he credited Team Obama with tackling the right issues -- energy independence, the meltdown on Wall Street, rising healthcare costs -- Welch said he's concerned that "we're not getting enough debate about how to deal with each of these issues."

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The former CEO did have kind words for Obama on foreign policy. Parting company from Republicans who have criticized the president's reaction to Iran as "timid," Welch said he thinks Obama, in walking a line between embracing democracy and avoiding the label of instigator, has been "pitch perfect."

Welch joins a growing chorus of observers who are finding fault with Obama's healthcare plan. When the Congressional Budget Office projected last week that a government-run health insurance plan would cost $1 trillion to $1.5 trillion over the next 10 years, Sen. John McCain of Arizona called it "a body blow" to the Obama plan.

Even Democrats are growing uneasy.

"I don't know that he has the votes right now," Sen. Dianne Feinstein of California said on CNN over the weekend. "I think there's a lot of concern in the Democratic caucus."

One thing on Feinstein's mind is the likelihood that the White House would try to pay for its plan by cutting Medicaid and Medicare payments that support public hospitals. That kind of cutting could severely cripple California at a time of already unprecedented budget deficits.

"If you change the Medicaid rate, for example, it has an impact on California between $1 billion and $5 billion a year," she said. "Now how can I support that?"

-- Johanna Neuman

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Comments

[Affordable health coverage]

Market-based policies are more cost effective for the government - and therefore the taxpayers- than publicly funded healthcare. According to the Kaiser Commission on Medicaid and the Uninsured, January 2005, if every uninsured individual was covered by a government program such as Medicaid, the cost to the federal and state governments is approximately $2000 each. If, however, low-income and modest-income Americans could purchase their own health insurance by utilizing a $1000 tax credit, the federal government would save 50% of that money. With over 45 million uninsured Americans, that savings would be substantial indeed.

[medical insurance]

Market-based insurance would not only be more affordable health coverage, it would also provide consumers with more choice. Because savings come from a tax credit, the option to choose insurance companies, policies and doctors is left to the person who purchases the insurance, not a group of politicians. Health insurance needs vary widely from one individual to the next and having the ability to choose the options that work best for an individual's circumstances is fundamental to quality health care.

Several different market-based solutions could help low and modest-income individuals and families find affordable health coverage. Tax credits, tax deductions, health savings accounts and high-risk pools are all market-based options to make affordable medical insurance a reality for uninsured people who are working, but cannot afford medical insurance.
Tax credits allow people to keep more of their income on a monthly basis in their pay so the can purchase coverage. Because tax credits enable people to make their own choices of providers, plans and doctors, they are considered to be a preferred market-based solution for affordable health coverage. Tax credits enable working people to pay for their own health insurance without having to fall back on Medicare or other government health programs. Because a tax credit would cost only half the amount of Medicare per individual, the burden on all taxpayers is also reduced, saving everyone money.

Private health insurance can be affordable health coverage for every working American. By working with market-based solutions, health care reform can be a workable solution to the millions of Americans living in fear of a medical crisis because they have no medical insurance.

[George Fulmore]

All this talk about a new national health care plan having to pay for itself is a bit much, considering that George W. spent more than $6 trillion more than was taken in during his eight years in office. $6 trillion! Obama inherits a mess, and he gets to spend nothing? I'm for universal health care in the U.S. regardless of what it costs. Start it off and find ways to control costs after that. The private enterprise world that Jack Welch lived in does not work for health care for all. It emphasizes profits at the exclusion of availability and afordability. Private health insurance had its shot and it made a mess of things. It's time for the public option!

[AJoy]

Jack Welsh is correct. We must stop spending incredible amounts of money on futile end of life care. This is a serious challenge because, when faced with one's own mortality, most people want to do whatever it takes to extend life even if only for a few days. Or, family members want the doctor to do "everything" to keep mom/dad/person alive when there is no hope for a meaningful recovery. I get that no one is digging his own grave and hope springs eternal but the fact of the matter is we all need to address this particular issue as part of the entire picture.

[thomas vincent]

After you have paid into Medicare for 50 years, it might be nice if you got to decide for yourself if you are worth expensive care in what might be the last six months of your life and yet the only time you needed care. How about limiting lifetime care to 1 million dollars? Then you die, whether 12 or 82? Ridiculous. But that is what we are heading for. Who is paying for Ted Kennedy's last six months, dragging them to 9 months so he can waste more of our money on his legacy? Obama was honest: his kids will get the best care. But we will pay more for less care as we, the old citizen taxpayers, get rationed so young illegals get more care.

Obama wants to "solve" health care as a political problem, not as a medical and personal fact.

And why do we solve educational problems with more money and medical problems with less?

[Affordable Medical insurance]

Healthcare reform proposed by the Federal Government may actually eliminate affordable medical insurance from the private sector entirely. While publicly funded healthcare may seem to create affordable medical insurance for more Americans, it may actually create a bigger problem.

Private medical insurance is not the enemy of affordable healthcare in the US. In fact, if the federal government creates another public healthcare program, it will ultimately raise the costs of private medical insurance to exorbitant levels. While the idea of expanded public healthcare may seem to be the answer to affordable medical insurance, it could be the end of private insurance altogether. Medicare and Medicaid, the two public health programs currently in effect, cost private insurance companies - and by extension, Americans paying premiums for private insurance- $88 billion in 2007, according to the consulting group Milliman, Inc. In fact, the average family of four with private medical insurance saw their premiums increase $1500 because of public programs. In California alone, that represents nearly 10% of every premium dollar paid.

The problem comes because Medicare and Medicaid pay as much as 15% to 30% less than private insurance companies on every doctor and hospital bill. Because the doctors and hospitals aren't willing or able to accept this much loss, they push those losses onto private insurance companies, who, in turn, shift the loss to the consumer through higher premiums.

Private insurance companies must not only cover their costs and earn a profit; they also need to maintain a reserve of cash to pay out claims. If a new public health care program is developed and then pays medical costs at a reduced rate like the current systems do, it means there will be an increase in expense shifted onto private insurance to make up the difference. This increased cost will need to be offset through higher premiums for the people covered under private medical insurance plans. As those who have private insurance become forced to pay increasingly higher premiums, the number of Americans who no longer find private insurance an affordable health coverage option will increase. Those people will then need to turn to the newly formed public healthcare program and will then become part of the increased costs passed on to private insurance by underpaid doctors and hospitals.

As more unpaid costs from private health insurance continue to be pushed into premium prices and more people become unable to pay those premiums, eventually private health insurance will be completely unable to compete with public programs and will face the inability to stay in business. Affordable healthcare in the private sector will become impossible to find.

[Family Medical insurance]

Thomas Vincent makes some great points!