One of the points I made all along during the health care reform debate is that the current plan leads us down the path to a single payer, government run health care system. President Obama understands that a government run solution would never have passed Congress, so they backdoored a plan that would eventually create a single payer system. How? By making sure that businesses would be put in a situation where they couldn’t afford to comply with the new regulations and increased costs of health care coverage. The plan was never intended to reduce health care costs, but to increase them.

When President Obama said that Americans would be allowed to keep their coverage, he lied.

Many large firms including AT&T, Verizon and John Deere, have already explained how they may have to drop health care coverage for their employees. A tax change created in the new law will cost these companies millions of dollars, and it may no longer be economically viable for these companies to continue to provide health care coverage. (See this story from CNN.com.)

But what came out in a recently leaked government document is even more disturbing. We had been promised that our health care coverage would be “grandfathered” in under the new law, allowing us to keep the policies currently offered by our employers. According to a joint project that is being prepared by the departments of Health and Human Services, Labor and the IRS, they have predicted that up to 51% of employers may have to relinquish their current health care coverage under the new law.

Why? Because most of these policies will lose their “grandfathered” status within the first few years.

The “midrange estimate is that 66% of small employer plans and 45% of large employer plans will relinquish their grandfathered status by the end of 2013,” according to the document. In the worst-case scenario, 69% of employers — 80% of smaller firms — would lose that status, exposing them to far more provisions under the new health law.

If a company makes even simple adjustments to their current plan, it is now considered a “new” plan and no longer subject to the “grandfathered” status. And all NEW plans must conform with the new government regulations, which will INCREASE the costs of the coverage. Just to give you some insight, 66% of small businesses and 47% of large businesses made a change in their health care plans last year that would have forfeited their grandfathered status. (See this story from IBD.)

So what do you think will happen when millions of Americans lose their health care coverage over the next few years? Don’t worry, the government will have a solution for us. It’s called government run health care.

Polls are interesting, but it is important to understand that they’re only a snapshot in time. And polls can be misleading. Take it from a marketing professional, how a question is phrased can certainly impact the responses given. The polls that I tend to read the most are the ones that are repeated over time — the tracking polls. Even if there’s an element of bias built in to the poll — intentional or unintentional — the trend over time is still revealing. Here are a few recent poll numbers I’ve found interesting.

63% Favor Repeal of National Health Care Plan
As news continues to trickle out about the health care plan, such as the CBO’s recent revision of the costs associated with the bill, support for repeal of the plan continues to rise. According to Rasmussen Reports, 63% of U.S. voters now favor repeal of the health care plan, the highest level ever.

From the same poll, “33% of voters now believe the health care plan will be good for the country, down six points from a week ago and the lowest level of confidence in the plan to date. 55% say it will be bad for the nation. Only 3% think it will have no impact.”

Generic Congressional Ballot, Republicans Hold 8-point Lead
In Rasmussen’s Generic Congressional Ballot, Republican candidates now hold an eight-point lead over Democrats. These numbers have been fairly consistent for several months. “While solid majorities of Democrats and Republicans support their own party, the plurality (41%) of voters not affiliated with either major party now prefer the Republican candidate, while 20% like the Democrat.”

Obama’s Job Approval Numbers
Virtually all of the major polling firms has a presidential approval tracking poll. Real Clear Politics does an average across all of the major polls, and according to RCP, Obama’s favorables are at 47.9, and unfavorables are at 46.4.

64% Favor Offshore Drilling
I think this is the number that surprised me the most. According to Rasmussen: “Despite the major oil rig leak that continues to spew an estimated 5,000 barrels a day into the Gulf of Mexico, the majority of U.S. voters still support offshore oil drilling. The latest Rasmussen Reports national telephone survey of Likely Voters shows 64% believe offshore oil drilling should be allowed, up from 58% earlier this month.”

This is what happens when politicians with little understanding of business are in charge of tax policy. According to a recent article on CNN.com:

Section 9006 of the health care bill — just a few lines buried in the 2,409-page document — mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

Before we get into this, let me tell you a little about my dad. My dad thought he was good with money. And to his credit, he had a few periods in his life where he made quite a bit of money. But he also had a couple periods of his life where he lost virtually everything. He had a gambler mentality. But not the smart gambler mentality that told him when to walk away. He was the gambler that never knew when to stop. And he refused to learn from his mistakes.

Dad understood that it took spending money to make money. But he had no concept of diminishing returns. This is an over-simplified explanation of diminishing returns.

Let’s say as a business owner you can spend $100 on materials and labor, make a product, and sell it for $200. That’s a $100 profit. That’s good.

Then you discover you can build a better product for $130, and sell it for $300. That’s $170 profit. You not only increased your profit by $70, you increased your cost by only $30. That’s even better.

There becomes a point where diminishing returns kick in. Let’s continue with the example and build an even better product. Your cost is now $250. And you can sell this product for $500. On first glance this looks good. You’ve now made a $250 profit. But it’s not as good as it sounds. You’ve spent an additional $120 to increase your profit by $80.

That’s diminishing returns.

My dad never understood diminishing returns.

Neither does the federal government.

So let’s get back to this new tax policy where every business must generate 1099s for every individual AND every corporation from which they buy more than $600 in goods or services in a tax year.

The Burden of Creating the 1099s
I own a very small business, and I may have one hundred vendors which I will pay $600 or more every year. I will have to contact every one of my vendors to obtain their EIN numbers and enter their information into QuickBooks. At the end of the year I will have to print 1099s for these vendors, stuff them into envelopes, stamp them, and mail them. How much time will this take? That will largely depend on how easy and responsive my vendors are in providing the information I need. I will guestimate that I’ll have a good 50-60 hours into this project in the first year, plus expenses.

That’s 50-60 hours I can’t spend growing my business. And I’m a very small business. Multiply that out across the country for EVERY business, big and small. How many businesses are there in our country? How many hours of time to gather the required information and process it? How many millions of documents will be printed? How much postage will be used to mail millions of documents? What about the resources used to do all of this? I don’t know. I guarantee that it will be substantial.

The Burden of Receiving the 1099s
Now this also means that most of my customers will be issuing me 1099s. I will have to provide them with my EIN number upon their request. And every year I’ll receive a few dozen 1099s from my customers that I’ll include with all of my tax information to my accountant. This won’t be much of a burden for me personally. As I said, I’m a very small business.

But what about larger companies? What about Dell? Office Depot? Holiday Inn? They will receive tens of thousands of 1099s in the mail every year. If not more. They will have costs involved both in sending 1099s to their vendors, as well as processing the 1099s they receive from their business customers.

Who pays for this? Oh yeah, the customer. Dell doesn’t just absorb these new costs and move along. Their are repercussions. And the repercussions will either be in increased prices for their products, or financial cuts elsewhere to compensate for the new expenses.

Diminishing Returns
Now you’ve probably been wondering why I started this post talking about my dad and explaining diminishing returns. The question becomes, what is the net result of this tax policy change?

According to the same CNN article, the IRS estimates that the federal government loses more than $300 billion each year in tax revenue on income that goes unreported. This is the government’s attempt to collect a portion of this tax revenue.

But how much can they truly expect to increase in their tax collections with this policy change? Who will pay more in taxes and have to declare money that had previously gone unreported? Or under-reported?

Not Dell. They report their income. Receiving potentially hundreds of thousands of 1099s will not change the amount of income they report. What about Holiday Inn? What about Office Depot? What about IHOP? What about me? Nope. I already report all of my income. And I suspect that most of these other companies do as well. But even if a large company is purposefully under-reporting their income, would we really expect a change in their behavior resulting from receiving these 1099s? I wouldn’t think so. They would still find a way to under-report their income.

I don’t have a problem believing that the IRS fails to collect a lot of money due to unreported income. But which businesses will actually feel compelled to declare more, or all, of their income who aren’t doing so already? Whose behavior will this tax policy change?

One, it would have to be a business who does most of their work for companies, not individuals, as they would only be receiving 1099s from companies. And two, a company who is actively under-reporting their income who would feel at risk if they continued this behavior. I can only imagine that this scenario fits a very small set of very small businesses. Large companies currently cheating on their taxes will continue to find ways to cheat on their taxes. And that’s probably true for most small companies as well. I don’t expect this tax policy change to net the IRS a significant increase in tax revenues. And we haven’t even discussed the new burden on the IRS of receiving millions of new 1099s to process.

So once again, what’s the net result? I couldn’t find anything online that discussed this in detail, or broke down increased costs versus increased tax revenues. Though I didn’t really expect to find anything. Common sense tells me that it will cost business significantly more than it will net the IRS in increased tax revenues.

But our politicians don’t care about diminishing returns. They don’t care if it costs business $100 for them to increase tax revenues by $10. After all, it wasn’t their $100 that was spent for them to receive the $10. It was ours.

Cartoon from Stus.com.

Don’t ask me what I want it for
If you don’t want to pay some more
Cause I’m the taxman
Yeah I’m the taxman
–George Harrison, Taxman by the Beatles

I’ve been reading a number of comments from both sides about mandated health insurance, so I thought it was time to weigh in. Lots of misinformation floating around. The point of this post isn’t to discuss the merits or intrusions of government mandated health insurance, or the Constitutionality of it, but to discuss how it will be enforced and taxed.

As many of us understand, Congress has mandated health insurance for all Americans beginning in 2016. Those who do not have coverage will be taxed. Congress calls this a “fee” but it’s a tax. (See definition of tax here.)

How You Will Be Taxed
Similar to documents you receive from an employer concerning your income and taxes withheld, insurance companies will now be required to provide people who are insured with documents proving that the person has health insurance. When you complete your federal tax returns every year, there will be a place to indicate whether or not you have coverage, and you will have to supply the documents provided by your insurance company to prove that you have coverage. If you do not have health insurance, you will have to pay a tax based on your level of income. This is lumped in with the rest of the taxes you owe, or for many, deducted from the refund that you will receive.

Who Will Pay This Tax
Here’s one of the things I find interesting about this discussion. Most taxpayers overpay taxes during the year, which means they’re due a tax return from the federal government. There’s really no way that these Americans who choose to forgo health insurance can avoid paying the tax as it will be computed with their potential refund. So basically everybody who forgoes coverage and files taxes, will have to pay this tax.

So in practicality, the only people who will be able to avoid paying the tax will be the same people who already fail to file their tax returns.

The Consequences of Non-Payment of this Tax
This has been one of the primary disagreements between proponents and opponents of mandated coverage. Some extreme opponents have claimed that people will go to jail if they don’t buy health insurance, and refuse to pay the fee. Proponents of the bill have claimed this to be a lie.

The truth is this: In earlier versions of the bill, people who chose to forgo health insurance coverage, and refused to pay the “fee” imposed by the federal government, could be prosecuted either criminally or civilly by the federal government. (Read this document prepared by Thomas A. Barthold from the Joint Committee on Taxation in November of 2009.)

Refusing to pay the “fee” is tax evasion. Few people ever go to jail for tax evasion, but it is a possible consequence of non-payment.

I have also read that the health insurance bill has been revised so that people are not penalized for non-payment of this tax. It doesn’t mean they don’t owe the tax. Just that their aren’t “penalties” for not paying this portion of their taxes. However, this will be interesting to watch in application. Basically you’re looking at a small group of individuals who fail to file their taxes, thus have also failed to pay the tax on forgoing health coverage. They can be accessed penalties and interested on the taxes owed EXCEPT on the amount that’s owed for the “fee” for forgoing health coverage.

In all practical purposes, people who forgo coverage AND refuse to pay the “fee” will be the same people who are already trying to avoid paying their taxes. Their really will not be an option for the everyday taxpayer to refuse to pay the fee if they refuse to purchase health coverage.

Like many I’ve continued to watch coverage this week of health care reform. Just a few interesting articles and nuggets today.

CBS Poll: Most Want GOP to Keep Fighting
I had expected to see Obama get a slight bump following the passage of the health care bill this weekend. According to Gallup, the favorables jumped 4 points from 45% in favor of the bill before the vote to 49% in favor of the bill after the vote. And Obama’s job approval rating jumped to 51% from a low of 46% just about a week ago. In general, Gallup has tracked more favorably for health care reform than most other polls, and by a pretty good margin. RealClearPolitics does a great job of tracking multiple polls, and you can see here that Gallup tracked the favorables of the health care reform bill by 4-10 points higher than just about everybody else. So even if health care reform gets a similar bump in the other polls, it will still be seen as an unfavorable bill by most Americans.

But what I found more interesting was in a new CBS poll that found that 62% of those polled WANT the republicans to continue to challenge the health care bill.

From CBS: “The poll finds that 62 percent want Congressional Republicans to keep challenging the bill, while 33 percent say they should not do so. Nearly nine in ten Republicans and two in three independents want the GOP to keep challenging. Even 41 percent of Democrats support continued challenges.”

Threats and Violence are Never Acceptable
Lots of media coverage of threats from health care reform opponents against democrats who voted for the legislation. This is just wrong. Though it’s interesting that Bart Stupak was receiving threats from the left when he had planned to vote against the bill, but it’s not until he receives threats from the right for voting for the bill that it becomes a news story.

There are crazies on both sides. I condemn the behavior of these extremists on the right just as I condemned the behavior of the extremists on the left.

And a Little More Reading Material
Two more articles to keep the juices flowing. This one is from IBD and details 20 ways the Obama-Care will take away our freedoms. And some coverage from PolitiFact with their top ten facts to know about health care reform.

Do you want to know what drives me crazy about our federal government? Well, lots of things drive me crazy. But in light of the passage of Obama-Care last night, simple mathematics just never add up in Washington.

I drive a ‘96 pickup truck. Some day it will need to be replaced. We’re hoping that it lasts long enough so that we have our car paid off by the time we have to replace the truck. But what if my truck dies next week? It would be difficult for us to be a one car family. And it will be very difficult for us to add a second car payment to our budget. Decisions will have to be made. What else can we cut from our budget? What are our opportunities to increase our income?

If this particular health care reform bill is so vital to the future of our country, doesn’t that in turn mean that it’s MORE important than other items currently in the budget?

According to the U.S. Treasury, here’s where we spent our federal tax money in 2009.

Department of Agriculture: $114 billion
Department of Commerce: $11 billion
Department of Defense: $637 billion
Department of Education: $53 billion
Department of Energy: $24 billion
Department of Health and Human Services: $796 billion
Department of Homeland Security: $52 billion

This is just a partial overview, but you get the picture. (Data provided by the U.S. Treasury.) We really couldn’t come up with a few cuts elsewhere to help pay for health care reform?

Fuzzy Math 101

Now back to my original point. I guess it’s important to understand that supporters of this legislation don’t care what it costs. Explaining to them that the math doesn’t add up falls on deaf ears. They point to the recent report released by the CBO and say “See, this will reduce the deficit.” Well, the CBO report doesn’t tell the whole picture. And this bill will not reduce the deficit.

1. The CBO was told that we’ll cut $500 billion from Medicare. The CBO doesn’t take into account how, or if, it will actually happen. All they take into account is that they’re told that we will cut $500 billion from Medicare to help pay for health care reform.

So how will we do it? I don’t know. And obviously the government doesn’t know either. They plan to put a panel in place to make these decisions later.

So what happens if they don’t find $500 billion in cuts? Well, nothing happens. The bill has already become law. Who is going to track this and hold Obama / Pelosi / Reid accountable in 2020 if we don’t really cut $500 billion from Medicare?

With millions of baby boomers soon to flood Medicare, there’s not a chance that we’ll actually be able to cut $500 billion from Medicare.

2. The CBO was told that we’d raise another $500 billion through tax increases. The CBO doesn’t take into account how, or if, it will actually happen. All they take into account is that they’re told that we will provide an additional $500 billion through taxes.

So how will we do it? I don’t know. And obviously the government doesn’t know either, as many of the tax increases that will be needed to reach $500 billion do not exist yet. This puts the burden on future congresspeople to pass new tax increases to cover health care reform.

So what happens if they don’t raise $500 billion in new taxes? Well, nothing happens. The bill has already become law. Who is going to track this and hold Obama / Pelosi / Reid accountable in 2020 if we don’t really raise $500 billion in new taxes?

3. What about the expansion of Medicaid that will be required to fulfill the requirements of this bill? Well the CBO doesn’t care about that either. Much of this expense will be picked up by the states who implement Medicaid. Where will this money come from? Out of the state’s budget. That doesn’t factor into the CBO’s findings, or their cost analysis of health care reform.

Kansas is already going through a significant financial crisis, as are most states. Obama has pledged to help the states. With what money? Oh don’t worry, we’ll figure that out later. That doesn’t need to be included when determining the costs of the bill.

4. Last night the House of Representatives made some “reconciliations” to the Senate bill that was passed by the House. My understanding is that one of the components in the reconciliation bill deals with increasing payments to doctors through Medicare compared to the Senate’s bill, thus increasing the expense of the bill. When asked about the increased cost, Congressman Barney Frank replied “We’ll pay for that later.” So once again, more expenses that are not covered in the CBO’s analysis.

5. One component of this bill is that it mandates that Americans purchase health insurance. Who will enforce this? Well the IRS will enforce it. And it has been estimated that the IRS will need to add more than 16,000 employees in order to manage their new responsibilities. Who will pay for this? We will. Did the CBO factor this into their cost analysis? Nope.

This legislation is not budget neutral as we’ve been told repeatedly by supporters. It will cost us a lot of money.

NOTE: I’ve left my original post intact below, but the New England Journal of Medicine is now distancing themselves from this survey and content. As of this morning they had posted two detailed articles about the results of a survey conducted by The Medicus Firm. They have now removed the two articles and instead are linking to The Medicus Firms’ website for information about the survey. The NEJM now says: “The opinions expressed in the article linked to above represent those of The Medicus Firm only. That article does not represent the opinions of the New England Journal of Medicine or the Massachusetts Medical Society.”

I still find the survey interesting, but now it’s harder to know how closely this survey mirrors the opinions of doctors across the country. Maybe Rasmussen will pick up these same questions and do a new survey for us.

Lee

*****

Let me start with a personal story. I good friend of mine was seeing a doctor in Kansas City this last summer. The doctor is a specialist and widely considered among the best in his field in the country. The doctor told my friend that he was working on his MBA, and would be leaving medicine if Obama-Care passed.

One of the complaints among opponents about this massive healthcare reform bill is that it will drive doctors away from medicine. And even though I knew of a personal story about a doctor who was already planning to leave medicine, it’s been difficult for me to tell how much of this was rhetoric, and how much of it was legitimate. Until now.

In a new article from the New England Journal of Medicine, they report that a recent survey shows that “46.3% of primary care physicians (family medicine and internal medicine) feel that the passing of health reform will either force them out of medicine or make them want to leave medicine.”

See the full story here in the NEJM. And here is a quick overview of the key findings. (NOTE: These links used to take you to the two articles on NEMJ’s website, but now take you to information where they explain that it wasn’t their survey.)

Here are a few of the comments that stuck out to me:

Physicians agree that healthcare reform is needed. Only 3.6% of physicians prefer the “status quo” and feel that the U.S. health care system is best “as is”.

Only 28.7% of physicians are in favor of a public option.

62.7% of physicians feel that health reform is needed but should be implemented in a more targeted, gradual way, as opposed to the sweeping overhaul that is in legislation.

The Bureau of Labor Statistics “predicts a more than a 22 percent increase in physician jobs during the ten-year period ending in 2018. This places physician careers in the top 20 fastest-growing occupations from 2008 to 2018. Meanwhile, nearly one-third of physicians responding to the survey indicated that they will want to leave medical practice after health reform is implemented.”

“What many people may not realize is that health reform could impact physician supply in such a way that the quality of health care could suffer,” said Steve Marsh, managing partner at The Medicus Firm in Dallas. “The reality is that there may not be enough doctors to provide quality medical care to the millions of newly insured patients.”

Let me put it this way — doctors understand that we need healthcare reform. But they already know what it’s like for the federal government to get their hooks into health care. And they don’t want any more of it. They deal with Medicare every day. And they watch as Canadians come to the U.S. because they’re unable to receive high-quality of care in a reasonable amount of time in Canada.

The health care debate is an interesting one. People are passionate on both sides of this issue. And for every comment I receive on this blog, I also receive a handful of emails from people who don’t want to express their opinions publicly. Liberals are mad at republicans because they view the republicans as obstructionists for standing in their way in passing health care reform. Republicans are the “party of no” say the liberals. And the conservatives and independents are mad at democrats for failing to listen to the people and attempting to pass a massive federal program despite waning public support.

As usual, I have a few opinions to share on both sides of this. But first let me tell you a story about a bus system.

The “T”
For those of you who don’t know much about Lawrence, let me give you a quick overview of our community. We’re a college town with a population of less than 100,000. Lawrence is a liberal community embedded in a conservative state. The views of our community are much different than they are for most of the Midwest. We have more in common philosophically with San Francisco than we do Wichita.

Several years ago we were deciding on whether or not Lawrence should have a public transportation system. Liberals explained how important the bus system would be to the community, and how it would be financially self-sustaining within a few years. Conservatives countered that Lawrence was just too small, and didn’t need a bus system. My point at the time was that there was no way that public transit would be self-sustaining financially, and that the debate needed to be on whether or not we, as a community, were willing to pay for a bus system.

The voters supported the bill, and Lawrence Transit, typically referred to as the “T”, was born.

To make a long story short, ridership has been abysmal. Lawrence has been losing approximately $2.5 million per year on the “T”. And at the last major election we were asked to vote for a significant sales tax increase in order to keep public transit afloat. And like good liberals, we voted for the tax increase to save the bus system.

So my question is this: Did our city’s liberals really believe that the bus system would be self-sustaining? Did they talk themselves into believing their wildly optimistic revenue projections? Or were the projections just distractions to begin with? Financial slight of hand so to speak. The truth is probably a little of both. Some of the liberals believed the financial projections because that’s what they wanted to believe. And others probably didn’t care. They were so determined that our city “needed” a bus system that they didn’t care about the future costs or flawed revenue projections.

Liberals wanted what they always want, and that’s for the government to step in and right social wrongs. Lawrence liberals felt like it was wrong for us not to offer public transportation to our community. But instead of debating the merits of public transportation in a city of less than 100,000 people, many of whom were already being served by KU’s bus system, they focused on their wildly optimistic projections of revenues to explain how there was no reason NOT to create a public transit system. At the time I viewed their reasoning as flawed and intellectually dishonest.

Give the Democrats their Props
The republicans were in control of Congress from 1994 to 2006 and failed to solve our country’s health care problems. I give a lot of credit to the democrats for moving forward and attempting to solve this problem. I think it’s interesting that often we condemn politicians for doing what’s in their own self-interest, and not doing what’s best for the country. But in this case we’re witnessing the democrats commit political suicide as they attempt to pass what they perceive as a solution to our country’s health care problems. And now many on the right are condemning the democrats for sticking to their principles.

But a word to democrats, your cry of republican obstructionism is lame. The democrats decided to throw a big party and didn’t invite the republicans. Don’t blame the republicans for whining about it. With significant majorities in the Senate and the House, and a democrat in the White House, democrats viewed this as their opportunity to pass a massive federal program to “fix” health care. They knew that fiscal conservatives would never get onboard with their plans, so they didn’t invite them to the party. They thought that they could force this legislation through Congress without the republicans. And now democrats are whining because they haven’t been able to pass this legislation despite majorities in the Senate and the House.

Liberals want what they always want, and that’s for the government to step in and right social wrongs. Liberals want nationalized health care, and this legislation is a significant step towards a single-payer, government run solution. I don’t begrudge liberals for this. But I do begrudge the intellectual dishonesty of many of their arguments for this legislation. I’ve already covered several in past posts, but here are a couple more.

Financial Slight of Hand #1: The president has repeatedly talked about the 10 year and 20 year projections for costs associated with their plan. But the numbers are flawed and misleading. In the first ten years, the program is paid for because we have almost ten years of tax increases and Medicare cuts, but most the benefits only kick in during the second half of this ten year projection. So we’re paying for the plan for ten years, but only receiving five years of benefits. Why? Because that was the only way to make the numbers work over the first ten years.

But the financial projections over the first 20 years are just as flawed and misleading. The 20 year projection is based on significant future budget cuts that are not included in the current legislation. Even the CBO recognizes that these budget cuts are never likely to happen, making the 20 year projection irrelevant.

Financial Slight of Hand #2: The administration continues to claim that by adding more people (the currently uninsured) to the health insurance pool, insurance rates will go down, even though most projections still show premiums on the rise with the passage of their bill. The plan is to force all Americans to buy health insurance. The reasoning is that since many of our “uninsured” are actually young, healthy Americans, adding them to the pool will reduce premiums. This is again flawed logic. Many of these young Americans will continue to go without coverage and risk the potential penalties. And it’s possible that forcing Americans to buy health insurance will be found to be un-Constitutional anyway.

But the people who are more expensive to cover will certainly enter the health insurance pool. People who cannot afford premiums because of health issues, and those who are currently denied coverage for pre-existing conditions, will drive up health insurance premiums.

Like the Lawrence liberals who focused on wildly optimistic revenue numbers for a public transportation system, democrats would rather make the case for expanding the government’s role in health care based off of flawed financial projections than the merits of the program. I’d call this intellectually dishonest.

Note: Here’s a post I wrote about Congress being empowered by their beliefs in healthcare reform.

I’ve been wanting to write this post for weeks, but have had little time on my hands. I’ve watched the so-called experts and talking heads spew opinions on why healthcare reform failed, and truthfully, I think most of them have missed the boat.

And I was incredibly shocked to see President Obama unveil his new plan for health care this week just days before the “bipartisan health care summit”. We’ll come back to this.

Failure of a Plan is often a Failure to Plan
It’s easy to look at what transpired the last few months and point to them as reasons why healthcare reform failed. Waning public support. The backroom deals. Artificial time lines. The lack of certain logical solutions in the plan such as tort reform or to allow insurance companies to compete across state lines. The size of the plan. And general mistrust of the process.

But as with most failed plans, it’s best to look at the beginning of the process, not the middle or the end.

Let’s take a college student preparing for a final exam as an example. The day before her test her car breaks down and she’s unable to spend the necessary time to cram for the test. She fails. Did she fail because her car broke down? Probably not. She failed because of the number of times she skipped class and never completed her homework along the way. She didn’t have a plan from the beginning of the class as how to succeed at the end of the class.

I think that President Obama, Harry Reid and Nancy Pelosi have much in common with the student who flunked because she failed to execute a well designed plan.

Where President Obama Failed
I have spent a significant amount of time studying leadership and management. I have come to understand that leaders and managers require different skill sets to be successful. And that a president of a company, or a country, needs to have strong leadership and management skills to be successful.

There’s a common scenario described in many of the books about successfully managing people. Here’s the basic example:

A bad sales manager meets with his sales staff and tells them he wants them to increase their sales by 10% and walks out of the room.

A good sales managers meets individually with her sales people and asks them what their goals are for increasing their sales, how they plan to get there, and what assistance she can be along the way.

In the first scenario the staff feels disconnected with the goal. It seems arbitrary. There’s no “buy in” of the goal. There is no clear path to achieve the goal. And no support system in place for success.

In the second scenario the staff feels like they’re able to set their own goals and help to develop the process. They “buy in” to the goals because they’re the ones who set the goals. They are now responsible for meeting these goals. And what good managers often find out is that good employees will often set their goals higher than what the manager would have set them to be in the first place.

So what did the president do? He walked into a room and said “I want healthcare reform on my desk by this date” and he walked out. Harry Reid and Nancy Pelosi were now responsible for getting a bill on the president’s desk. But Congress had no “buy in” to the process. And certainly no clear direction as how to succeed.

What should the president have done? What would a good manager do? I can tell you what the good sales manager would have done. She would have pulled in several members of Congress, from the Senate and the House, and leaders from both parties, sat them all around a table, and said: “We need to fix health care. We need to control costs. We need to find a way to cover the people who cannot buy coverage — either because they can’t afford it, or have a pre-existing condition. And we need to maintain the high-quality of care we enjoy today. How do we accomplish this?” She would ask this group to provide an outline of a plan by a certain date, and ask THEM to set a date for when THEY would get a bill on her desk.

You now have “buy in” from both parties to the process. They have set their own goals and time lines. And now feel responsibility for meeting these goals.

Where Congress Failed
I have always thought of myself as a problem solver. I look at a problem with an open mind. Identify the problem. Set a goal. Accumulate information. Develop different scenarios. And then choose a path that solves the problem and accomplishes the goal.

Does anybody believe that this is how Congress, or more specifically Harry Reid and Nancy Pelosi, set out to fix health care?

No. They had a pre-determined outcome in mind — a large government solution. And from there they worked backwards to explain how their “solution” would cure the problems we face with health care. (Here’s a link to a previous post as to why the plan in Congress would lead to a single payer, government run system.)

My Advice to the President
I have been in favor of this “bipartisan health care summit”. Get the leaders from both parties, and from both the House and the Senate together. Sit them around a big table. President Obama needs to walk into the room with a large Hefty bag filled with shredded paper, throw it on the table, and say: “We’re starting over. We need to fix health care. We need to control costs. We need to find a way to cover the people who cannot buy coverage — either because they can’t afford it, or have a pre-existing condition. And we need to maintain the high-quality of care we enjoy today. How do we accomplish this?”

The Last Word
Well this would have been my advice. But now the president has unveiled his “new” health care plan just days before the summit. Republicans who had approached the summit with skepticism were right. It was all a ploy.

According to a new post on Rasmussen Reports:

“Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That’s the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June.”

The report goes on to say, “The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan… Intensity remains stronger among those who oppose the push to change the nation’s health care system: 21% Strongly Favor the plan while 43% are Strongly Opposed.”

As Scott Rasmussen, president of Rasmussen Reports, wrote in the Wall Street Journal: “The most important fundamental is that 68% of American voters have health insurance coverage they rate good or excellent. … Most of these voters approach the health care reform debate fearing that they have more to lose than to gain.”