Tuesday, July 21, 2009

Healthcare industry has a prize Obama wants

The news is saturated with the healthcare debate.The pricetag.A public health option.Insuring everyone including illegal immigrants.The surtax on the rich.Much to talk about and discuss.

What I don't hear much of is one of the main prizes of the Government nationalizing the healthcare system.The insurance companies all carry a liquid reserve fund for paying out claims.These amounts are vastly different depending on the size of the company and types of coverage extended.

This amount is certain to be in the trillions industry wide.If Obama succeeds in implementing the public health option,we can easily see the path.Private health companies will be put out of business unable to compete with a Government option with virtually unlimited finances and no profit requirement.

Just as a sidenote,I recall when I used to manage a small car audio business years ago,we carried the Pioneer line of products.We were located in Lapeer and our closest Pioneer competitor was ABC warehouse in Flint.ABC used to sell the entry level radios cheaper than I could buy them.We tried to compete with a exceptional service level and hoped to generate add-on sales to make up the difference.At the end of the day,it was fruitless as people shopping for the lowest price only aren't concerned with that approach.The analogy is similar in that you can't compete with the big boys on certain levels.Now,we did just fine on the higher end units and made money as a business,but we couldn't compete across the board.

Using the Obama mythical numbers of close to 50 million uninsured,these are people who want just a basic level of health insurance.The cheapest possible option due to their financial situation.Which plan do you think they and most small businesses will choose when cost is of primary concern?

This is why the private industry will be run out of town.When Obama accomplishes this,he will then control the pursestrings to the reserve funds.No different than the SS and Medicare trustfunds which were stripped of all their money.As with any Obama agenda item,it's all about the control and the power.If Government rather than private healthcare companies control the money,they have all the power.Quite simple.

Most comparisons of the effectiveness of nationalized healthcare compare it to the Europe or Canadien models.We need look no further than the failed Massachusetts state model to see that it doesn't work.Their costs are the highest in the country.100% still aren't insured.And the quality of service and wait times fail miserably in the polls taken.More to come...

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