Observation Deck

NCB: Remember The Big Picture

Providers must keep in mind why competitive bidding is such a backward move for America.

• By Michael Schleipfer
• Apr 01, 2012

Competitive bidding is projected to save less than two-tenths of 1 percent in healthcare costs within our current healthcare system. While any savings in our healthcare system appears good on the surface, studies released by The VGM Group indicate these savings will come at an estimated cost of 10,000 businesses and 100,000 taxpaying jobs in the DME industry alone — before accounting for losses within the communities that these jobs are supporting.

Job loss is only the tip of the iceberg. This planned attempt to save the American healthcare system — a $2.5 trillion train wreck — by trimming two tenths of 1 percent will not alter the course of economic history in a positive way, but instead continue the downward pressure on our middle class, which has suffered the economic contradictions of the past several decades most keenly. Four billion eight hundred million is to $2.5 trillion, what less than one half of one penny is to $25.00. Let’s just stop for a moment and ask ourselves this question as a society, economists, social scientists and healthcare professionals: “Will that half of one penny save our healthcare system or will it contribute to a larger problem and cost us more in the long run?”

Why would Congress institute and support a program that will eliminate 100,000 jobs that are held by heads of households who pay taxes, fund their own retirement plans, contribute to Medicare and Medicaid, and financially support the local communities and its social networks? Not only is it a simple case of bad math to anticipate a reduction in Medicare and Medicaid cost; housing subsistence; the Special Supplemental Nutrition Program for Women, Infants and Children; and food stamp programs by cutting jobs, but also, and more importantly, we are missing the big picture. Looking further ahead, perhaps into their retirement years, those same once-employed, once-productive workers will be forced to tap into that very same financial support again without the benefit of their contributions to the system!

Wouldn’t the projected savings of two-tenths of 1 percent be better applied to keeping our workers employed in the jobs that our industry trained them for in the first place? How about supporting an industry that serves a real purpose, rather that promoting dead-end jobs in the food industry or within the underground economy mowing lawns? Our lawmakers and healthcare policy experts need to consider occupational inheritance, as well as the rate and direction of social mobility, not just the cost of a walker.

The home medical equipment and home healthcare industries were created to solve a problem — a function we still serve well. Altering the one solution that is working within a system that is in crisis would be synonymous to reducing the size of the patch on a leaky dam. Competitive bidding will prove to be yet another unsustainable model that will only continue to accelerate our debt burden — costing not only the HME industry, but also the entire nation much, much more.

Take a look below the surface of this frightening iceberg. Every time a worker loses a job, his or her personal health is impacted—emotionally, mentally and physically. A person’s health is as much a product of education, financial resources and social status as it is of genetic make-up, personal habits and exposure to disease. The latest research clearly establishes that policymakers need to address social inequalities in order to reduce health inequalities.

For instance, psychological stress, caused by job loss, is a documented factor in numerous disorders including cardiovascular disease, which is one of five major conditions from which the Department of Health and Human Services claims 25 percent of our population is reported to suffer. Other major and costly diseases include heart disease, mood disorders, diabetes, asthma and hypertension. Nationwide, spending to treat these five conditions accounted for the largest increase in total healthcare spending between 1987 and 2000, with total expenses accounting for 49 percent.

It is not difficult to connect the dots and conclude that the killing off of 10,000 businesses and the 100,000 jobs they provide will come at a tremendous expense to our nation — not a savings. If we eliminate the jobs as the lawmakers say we should, rather than reducing healthcare costs by a more rational means we will instead increase the burden on our nation.

Competitive bidding will only perpetuate this crisis; ultimately, the longterm health of our society will be paid for in healthcare dollars. We need to call on a group of representatives in Washington who operate on a higher level of understanding and can see the bigger picture. It is no longer sufficient to tell people to pull themselves up by their bootstraps, or suck it up, when our lawmakers legislate the elimination of the very jobs that would otherwise allow our workers to stand on the shoulders of their parents.

Eliminating 100,000 jobs in our industry will turn current tax base contributors into tax base consumers, economic contributors into state and federal burdens, and healthy workers into patients. For the bean counters, pencil pushers, mathematicians and politicians the equation looks like this: Every life lost to cancer, mental health, pulmonary or circulatory disorder multiplied by the cost of treatment plus the loss of tax base equals the true cost to the nation and families.

Take competitive bidding out of the equation to solve the American healthcare crisis and let citizens remain in their own homes during times of illness or recovery. Let DME providers do what we do best — hire and maintain qualified employees to deliver quality services at reasonable prices — and alleviate, not contribute to, our nation’s debt burden. Four billion eight hundred million dollars in savings will ultimately cost us tens of billions more in social and healthcare problems that we don’t want or need to create. Look below the surface and you will see that the health implications and related social issues by eliminating 100,000 jobs will cause us ruin, not national prosperity.

This article originally appeared in the April 2012 issue of HME Business.