I wrote on this blog a while ago that I viewed the glass half full when it came to healthcare reform. I thought we might actually accomplish health reform by this fall. Well, it’s now late July, and I unfortunately have changed that outlook. A friend of mine told me she was surprised by my earlier optimism, and I guess she was right. Here are four key reasons why the prospects have dimmed:

1. Controversy over a public health insurance plan. There are several reform plans floating around Washington, D.C., but every version includes some form of a public insurance plan. The theory is that a public plan would provide another insurance option for those lacking insurance, and since it wouldn’t need to generate large profits, its medical loss ratios (a fancy way of saying how much of every dollar is spent on medical care versus overhead) would be controlled and it would have low overhead like Medicare. Insurance companies, worried about the competition, have targeted this as their number one priority to fight. Organized labor, however, wants the option. My national organization, the American Hospital Association, prefers the Senate Finance Committee’s version of the public plan, which is organized in a co-op fashion and would allow providers to negotiate rates with the co-op. But in any event, you have a clash of titans on this issue with the insurance industry versus labor.
   
   
2. The cost of healthcare reform. The President has indicated he will not sign a bill unless it is budget neutral. However, the well-respected (and nonpartisan) Congressional Budget Office came out about two weeks ago and pointed out that the bills it has been able to “score” (a Washington term for figuring out the cost of the legislation) actually cost more money. Which leads us to item 3…
   
   
3. The “Blue Dog” fight. The “Blue Dog Coalition” of the House of Representatives is made up of approximately 51 fiscally conservative Congress members. Although the Democrats control both houses of Congress, the Blue Dogs are a necessary part of that majority. The CBO determination of a couple weeks ago has made the Blue Dogs question the efforts in Congress, and they are fighting hard to cut more costs in the reform bills.
   
   
4. Medicaid expansions. Earlier drafts of the various reform bills called for Medicaid expansions. Medicaid is a program for low-income people which is jointly funded by the federal government and state governments. In New Jersey, the cost is shared 50-50. So, no surprise, the nation’s governors have raised alarms about this element, pointing out that they too have very serious budget deficits to deal with and cannot take on the added expense of Medicaid expansion.

So some serious fault lines are emerging. The President is using his bully pulpit every day to talk up the importance of healthcare reform to the American people. His goal was to have bills passed through both the Senate and the House before the August recess, but it appears that at least one of the houses won’t make that deadline. I think a great deal will be determined by what happens when members of Congress take their August recess and go home to talk to their constituents about what they think of national healthcare reform. The New Jersey delegation has done a good job of reaching out to people, holding town hall forums around the state.

I’m not sure where my glass stands right now – half full or half empty. I still ardently hope that we can achieve national healthcare reform, but we need to get it right and not rush for the sake of rushing. Far too much is at stake for New Jersey’s healthcare system and the people who depend on it.