On Feb. 21-22 the University of California Irvine Paul Merage School of Business and the UCI School of Medicine sponsored their annual Health Care Forecast Conference, titled "Health Politics and Policies in an Election Year." This nationally acclaimed conference gathered thought leaders together to stimulate the audience about the business of healthcare and its political implications for the future. I share with you a few glimpses of the presentations and my interpretation of their messages.

The first session started with "It's the economy s-----!" With more graphs and charts than a "drug" presentation, James Glassman, PhD, a JP Morgan economist, stated that while 2008 will bring an economic slowdown, we won't see a recession. Another presenter, Jon Gabel, PhD, of the Health Policy and Evaluation National Opinion Research Center, showed a few more graphs to prove that employers continue to provide the bulk of healthcare financing, a trend he predicts will continue. Gabel also demonstrated the high cost of healthcare inflation and the shift to consumers with higher co-pays and deductibles. With a smile and many disclaimers James Baumgardner, PhD, an economist with the Congressional Budget Office proved the obvious: funding of Medicare and Medicaid will become unsustainable without major changes in federal law and policies. His office provides Congress with the economic implications of any change in proposed law or policy. No wonder he had such a good sense of humor.

Brian Biles, MD, presented an extensive history of attempts at health reform and their failure due to provider and insurer resistance. He pointed out the fact that the U.S. outspends all other countries per capita, yet does not rank first in any healthcare measurement. Then Doug Badger, a political insider, stated the obvious. The U.S. pays providers--physicians, hospitals, ancillaries and insurers--more than any other country, which attracts so many people to immigrate here. And there's the economic answer in a nutshell--pay the providers less! Sound familiar? But how? On the physician side, give half-percent increases rather than 10% cuts. Over 10 years as the Consumer Price Index increased 30%, physician reimbursement increased 5%. In my opinion, Medicare gave physicians the golden years of medicine, now the payback will be on the backs of the young physicians. Dr. Biles suggested that if Congress produces healthcare reform in 2009, the new Democratic president will sign it.

But go back to Dr. Gabel's conclusion that "the solution is unaffordable." My opinion is that we should go back to the Reagan solution: expand the Emergency Medical Treatment and Active Labor Act to all Medicare providers and make state licensure contingent on Medicare participation. Make the providers pay to serve. The insurers maintain profitability, pharmaceuticals expand and Wal-Mart expands its medical services--a political win-win.

The session on consumer-driven health plans dealt with the movement for consumers to control more economic decisions with health savings accounts and health reimbursement arrangements as vehicles. William Sharon, a promoter of CDHPs, demonstrated increasing usage of these plans and their benefits for cost reduction and healthier consumers. However, Paul Fronstin, PhD, claimed that a CDHP requires a sophisticated consumer and demonstrated that 401K plans still show poor consumer decision making. Forty percent of workers decline to participate in 401k plans and the 40% that do participate make poor investment choices. He also reinforced the fact that employers continue to provide a simple insurance product for their employees that requires little effort by employer or employee. Although laudable, CDHPs seem to offer little to the overall delivery of healthcare. We'll continue this report next month.