Friday, July 17, 2009

Congressional Time

Looks like when it comes to health care reform that Capital Hill sets a pace in “congressional time” - they will get health care reform completed when it suits Congress’ needs and not necessarily at the rapid pace set by President Obama. The delays might be a good thing in the end.

While I have been among the first to call for nationally orchestrated changes, I have so far not been impressed with all provisions of the current health care reform legislation moving through the House and Senate. The report from the Congressional Budget Office seems to bear out the need for a more measured approach to the situation. According to the CBO, if enacted the current proposals would increase not decrease the total cost in the health care system. Of course, Republicans against health care system changes were quick to seize on the report as support for their “status quo” argument. Democrats criticized the report for leaving out material savings that would accrue from preventative care if the health care coverage provision were enacted and all citizens were covered by insurance.

What is missing from the current legislation is genuine support for consumer directed health care. There is still a view that some Big Brother must be involved - the employer or government. Employers do not buy cars, arrange mortgages, decide on college education or pick out caskets. Why in this age of e-commerce is the employer still in the middle of the health care decision? Let government serve as a guardian for those who cannot do for themselves and leave the rest of us to our own devices.

Consumer-centric health care is good business and means improved health care. This is why Crystal Equity Research has buy recommendations on Health Grades (HGRD: Nasdaq), a provider of health care provider quality ratings for consumers, and eHealth (EHTH: Nasdaq), an on-line health insurance brokerage. Health Grades is amassing more information in one place about hospital and doctors than most other services, allowing the patient to choose doctors or hospitals knowing how well they have performed in the past. eHealth’s platform allows individuals to shop, compare and pay for health insurance coverage online. The services of both companies put the individual in the driver’s seat and pave the way for cost savings down road.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Crystal Equity Research has a buy recommendation on both HGRD and EHTH.

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