Philly Deals: With Romney or Obama as president, health-care reforms are here to stay

Conservatives fought Social Security, Medicare and the weekend when they were proposed. But once enacted, Republican and Democratic Presidents embraced all three as they became part of American life.

We can expect President Obama's court-tested health-care reforms — which shift payment for uninsured people's health care from hospitals to taxpayers — will also go on, even if Republican Mitt Romney is elected President.

Veteran Philadelphia investor James M. Meyer, of Tower Bridge Advisors, which manages $1 billion in other people's money, wrote a thoughtful account of the costs, purpose and likely durability of "Obamacare," in a note for clients of the West Conshohocken-based investment brokerage Boenning & Scattergood:

"Republicans want to repeal the law. Indeed, the House will vote on or about July 11 to try and do just that. Almost certainly a repeal bill will pass, but just as certain it will die a quick death in the Senate.

"Mitt Romney has suggested that repeal of ObamaCare would be his first Presidential initiative if elected. But that is probably just rhetoric.

"Outright repeal without a realistic alternative isn't going to sit well with the public. Few want to go back to a world where insurers can simply reject high-risk patients, where people can't [change] jobs for fear of losing coverage, or where children under 26 can no longer be covered on their parent's policies.

"Instead, what are needed are mechanisms to make our health-care system more cost efficient. That requirement is going to be the same whether Obama or Romney is elected."

More insurance will bring more taxes — a surcharge on investment income for higher-income Americans, and a tax on medical gadgets, though U.S. Rep. Jim Gerlach (R., Pa.), with device-makers in his district, wants that canceled.

It will cost many billions to extend Medicaid and subsidize insurance sold through state exchanges to the self-employed, workers at small firms, and others whose bosses don't insure.

The government has to attack rising costs, Meyer wrote. Suppliers need incentives to sell the "right" level of health care. Not just more health care. "The patient needs to have an economic stake in the decision to spend money on health care," he wrote. Maybe offer a menu of cost-benefit packages, like in Medicare Part D; incentives for health living; or vouchers.

"The medical ecosystem is going to push back," Meyer added. "Doctors don't make money if they don't see you, hospitals don't make money if you don't go, and drug companies make more money if you pop more pills.

"Proponents of high-cost medicine will use fear terms like 'rationing' to scare us all. But we all know that effective health care isn't the same as more care. Nor is it necessary to do in a hospital what can be done in a doctor's office," as throwaway tests, online data-sharing and other cheaper methods proliferate.

"We can save trillions if we try. We have to. And we are going to move in that direction no matter who is elected President because it is the only possible way to regain fiscal control of our economy. Both Romney and Obama understand that."

Hospital stocks rose when the Supreme Court upheld the law, because it means more insured customers, noted Joseph W. "Chip" Marshall 3d, vice chairman at King of Prussia investment bank Griffin Holdings and onetime head of Temple University hospitals.

But if Republican states make good on threats to stall expanded Medicaid, hospitals there won't get that boost soon, Marshall told me.

"Insurers don't like the new restrictions and consumer protections, so they will be working behind the scenes to get them stripped out by Congress," while funding Republicans who would ease coverage rules, says Wendell Potter, ex-spokesman for insurer Cigna Corp. and an industry critic.

"But rest assured, they will keep the individual mandate in place, despite what they say publicly," he added. To keep insurance costs from rising even faster, Republican leaders "know that the mandate is necessary."