How to spend $450 million wisely

June 1, 2014

Blowing through a half-billion dollars is probably a lot harder than it seems

 

 

By Peter J. McDonnell, MD

Perhaps you have heard about the Affordable Care Act (aka Obamacare). One of its goals is to eliminate the problem of having people without medical insurance (a goal I consider laudable). Under the law, states could decide to create their own health-care exchanges on websites or let the federal government handle the process.

My state of Maryland was one of the first states in the country, according to the Washington Post, to announce that it would create its own health insurance marketplace. After spending almost $126 million, however, the site crashed within minutes of opening. According to news reports, no one was sure why the site did not work, how to fix it, or how much any fixes would cost.

So, we are now giving up and will use the system that Connecticut built at an additional cost “between $40 and $50 million.”1

Misery loves company, so it was heartening to see that last week the state of Oregon gave up on its health-care exchange, opting to send its citizens to the federal website.

 

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This capitulation occurred after Oregon had spent $300 million in an unsuccessful effort to make its site work.

So after spending a tad north of $450 million, these two states have nothing to show for their efforts. Now it would be easy for someone like me to criticize these folks for being wastrels, but the fact is that blowing through almost a half-billion dollars in a wise manner is probably a lot harder than it seems.

Could it be done better?

Rather than taking cheap shots at these bicoastal government officials, therefore, I decided to ask whether I could have done better. How, I asked myself, might I have spent these 450 million greenbacks to make the world a better place?

The following options came to mind:

  • An Airbus 380 costs $390 million. That would leave $60 million for me to pay for jet fuel to fly around with my friends who read Ophthalmology Times. This option ranks very highly to me.

  • According to NASA, $450 million is what it costs to launch the Space Shuttle. That would be fun, but the Space Shuttle program has been discontinued for safety reasons.

  • Last year, the Pentagon asked Congress for $450 million to maintain and upgrade the prison in Guantanamo Bay, Cuba. This would not be my favorite use of the funds.

  • Because I like helping people, I gave thought to how I might use the money to benefit many of my fellow citizens. Jos. A. Bank is a male clothier in Maryland that offers a “Buy 1, Get 2 Free” deal on men’s suits. Its website (which is functional) advertises an attractive executive two-button wool suit with pleated-front trousers for $162.50. With the special deal and assuming I could negotiate free alterations, my $450 million would let me purchase more than 8.3 million suits, allowing me to give a nice new suit to every man and male child in Maryland and Oregon (with enough left over for guys in one or two other states as well.

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But because some might criticize me for not spending the money on health care, I did the math and find that, at an average cost of $328 per month for a “mid-tier, silver plan” health insurance coverage on the federal website,3 I could treat 114,329 people to a year’s worth of health insurance.

It is tempting to criticize how others spend money (for example, not all men are fans of pleated trousers). But burning through half a billion bucks is not as easy as it might seem to those who’ve never done it.

 

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Further reading: New patient interface enhances laser refractive cataract surgery

 

References

1.     http://www.washingtonpost.com/local/md-politics/board-of-md-health-insurance-exchange-votes-to-hire-deloitte-to-overhaul-it/2014/04/01/66a3ab54-b9b6-11e3-899e-bb708e3539dd_story.html

2.     http://www.msnbc.com/msnbc/oregon-nevada-massachusetts-maryland-struggle-obamacare-exchanges

3.     http://www.nbcwashington.com/news/health/NATL-ACA-328-Average-Monthly-Health-Insurance-Cost-Under-the-Affordable-Care-Act--225324422.html