Warren Buffett Says New Health Law Could Help the Ailing Economy

This special guest post was written by Andy Sampson. Please visit his organization's reckless driving lawyer and Virginia injury lawyer websites for more information on the services it provides.

The recent passage of the healthcare reform law has been one of the most contentious government decisions in recent memory. Members of Congress as well as the public expressed incendiary rhetoric concerning the issue, and many of the law's detractors claimed that its passage spelled doom for the American economic infrastructure. However, one of the nation's leading economics experts has voiced a stridently different opinion concerning the new health law. Warren Buffett, the billionaire investment guru, has stated, including during a recent interview with Bloomberg Television, that the new health care law may be just what the faltering American economy needs.

According to Buffett, health care costs are one of the major forces behind the economy's degradation. Buffett claimed that health care costs add up to approximately 18% of the economy of the United States. That, Buffett says, is a serious problem. In response, Buffett gave several reasons as to why he thinks that the Obama administration's health care legislation may actually boost the American economy and help it to regain a measure of stability.

One of the key components of the new health care legislation is a program which will allocate significant amounts of funds towards the analysis and testing of new and existing medications. The idea behind this program is to determine the efficacy of the drugs which are most commonly prescribed for various ailments. Pharmaceutical companies charge exorbitant rates for the proprietary formulas of their most popular medications and those high rates mean massive costs for patients.

When these medications are scrutinized, determinations will be made as to whether or not these medications should continue to be prescribed for the ailments they claim to treat. The end goal of this process is rein in rampant over-prescription of drugs, a policy that has come about as a direct result of pharmaceutical companies' payments to doctors and hospitals. Ending this unscrupulous practice will save untold amounts of money.

Another key component of the health care ruling is a provision designed to slice wasteful spending out of hospital budgets across the nation. Under the new health care system, a nationwide effort will be launched that will closely examine the admission and readmission rates of hospitals and health care institutions. Hospitals with inordinately high rates of readmission will be scrutinized to determine the exact cause of these high rates. Some hospitals continue to offer emergency treatment to returning patients instead of referring these patients to other types of care and rehabilitation.

Hospitals engage in this activity in order to ensure higher profits for themselves. Additionally, when hospitals report higher rates of admissions, they are more likely to qualify for government subsidies that will allow them to pocket more profit. If this practice was curtailed, hospitals could be denied these excess profits.

Although the new health care law may be rampantly unpopular with the American public, much of the disapproval is not founded in statistics and facts. According to Buffett, the health care overhaul is a solid reformation of an ailing health care system that is a major reason that the US economy is suffering. Warren Buffett has claimed that the new law is a step in the right direction but many more efforts to cut costs must be undertaken.

 For more information on the new health care law, please consult Healthcare.gov