SAN FRANCISCO – The deepening recession did not appear to dampen attendees' enthusiasm for the healthcare sector here at the J.P. Morgan conference, nor sadly did it serve to thin out the crowds at the Westin St. Francis, which seemed to be even larger than ever. Most of the throng gathered to hear JP Morgan Chairman/CEO Jamie Dimon speak on a variety of topics including healthcare policy and the current state of the economy.

Right out of the box, Dimon made an argument for the need for some form of universal healthcare in the U.S., noting the fact that there are about 47 million people in this country with no health insurance, a number that is sure to increase as the current recession continues. He argued that employing more preventive medicine would be far more cost-effective and humane than having destitute patients coming in to emergency rooms in various states of deterioration.

"I have a deep belief that it will be a far more effective country if we get this problem fixed and do it now," Dimon said. "It will be cheaper immediately and it will be cheaper in the long run and action should not be deferred because you know that costs are skyrocketing and problems don't age well."

Dimon pointed to a "window of opportunity" to get something done on the universal healthcare front with willing participants in President-elect Barack Obama and his choice as Secretary of Health and Human Services, former Senator Tom Daschle.

He noted that as a country, we're not getting much bang for our healthcare buck. The U.S. spends more than any other country in the world on healthcare, nearly 16% of our GNP goes to pay for it, and life expectancy is actually declining overall instead of increasing in the U.S.

Any new healthcare plan, Dimon said, would likely still contain elements of the prevalent employer-based system, particularly since 175 million people in this country get it that way now but he argued that as a country "we need to go beyond that," to find new solutions. He added that the current system in which healthcare insurance became linked to employment, and a tax-deductible benefit at that, was a "historical accident." Just because the system was set up this way, he argued, does not mean it needs to continue that way.

Some disadvantages of the current model Dimon said include a lack of portability when one leaves a job. He also noted that the current system is not set up to give consumers incentives to make choices that could help it become cheaper and more effective over time.

One component to any new healthcare plan that Dimon said cannot be ignored is the absolute need for universal coverage. "I believe that everyone has to be covered. If you don't cover [all] the people, they will be a burden to everyone else."

As another practical element of any new healthcare system, Dimon said that, "consumers must have skin in the game." If consumers don't demand a policy that finds the cheapest way to provide effective healthcare, he said, "we won't find the cheapest possible way."

Consumer demand for cheaper alternatives to treatment could be a boon to entrepreneurs, Dimon suggested. As an example, he cited Wal-Mart's walk-in clinics, which he said can provide flu shots to the masses cheaper than anyone else. "There will be hundreds of innovations like this if consumers are seeking them out and you're allowed to provide them over time."

Of course one component that Dimon argued would be essential to lowering healthcare costs wouldn't cost the consumer anything, eating a healthier diet and exercising. Dimon suggested that consumers should get some sort of monetary benefit, other than the possibility of a longer life, if they follow preventative care, including getting cancer screenings and annual physicals.

On the economic front Dimon said that a lot of people knew that things were heading south, before the actual collapse occurred. "But people didn't know about, nor do I think they should have known about, is how bad it would get." He said that the most pessimistic people thought that we would have a recession that would wipe out the excesses in the economy and we go on our merry way." Instead the problems were compounded with the primary offenders being a housing bubble and deplorable underwriting from financial institutions.

Dimon characterized the government's dedication to a hefty bailout package for financial markets as a "bold dynamic action over time." He said that while it would be very easy to criticize it, the alternatives were not very palatable. In the spirit of the healthcare conference, Dimon likened the economy to a patient who comes into the emergency room with multiple wounds and multiple lacerations and while surgeons were trying to treat life threatening bleeding, the heart suddenly stopped beating. He said that when we as a country look back at the bailout effort in a decade "I personally believe that over time, this will be looked at as an example of America acting quickly, not acting slow. The actions are starting to work, I think you're starting to see a thawing of the markets."

Oddly enough, Dimon didn't seem to think that specific groups within the healthcare industry needed any form of bailout. During a Q&A session one questioner asked whether J.P. Morgan would help support a biotechnology industry bailout, which the questioner said was "in cardiac arrest." Dimon reasoned that what is needed now is the financial institution bailout that will get the entire system moving again, which will be good for everybody."

As to when the economy might recover, Dimon said it would take a minimum of two quarters for things to start to turn around, and that was his optimistic answer. His "dark side scenario" envisioned an unemployment rate in this country of more than 10% and two-plus years of recession.

Dimon said the recent lengthy Bull market spurned a wave of over exuberance led by the drumbeat of continued unsustainable growth expectations. "I hate to tell you, you can't [always] grow like that. We need to be careful that we're not putting all this pressure on all these companies to find growth."

Any companies that think they will need funding in 2009 from the capital markets and get the opportunity to avail themselves of such monies "should take it," Dimon deadpanned, drawing laughter from the audience. He said the cost of money right now "is rather cheap," and not taking advantage of an opportunity to save a few hundred basis points could be fatal if his aforementioned doomsday scenario plays out.