Will The Affordable Care Act Succeed?

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Will The Affordable Care Act Succeed?

Posted by FulcrumTech in Blog, Healthcare Reform, Healthcare Reform Blog, March 2013 on March 26th, 2013 | No Comments »

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This is a question that will dominate the political landscape for the foreseeable future.  Please allow me to make the following plea (in the interest of our collective sanity):

Clarity is more important than agreement…..

In other words, there will be disagreement on this critical issue—we live in a country with freedom of thought and expression.  We form our opinions based on available information, and disagreement on our conclusions is inevitable.  But, we should NOT disagree on the facts.  A reasonable goal in a discussion of the complex world of healthcare is to seek clarity.  That is our goal here regarding the question, will the Affordable Care Act (ACA) succeed?

David Nash, MD and Stuart Butler, PhD are engaged in a rigorous (not rancorous) discussion about the proper role of the federal government in our healthcare system.  That discussion has been playing out on the pages of The Jewish Exponent and The Philadelphia Inquirer, and will continue live and in person on Thursday, March 28, as part of the Civil Discourse Project at Beth Sholom Congregation in Elkins Park, PA.

Seeking Clarity—First The Facts

Dr. Nash eloquently argues that what is missing from our healthcare system is the concept of ‘value’.  We spend too much, and get too little.  On a per capita basis, we spend 30% to 50% more than our westernized competitor countries, yet we are ranked 37th on societal measures of well-being.  Here are certain key facts (where there should be no disagreement).

  1. Healthcare is a $3 trillion annual industry in the United States, with $1 trillion or more of the dollars wasted on unnecessary, inappropriate, and poor quality care (plus administrative waste).
  2. Medical bills make no sense (see Steven Brill in Time magazine, “Why Medical Bills Are Killing Us”), thus rendering irrational much of the healthcare decision-making process.
  3. There is a drastic misallocation of resources in our healthcare system—too little spent on primary care, and too much spent on specialty and hospital care.

If we agree on these facts, the solution becomes clearer—we must reduce (and ideally eliminate) wasteful spending, and thereby increase value.  But how?

Can The Federal Government Solve These Problems?

I don’t think so, because there is scant evidence of their ability to do so in healthcare or other industries.  There is a proper role for government in healthcare, but not a top-down, centrally controlled, and highly regulated approach.  Medicare is such a system, and it has not worked as a model for better outcomes at a lower cost (i.e., increased value).

Medicare is a politicized system of healthcare, not an economic system.  In a politicized system, those with the most political power make the rules.  There are numerous examples of systemic Medicare failures: setting provider reimbursement rates (Replace The RUC), fraud and abuse, defensive medicine, and unnecessary care in the last year of life.   As Dr. Butler eloquently argues, “figuring out the most efficient way to provide a service….is something that the private sector does very well and the federal government does really poorly”.  Our 45 years of experience with the Medicare system supports this argument.

Should the federal government negotiate with hospitals and doctors, set the rates of payment, and cut the checks?  Or, should the government level the competitive playing field between private insurers, establish rules for competing for customers based on cost and quality, and enforce the rules?  The former has not worked for traditional Medicare, and the latter will work when done properly.

Next Steps

We should have an honest debate about the proper role of government, based on principles of intelligence, candor, and goodwill (Socrates).  The ACA is the law of the land, and WE NEED FOR IT TO SUCCEED (with changes).  In my view, the law can be modified based around the following principles:

  1. Fix Medicare First.  Medicare uses two different approaches: traditional Medicare (Parts A, B, and D) and Medicare Advantage (Part C).  25% of Medicare beneficiaries were enrolled in Part C when ACA was passed into law.  Medicare Advantage can again become an effective approach to private insurer competition based on a ‘defined contribution’ model used in the private sector.  This model can be used appropriately and effectively for all Medicare beneficiaries, and does not “end Medicare as we know it”.
  2. An EFFECTIVE Health Insurance Exchange in Every State.  For those not eligible for Medicare, there should be a single large risk pool that uses the combined purchasing power of businesses and individuals.  But, it should not be the over-engineered, over-regulated ACA variety.  No exclusions and no mandates, with an understandable and transparent marketplace where people can shop for coverage based on quality and cost.

This can be done.  My hope is that it will be done.  If you agree, it’s time to make your voice heard.  Your legislators need to hear from you.

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