A Healthier Way Forward
By Gene Rudd, MD | June 16, 2016
by Gene Rudd, MD
The June 2, 2016 issue of the New England Journal of Medicine included an editorial titled “The ACA and Risk Pools – Insurer Losses in the Setting of Noncompliant Plans.” The first sentence of the article reads, “The viability of health insurance exchanges established under the Affordable Care Act (ACA) is in doubt.” This is a striking admission given the Journal’s unbridled advocacy for ACA.
The article laments that grandfathered plans undermine the ACA’s concept of broadly shared risk. Because President Obama promised that if you liked your plan “you can keep it,” the grandfathered plans now have the unfair advantage of insuring a healthier population. The exchange plans are left with a higher cost population. Insurers offering exchange plans are leaving or threatening to leave. The implied solution is to force all persons onto the government-approved exchange plans.
I am not a conspiracy theorist, but I have come to the conclusion that the pathway we are on will lead to a single payer system. Whether clever people plotted that from the beginning, I do not know. But I think that is the likely consequence of producing a healthcare plan that seems unable to please anyone (unless you like bureaucracy, inefficiency and schemes so complicated they are easy to scam). It is admirable that ACA has made healthcare available to more people, at least temporarily, but it has not addressed the ultimate problem that will sink ACA and any subsequent plan that does not address the problem. The problem is cost.
While I think we can afford the cost of reasonable healthcare for all citizens, we can no longer afford the cost of our healthcare system. Our healthcare is overpriced. We pay too much to maintain a money hunger system. There are too many hands in the system, greedy for profit without contributing value to individuals or society.
In The Evolution of Everything, Matt Ridley documents how household expenses have changed since 1969 based on whether commodities (six basic family needs) were managed in a free market or by government. The percentage of household income spent on food (free market) declined from 22 percent to 13 percent. Healthcare costs (a mixture of government and private, but hardly a free market) rose from 9 percent to 22 percent.
As the Affordable Care Act fails to be acceptable or “affordable,” the most likely path will be greater government control of healthcare. What do you predict? Will it then become more acceptable and affordable, or less?
The story is told of Ludwig Erhard, the director of Germany’s post-war Economic Council. In 1948, he abolished government controls on food and prices, choosing to trust the market rather than the government to produce a better solution. The general of the U.S. occupation forces called to warn him that his advisors thought this was a terrible mistake. Erhard responded, “Herr General, pay no attention to them. My advisers tell me the same thing.” Erhard’s action began Germany’s miraculous post-war recovery. Britain continued rationing another six years, stifling its economic recovery.
A “healthy” way forward is not likely to occur with more government control. Among other things, a health way forward must include these features:
- Free market dynamics, including price and outcome transparency;
- Doctors reclaiming their professional values (e.g., the primacy of the patient, commitment to the poor, etc. ) and reclaiming their leadership in the healthcare system (not just clinical decision-making); and
- Simplification, efficiency and a reasonable return on investment for each therapy.
We should use the flaws and looming failure of ACA as an opportunity to seek a healthier way.
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