My post on the Supreme Court’s recent decision upholding Obamacare provoked a response which I feel compelled to share with you. It was submitted by Bill Potter, an attorney who spent twenty years as a member of a not for profit health care insurance company and a large multi-specialty physicians group. The system has about 9000 employees and $2 billion annual revenue. He also chaired a regional consortium of health care providers made up of academicians and business leaders which explored ways to moderate health care costs. As he says, “In neither capacity was I able to have a significant impact on costs. Real reform must begin with the manner in which Medicare and Medicaid reimburse providers. Private insurers will then follow suit.” His unedited comments are printed below.
“I think that the Affordable Care Act has been a positive step. However, the repeal of the individual mandate has weakened its benefits substantially. We now have a law which requires that insurers cover pre-existing conditions but does not require people to purchase insurance. For many, that means that they have no incentive to acquire insurance until they become ill which means that we end up with an insurance pool of sick people which inflates costs for everyone. In order for an insurance pool to be actuarially viable, it must include primarily healthy people.
Of course, the great weakness of the Affordable Care Act is that it dealt almost exclusively with how we pay for our existing health system rather than the amounts we pay for health care. Our healthcare system is bloated and ineffective. While it is by far the most expensive system in the world, it achieves far from the best results. Republicans have interfered with any attempt to have a serious discussion about fixing the system but many Democrats, too, are fearful of taking on the American Medical Association, the American Hospital Association, Big Pharma and medical device manufacturers who stand in the way of logical reforms. The effective reforms are well known but cannot be implemented without incurring the wrath of these groups. Our system incentivizes health care providers to provide treatment by performing procedures and administering diagnostic tests. It does not provide incentives to prevent illness or cure illness. On the contrary, it incentivizes providers to keep the patient coming back for continued treatment. Chronic illnesses account for an overwhelming portion of the costs. Ezekiel Emanuel, Rahm’s brother, and others have written about this extensively. During the drafting of the ACA, I spoke with Tom Daschle at a meeting of the AHA and asked him why they were not addressing that. He stated candidly that they knew that it was politically impossible to overcome the opposition of all of the aforementioned interest groups. Everyone loves their doctor but the AMA may be the biggest impediment to real reform. We need to pay for results rather than for tests and procedures. We need to incentivize providers to treat efficiently and effectively.
Since most people have had an unfavorable experience with an insurance company, it is much easier to make insurers the villains. The reality is that most health insurers operate on very thin margins, at least in comparison to almost every other segment of our health care system.
To me, it is an insoluble problem in our current political system, analogous to the military-industrial complex. Everyone knows that it is bloated and inefficient but those who profit from the system have structured it so that no one in Congress is willing to take it on, knowing that to do so is political suicide. Like defense spending, I fear that we will have the will for a serious dialogue only after it is too late. It is a tragedy because we could address so many other societal problems if we could reduce spending for defense and for health care to reasonable levels.
The most encouraging development in the decision by SCOTUS this week is that it demonstrates that the rule of law still prevails over politics, at least for the present time. That is some consolation.”
Bill Potter
Excellent commentary, Bill. You’re right about the timidity of Republicans AND Democrats in defying the “medical industrial complex.” You’re also right about your comments on chronic illnesses and pre-existing conditions UNLESS we mandate that everyone buys into the system. Big Pharma achieved its objective when Congress forbade negotiations for setting limits on the cost of medicines, and in giving in to the somewhat specious arguments about research and development. Our current system is too costly; results can vary; and, unfortunately, politicians will remain the same weak creatures they have always been.