Why Obamacare Will Fail
Stanley Feld M.D.,FACP,MACE
Obamacare will fail because none of the stakeholders’ vested
interest are aligned.
The storm is brewing in the healthcare system.
Even Democrats are concerned.
Recently, I have been criticized for blaming the impending failure
on President Obama. President Obama would rather blame the impending failure on
congress.
A reader wrote;
“President Obama is a nice
guy. He is trying very hard. Give him a chance.”
It is true. He seems like a nice guy. My criticism is not personal.
The fact is his philosophy and tactics are responsible for the mess. As time
goes on it seems more likely that Obamacare will not work out.
There are multiple reasons for the impending failure. A major
reason is Obamacare is developing new perverse incentives for stakeholders
rather than aligning all the stakeholders’ vested interests.
Obamacare is extraordinarily complex. It is confusing to all the stakeholders,
especially as new rules and regulations
are being written.
By forcing the development of programs such as health insurance
exchanges, accountable care organizations, pay for performance plans,
functional electronic medical records, and the consolidation of healthcare
hospital systems and physicians against their will, Obamacare is creating
tensions and uncertainties that will be difficult to overcome.
Patients’ medical care and their relationships with their
physicians are personal issues. Obamacare is commoditizing medical care. It is
destroying the patient physician relationships. These relationships account for
at least one half of the therapeutic effect of medical treatment.
The 2300 page law usurps the power of the legislative branch of
government and shifts it to the executive branch. This is dangerous. It has
created additional tension and uncertainty for the nation.
Many congressmen who voted for the law did not read the law’s 2300
pages. The implications of much of the law were not understood. It did not have
bipartisan support.
The more complex a law becomes the more likely it is to be unsuccessful.
There is no question the healthcare system nears repairing. Healthcare
costs are exploding. Waste and bureaucracy are expanding. Dysfunctional interactions between
stakeholders are mounting.
All of this results in an inability to deliver effective medical
care.
At present 55% of Americans of all ages receive healthcare
insurance through an employer sponsored healthcare plan. An additional 32% receive
healthcare insurance through government programs.
Thirteen percent (13%) of the population are uninsured or under
insured. Obamacare’s goal is supposed to provide healthcare insurance for that
13%.
Present predictions are that Obamacare will not provide universal
care. It is predicted that it will not save $850 billion dollars. The CBO, on
the basis of numbers provided by the administration, predicted the law would
save $850 prior to the passage of the law. The CBO’s current prediction is Obamacare will
cost the nation an additional $1.2
trillion dollars over 10 years.
Healthcare insurance rates are rising by double digits each year.
Employers are passing the costs of the increasing insurance rates to their
employees through higher deductibles and copays along with lower healthcare
coverage plans.
Obamacare will require
employers, who offer skimpy healthcare benefits such as Mini-med insurance, to
provide more robust ones.
To date the Obama administration has waived more than 2000
employers from providing more robust healthcare insurance coverage. At the time
these waivers expire companies with waivers, such as McDonald’s, will scream
bloody murder.
They will opt out of providing any healthcare insurance at all and
avoid government penalties. They will accomplish this by decreasing the number
of hours an employee will work to less than 30 hours a week. This is not good
for minimum wage workers. The uninsured rolls will increase.
The penalty of $3,000 per employee is less than the $15,000 healthcare
insurance cost per employee for employees working more than 30 hours a week.
Surveys have been published concluding that more than 50% of
employers are planning to drop healthcare insurance coverage.
The federal government is trying to discourage this by invoking
the IRS anti-abuse rules;
Yet as
some have already questioned, can the IRS legitimately utilize rule-making to modify
core components of a federal act? Or will this rule-based clean-up effort
simply spawn more lengthy litigation?”
Obamacare’s health insurance exchange program is in big trouble.
Less than half the states have signed up to participate.
States have opted out
because of the potential cost overruns. States are struggling to balance their
budgets. The federal government is only going to pay for health insurance
exchanges’ development and execution for the first two years. The cost burden will then fall on the states.
The federal government keeps extending the deadline for states to
sign up. The federal government does not have infrastructure or manpower to set
them up.
The health insurance exchanges are supposed to be up and ready to sign
up consumer up in October 2013 and operating in January 2014.
Physicians do not know what to do about Obamacare. Physicians feel
helpless. They know Obamacare cannot work. Physicians do not have a leadership
organization that can direct physicians to have an effective voice.
Accountable Care Organizations (ACO’s) will fail because physicians
are trained to use medical judgment. They have not been trained to obey the
rules of hospital administrators.
They bristle when their value is determined by hospital systems or
federal agencies such as IPAB. They prefer to have their value determined by
their patients.
Physician leadership needs a new mentality to enable physicians to
act and articulate the steps needed to
be taken to repair the healthcare system.
Physicians want the healthcare system to function equitably for
all the stakeholders and effectively for their patients.
Medical organizations have been consistently losing membership
because it has not represented or articulated the needs of practicing
physicians.
If Obamacare works as President Obama hopes, he will have secured
his legacy and solved the long-festering problem of the uninsured.
Obamacare will not solve the problems of increasing healthcare
costs nor provide universal care in its present form. This has been a pipe
dream all along.
Another reason Obamacare will fail is because it does not consider
the cost of defensive medicine significant. President Obama is not interested
in tort reform.
Obamacare doesn’t align any of the stakeholders’ vested interests.
When Obamacare fails it will provoke a citizen backlash that will
be very difficult to overcome.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
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