Robert A. Levine 4-2-12
If the Affordable Care Act (ACA) is overturned by the Supreme Court, which now seems probable,
how can health care costs be controlled and care provided to the one sixth of Americans who have no insurance? A bipartisan solution to the problem appears to be impossible. Evidence for this is reinforced by the fact that the individual mandate provision of the ACA, which originally had been a conservative Republican concept, became an anathema to Republicans once it had been adopted by Obama and the Democrats, and a focus of their opposition to the law.
Addressing the significant problems of overall health care costs, the one sixth of Americans who have no coverage, and increased spending by the government for Medicare and Medicaid, appears to be beyond the gridlocked, highly-partisan legislative bodies in Washington. And unless solutions to these problems are found, budget deficits and the national debt will continue to grow and the American economy will suffer. If after the November election one party controls the presidency and both Houses of Congress, with a filibuster proof majority in the Senate, there would at least be the possibility that a health care plan could be enacted. However, a more likely scenario is a continued division of the seats of power between the two parties and continued disagreement over what should be done. And cutting Medicare and Medicaid spending as the Republicans propose, or raising a few premiums, is not the answer.
The general animus between the parties and over health care in particular, masks the fact that the steps to constraining health care costs are straightforward and fairly obvious. However, it would entail abandoning the rigid insistence by conservatives on market-based solutions for all economic problems.
The market simply does not work in regard to health care, encouraging predatory behavior among
the stakeholders in the system. When physicians are paid by fee-for-service, their income is determined by how many tests and procedures they perform and the intensity of the services they provide. And since there is an asymmetry of knowledge between laymen and physicians, patients usually accept whatever physicians recommend. This has led to a huge volume of unnecessary care; up to 30% of health care spending- $900 billion out of $2.7 trillion last year, with some adverse events as well. (Some unnecessary care is also generated by defensive medicine to ward off malpractice suits.)
Another 15-25% of health care spending is consumed by administration and overhead because of the complexity and inefficiencies of the insurance based system. Unable to reduce health care costs, insurance companies merely pass onto consumers in premiums whatever they pay out to providers. These companies also don’t cover those with pre-existing conditions and withhold payment for services whenever possible, to increase profits that will enhance executive salaries and shareholder dividends.
To curb unnecessary care, and save a good portion of the $900 billion dollars annually wasted there, fee-for-service payment for physicians should be eliminated. Capitation, bundling of payments for services, or having physicians on salary are all preferable options. Over 30% of physicians are already salaried and this would be the simplest and most efficient method of curtailing unnecessary care and its attendant costs.
A single payer system to reduce administration and overhead would also save hundreds of billions of dollars. This could be established through a Medicare for all system under the aegis of the government, or under a quasi-governmental agency similar to the Federal Reserve and free of political interference. Unfortunately, the chances of having this sensible path followed in the current political environment are slim to none.
Malpractice reform, expensive new technology that provides few benefits, and drug costs, must also be addressed to maximize savings for the health care system.
America’s per capita spending on health care is 50% higher than other developed countries. In terms of metrics like life expectancy and infant mortality, the medical outcomes are worse, and one sixth of Americans have no health care coverage. The nation can do much better in terms of cost and quality. The problems of soaring health care costs and lack of coverage have been ongoing problems for decades and need to be solved once and for all. Labeling necessary reform measures as “socialistic” and trying to placate the stakeholders in the current system will not help the nation find solutions. Pragmatism needs to win out over partisanship for America to win the battle over health care costs.
Resurrecting Democracy
www.robertlevinebooks.com
If the Affordable Care Act (ACA) is overturned by the Supreme Court, which now seems probable,
Addressing the significant problems of overall health care costs, the one sixth of Americans who have no coverage, and increased spending by the government for Medicare and Medicaid, appears to be beyond the gridlocked, highly-partisan legislative bodies in Washington. And unless solutions to these problems are found, budget deficits and the national debt will continue to grow and the American economy will suffer. If after the November election one party controls the presidency and both Houses of Congress, with a filibuster proof majority in the Senate, there would at least be the possibility that a health care plan could be enacted. However, a more likely scenario is a continued division of the seats of power between the two parties and continued disagreement over what should be done. And cutting Medicare and Medicaid spending as the Republicans propose, or raising a few premiums, is not the answer.
The general animus between the parties and over health care in particular, masks the fact that the steps to constraining health care costs are straightforward and fairly obvious. However, it would entail abandoning the rigid insistence by conservatives on market-based solutions for all economic problems.
The market simply does not work in regard to health care, encouraging predatory behavior among
Another 15-25% of health care spending is consumed by administration and overhead because of the complexity and inefficiencies of the insurance based system. Unable to reduce health care costs, insurance companies merely pass onto consumers in premiums whatever they pay out to providers. These companies also don’t cover those with pre-existing conditions and withhold payment for services whenever possible, to increase profits that will enhance executive salaries and shareholder dividends.
To curb unnecessary care, and save a good portion of the $900 billion dollars annually wasted there, fee-for-service payment for physicians should be eliminated. Capitation, bundling of payments for services, or having physicians on salary are all preferable options. Over 30% of physicians are already salaried and this would be the simplest and most efficient method of curtailing unnecessary care and its attendant costs.
A single payer system to reduce administration and overhead would also save hundreds of billions of dollars. This could be established through a Medicare for all system under the aegis of the government, or under a quasi-governmental agency similar to the Federal Reserve and free of political interference. Unfortunately, the chances of having this sensible path followed in the current political environment are slim to none.
Malpractice reform, expensive new technology that provides few benefits, and drug costs, must also be addressed to maximize savings for the health care system.
America’s per capita spending on health care is 50% higher than other developed countries. In terms of metrics like life expectancy and infant mortality, the medical outcomes are worse, and one sixth of Americans have no health care coverage. The nation can do much better in terms of cost and quality. The problems of soaring health care costs and lack of coverage have been ongoing problems for decades and need to be solved once and for all. Labeling necessary reform measures as “socialistic” and trying to placate the stakeholders in the current system will not help the nation find solutions. Pragmatism needs to win out over partisanship for America to win the battle over health care costs.
Resurrecting Democracy
www.robertlevinebooks.com
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