What Follows Obamacare

Let’s begin with an admission: the Patient Protection and Affordable Care Act, H.R. 3590, is very complicated and its costs and savings are depended upon future actions that the CBO could not estimate. Since all of the on-budget costs are implemented under the “pay-as-you-go” policy, they cannot affect future deficits should the costs increase. In other words, our taxes could go up, but not our deficits. Nevertheless, the final CBO estimate in March of 2010 concludes that 355 billion of net outlays are more than offset by 473 billion of new revenues over ten years. (My earlier blog, “Subtlety versus Bombast,” debunks the numbers loosely quoted by partisan factions.) However, it should be obvious that the CBO is not a guarantor of the future. By its own admission the “CBO has not completed an estimate of all the discretionary costs that would be associated with H.R. 3590.” In their summary to Congress, it indicates many areas where the numbers could fluctuate up or down. But the CBO is the only impartial accounting organization we seem to have. In the past, the political party that has disagreed with them is the one who voted in the minority for a specific legislation, whether Democrat or Republican. Whatever the predictive number of future costs may be, it is clear that health care costs will continue to rise, though perhaps below the double digit rate experienced before the new law was enacted. Health care cost inflation remains as the underlying problem that will affect everyone, especially State and Federal Government Medicaid expenditures under the new law.

So what should we do next to improve our health care infrastructure? According to the CBO estimate the new law could save nearly a half trillion dollars in non-coverage savings. So Congress’ next step should be to (1) first, assure these non-coverage savings are realized and (2) relook at the structure of our health care delivery system to identify cost effective reforms that Congress might incentivize the health care industry to initiate. There are significant systems’ analyses of various segments of the industry that would benefit from reform. Some improvements, spurred by initiatives in the new law, have already been undertaken. Though I am far from an expert in this field, it is easy to list a number of possible initiatives:
• Make doctors salaried employees who are rewarded for positive outcomes rather than for treatment instances (the decline in private practices is already underway as hospitals and various medical associations fill the industry landscape);
• Remove the “charge master” bureaucracy used by hospitals to peg billing many times more than actual costs (as determined and used by Medicare in its billing). This practice was instituted to cover no-charge emergency services in compliance with the law signed by Reagan in the 80s. The unforeseen consequence of this law is the unseemly overcharging of the non-insured and unfair leveraging of negotiated billing settlements with insurance companies;
• Provide financial incentives for the digitizing of health records and for secure and shared access to these records by patients and authorized medical professionals both within and between regional and/or state specified jurisdictions;
• Enable collaborative treatment programs across disciplines, probably along the lines already pioneered by organizations like the Mayo Clinic and the Cleveland Clinic;
• Provide financial incentives for the education and development of primary care physicians;
• Identify best standards of treatment as determined by scientific and statistical evidence of effectiveness;
• Require hospitals to report to HHS on their effectiveness in reducing admission recidivism and in eliminating hospital incurred illnesses;
• Reevaluate depreciation incentives for the purchase of hospital equipment to eliminate purchases based strictly on financial grounds rather than on sound treatment options;
• Make preventive care even more ubiquitous, including not only health care providers but prospective care recipients.

Though these are initiatives enumerated by a layman, they at least illustrate that there is a way forward. More encouraging is the fact that I lifted them from health care professionals. Congress should listen to them for they are in the best position to not only reduce costs, but improve health care for our citizens. The Affordable Care Act has changed the foundation of health care in America: it is no longer mainly a business, but a service to its consumers. Insurance companies now have service targets as well as financial goals. If we continue on this path, providing health care will become a service in which we all participate and take responsibility. What follows “Obamacare” has to be a better health care system, not just a more available a/o affordable one.

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