Thursday, July 22, 2010

Health Reform - Ten Checks and Balances. Obamacare in Perspective

What follows are ten thoughts on checks and balances in health reform.

One, Democrats and Republicans - Democrats won the first round with passage of the health bill. But two thirds of Americans still oppose the bill, and it is a long way between 2010 and 2020. Obama is spending $125 million in a pre-November PR blitz to sell the good parts of the bill. Democrats control the spending and sending of checks for now but come November, if Republicans take back the House, they may begin to cut off health reform checks.

Two. The President vs. Congress - It has become clear the President has very short political coat tails, and endangered Democratic politicians are not rushing in to ask the President to campaign for them.

Three, Centralized vs. Limited Government - A recent Gallup polls indicate most Americans think government is "too liberal," and resistance to excessive government spending and too much federal debt, now $13 trillion, is palpable and growing each passing day.

Four, Specialists vs. Primary Care Physicians - Two thirds of American doctors are specialists. That is the way Americans seem to like it. Despite all the rhetoric about primary care shortages, the health bill did little to correct the situation, and 98% of medical students are voting with their feet by becoming specialists. Universal coverage without universal coverage to primary care doctors may be meaningless.

Five, Proceduralists vs. Cognitive Doctors - Americans prefer doctors who do something concrete to physicians who advice caution, watchful waiting, and conservative therapies. We remain a nation of doers. We prefer action to inaction, and specialists who do what they are trained to do.

Six, Government vs. Market Reforms - The health bill is heavily skewed towards government reform. Market reforms, e.g, health saving accounts, be damned. This is generally presented as government benevolence vs. market greed. In short, it is better to spend other people's money rather than your own.

Seven, Doctors vs, Consumers - This is often characterized as the Health 2.0 or patient-centric care vs. doctor-directed care. The idea is that the Internet will empower consumers to challenge their doctors,become equal partners in the decision making, and separate the the good doctors and hospitals from the bad. Not a bad idea, but patients still trust doctors more than outside sources.

Eight, the Old vs the Young - Politically the Medicare crowd dislikes the bill because it cuts $585 billion from Medicare, and through the individual mandates, the young and haalthy must buy coverage at the same rates as others to support the old and sick.

Nine, Hospitals vs. Doctors - To make the Medicare budget balance, government will have to cut hospital and doctor pay. Since hospitals and doctors often compete for the same piece of pie, this will upset the competitive equilbrium between hospitals and doctors and will force them to collaborate.

Ten, Inpatient vs Outpatients - Two forces are at work here: one centripetal forces driving consolidation of care into large institutions; and two, centrifugal forces, pulling consumers and patients into ambulatory settings and to home care. The two forces can be complimentary, but don't count on it. Hospital administrator and physician egos are strong, and so are incentives to control care and cash flow.

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