Cliff Notes on Obamacare Future- Government Controls versus Clinical Freedoms

December 6, 2012

It (Obamacare) will likely be a nightmare of missed deadlines, public confusion, inconsistent exceptions, and dashed expectations.  Every claim made for the bill will be shown to be false: health costs will go up, not down; government spending and debt will go up, not down; the economy will be injured, not benefited; people in the millions will in fact lose their health insurance they have and like.

These failures, abetted by the natural tendencies of Americans to swing the pendulum ever so often, set the stage for a powerful restoration of architecture of liberty. Freedom’s friends must be ready, not just  with cerebral prescriptions for better policy, but with a moral argument that affirms the God-given dignity of each of us, that says, “Yes, we can” to everyone.

Indiana Governor Mitch Daniels, speaking to a conference of the William S. Buckley, Jr, program at Yale, November 3, 2012

Perhaps the most difficult long-term challenge facing Obamacare is cost-control.  The ACA does contain substantial savings in Medicare, but limits on other spending are less robust. In fact, the ACA is not so much a program as a series of programs, regulations, subsidies, and mandates that fill gaps in the current patchwork insurance system.  It treats different groups of Americans in different ways at different times, which complicates efforts to explain the law, enroll eligible populations into benefits, and mobilize public support.

Jonathan Oberlander, PhD, University of North Carolina Health Analyst,  “The Future of Obamacare,” New England Journal of Medicine, December 6, 2012

December 6, 2012 –  The die is cast. The health law  is baked in.  Democrats control the Presidency and the Senate.  The health law’s implementation begins in earnest on January 1, 2013.  Then many physicians may take a SGR 27% cut, with an 2% sequestration reduction, and a roughly 50% overall tax hikes. when one includes all taxes and incomes exceed $250,000. 

Cliff Hanging

If we fall off the fiscal cliff, another recession is imminent.  Economic stagnation will continue.  Businesses will cut back on hiring and expansion and reduce full-time employees to part-time work. Unemployment will rise. Public discontent will fester.  Physician shortages will intensify.  The majority of states, 21 so far, will decline to set up health exchanges.  And as 78 million baby boomers and 30 million, perhaps even 40 million, hit the entitlement rolls, government beneficiaries unable to  find a doctor to deliver promised “free care” will revolt.

Crisis at Hand

A political crisis will  be at hand.  The question will be, as a pointed out in the title of my 1988 book, And Who Shall Care for the Sick? lack of access to physicians. People will ask.  If one cannot find a physician to help you, what good is universal coverage?

The crisis will center on centralized government controls versus decentralized clinic freedoms and affordability of care.    It will be about how we can give patients enough information to responsibly choose their own doctors and  receive the proper treatment that fits their needs.  It will be about how to pay and incentivize physicians so they can  do what is best for patients and still stay in practice.

Approaches to “The Fix”

Governor Mitch Daniels of Indiana has one solution – universal health savings accounts in high deductible plans so consumer have “skin in the game” and incentives to save money while putting aside money for retirement.  

George Halvorson, chairman and CEO of Kaiser Permanente has another approach– change the culture by having large organizations own health plans, hospitals, and pay salaried doctors to work with other health care professionals to save money, coordinate care, improve quality, and improve quality and outcomes.

And there is, of course,  universal mandated government coverage,  or a series of incremental government steps, such as those inherent in Obamacare, to lead ultimately to that coverage.

Free market aficionados advocate a combination of tort reform, shopping across state lines,  state and federal vouchers for entitlement populations,  moving age of Medicare entry to 67, reducing obligated alternatives in state programs,  expansion of federal health benefit programs based on competition between plans, and tax credits for all.

At Issue and at Risk

At issue is government mandates or the freedom of patients and doctors to exercise their best mutual judgments on what care to receive or implementing government controls to dictate what needs to be done to reduce and rationalize runaway entitlement spending as proposed by Obamacare advocates.

Although  seldom mentioned,  at risk is a collapse of the fragmented and increasingly fragile state of private practice due to lack of sufficient scale and access to administrative, technologic  and capital resources to deal with governmental mandates, regulations, rules, penalties, and obscure bureaucratic details, as yet undefined and evolving.

Clerks and Serfs

To serve as clerks and serfs of government and to face the prospects of a 40% reduction in reimbursements to achieve “savings” on hospital and physician costs  over the next 10 years, as envisioned and projected by Obamacare as Medicare  is not an attractive option for physicians  and will render entering  medicine as a less attractive profession to enter.

Midterm Elections and Political Pendulum

Ahead lies the 2014 midterm elections.  These elections could be a repeat of the 2010 midterms, particularly  if Obamacare continyes to fail to deliver govenment goods as promised. 

For whom does the political pendulum toll ? 

For American consumers and physicians?

For government bureaucrats and the denizens of the safety net?

Which set of constituencies  is a problem.

There is another problem as well. 

In the United States, government elites that put class envy and that elusive thing called  social justice ahead of economic prosperity and free enterprise will  not likely to remain in power for long, as evidenced by the Socialist takeover of Britain after World War II and their subsequent defeat.

Winston Churchill eloquently summed up the problem, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

Tweet:  Obamacare sits on the financial cliff’s edge because of costs, uncertainties, and adverse effects on patients, doctors, and the economy.