Who Killed Health Reform?

A system controlled by the insurance companies or hospitals or government will kill us financially and medically – it will ruin our economy, deny us the health services we need, and undermine the important genomic research  that can fundamentally improve the practice of medicine and control its costs.

Regina Herzlinger, PhD, Professor,  Harvard Business School, Who Killed Health Care? McGraw Hill, 2007

In her pre-Obamacare book, professor Regina Herzlinger  of Harvard Business School,  argued that these prominent groups  were cripplingUS health care:

·         Killer Number 1: the Health Insurers,  Death at the Hands of a Dysfunctional Culture

·         Killer Number 2: The General Hospitals, Death at the Hands of Empire Builders

·         Killer Number 3:  The Employers, Death at the Hands of a “Choice” of One

·         Killer Number 4, The U.S. Congress, Death at the Hands of Those Chosen to Represent Us

·         Killer Number 5,   The Academics,  Death at the Hands of Elite Policy Makers
 

Herzlinger’s solution

·         Create a consumer-driven system, focusing on responsible, informed consumers

·         Require everyone to buy insurance, using tax-sheltered income.

·         Have government subsidize those who cannot afford to buy insurance.

·         Let physicians bundle care as they wish and to quote their own prices.

·         Require publication of data on performance of all hospitals and physicians.

·         Adjust prices for risk.

·         Let information flow.

·         Let  competition flow across state lines.

·         Let medical business entrepreneurialism bloom.
 

It’s more complicated than that and will require government oversight.   But that’s the essence of it.

Two New Killers – Job Creation and Physician Creation

In the post-Obamacare era, two new killers have emerged on the health care horizon.

These are:

·         Obama’s health law is a job killer.   Most observers, except for Obama and his advisors, e.g. Jonathon Gruber, “Will the Health –Care Law Help Small Businesses, YES: Firms Will Have Affordable Options, “ WSJ, August 19, 2013), agrees. The  pervasive uncertainties and onerous regulations inherent in Obamacare will hurt business Growth (Will the Health-are Law Help Small Business,”NO: Harder for Small Firms to Grow,} WSJ, August 19, 2013).    

Thomas Stemberg, founder and former CEO of Staples, in another WSJ article (“A New Law to Liberate American Business,” August 22, WSJ) says, “ The current regulatory regime just kills more jobs and stifles the formation of new small businesses – the life blood of job creation in our economy… if the president and Congress are serious about creating jobs, they must take seriously the job-killing regulations that are holding job creation back.” A May 2013 Heritage Foundation report, “Red Tape Rising,” found that new regulatory costs added in 2012 totaled $23.5 billion.  Obamacare alone has generated nearly 20,000 pages of new regulations.

·         Obama’s health law is a physician supply killer.  America is in the midst of physician shortage – a demand-supply crisis – just as 30 million new Medicaid and previously uninsured enter the market in 2014  and 78 million baby boomers are becoming  eligible for Medicare over the next decade.  Yet,  at the moment, the US is  short 50,000 primary care physicians, a number that will grow to over 100,000 after 2020.  

      Obamacare does little to address this shortage – to correct the SGR (Sustainable Growth Rate) formula, which this year threatens to cut physicians Medicare reimbursement by over 20%; to institute malpractice reform, which is costing the nation as much as $100 million because of the practice  defensive medicine  to avoid frivolous law suits;  to expand the number of primary care residency programs, which are needed to  train  the physicians required  to serve millions of anticipated new patients;  to increase physician reimbursements for Medicaid patients, which are now 58% of private pay, and Medicare, 80% of private pay.  

Tweet:  Obamacare has suppressed hiring of full-time workers and has failed to offer incentives or solutions to relieve the physician shortage.