ObamaCare – Destructive and Disruptive, But Not Creative and Innovative

A term coined by Joseph Schumpeter in his work “Capitalism, Socialism, and Democracy (1942) to note “ a process of industrial mutation that incessantly changes the economic structure from within, necessarily destroying the old one, incessantly creating a new one in the process of  necessarily destroying the old one…the process of creative destruction is the essential fact of capitalism.

Definition of Creative Destruction

Disruptive innovation, a term coined by professor Clayton Christensen of Harvard Business School, is described as a process or service that takes root in simple applications at  the bottom of the market and then relentlessly moves up market, eventually displacing established competitors. Disruptive technologies are typially  cheaper, simpler, smaller, and more convenient to use.

Definition of Disruptive Innovation

At its heart, The Accountable Care Act (ACA) is  a top-down government-led attempt to transform health care by broadening access and cutting costs.   It tries to do so by striving  to  consolidate  health care industry participants  into larger “cost saving” entities, ending fragmentation and variation among providers,  standardizing and homogenizing  care across the country,  and managing the health care process from beginning to end.

ACA  represents a drift towards socialism and government control of health .   

The ACA  is having a hard time in capitalistic America.  Capitalism inevitably outperforms socialism in providing goods and services , but  capitalism, through its economic successes generate envy and inequality and begets socialism, which promises to level the social playing fields.   

Why such a hard time?  For these reasons.

·         The public disapproves of the law.

·         The ACA  is costing far more than anticipated.

·         It is not delivering on its promises – lowering costs, expanding access to all, and allow you to keep your doctor, health plan, and hospital.  

·         It is disruptive ( As of now,  insurers have cancelled plans for 4.2 million Americans, with millions more to come).

·         It  dramatically raises premiums and deductibles for many in the middle class and for small business owners.

·         It is destructive for physicians’ private practices,  who can no longer make it economically because of the expenses of complying with regulations and  ever lower Medicare and Medicaid reimbursements. 

·         With the fumbling, stumbling healthcare.gov website and millions of cancelled policies ,  the ACA demonstrates  that centralized  command and control government  cannot administer or manage health care transactions and decision-making at the level of the market. 

·         And,  with programs like  the 2.3% tax on profits of the medical device industry, the ACA shows a proclivity, even an antipathy,  towards  innovators and entrepreneurs.

The irony is that entrepreneurs are much more effective at bringing about radical change than government.   Spurts of innovative activity often bring down costly established enterprises. Entrepreneurs drive and generate economies,  not government. Entrepreneurs  introduce bone jarring technology shifts that destroy or gravely threaten  enterprises – like free standing hospitals and physician practices,   private colleges,  newspapers and  book publishers,  brick and mortar retail outlets.

Yet entrepreneurially-driven  electronic technologies may be the salvation of the health care system.   Mobile devices and cellphones will connect patients  more closely with doctors.  These devices  will allow patients to educate themselves about their health and their disease.  The devices will bring care to rural America and to travelling Americas,  home and abroad,  According to Eric Topol, MD,  cardiologist,  geneticist, digital aficionado, editor-in-chief of Medscape, and author of The Creative Destruction of Medicine,    devices in the hands of patients and doctors, will revolutionize health care,  making it more convenient, more effective,  simpler to access,  cheaper, and better.

Tweet:   At his juncture, Obamacare is more destructive and disruptive than creative and innovative, capable of solving health care problems.