Unscrambling Obamacare and Hospital Consolidations: An Eggsplanation
Monday, January 20, 2014
Unscrambling Obamacare and Hospital Consolidations: An Eggsplanation
The administration and its supporters in Congress will do
all they can to mask the faults of this monstrosity and enable its survival,
and they will further assert that bare survival is the new definition of
success. Republicans should respond with measures that help voters see that
Obamacare is neither inescapable nor irreversible—by saying no to the
mandates, the bailouts, and the forced coverage cancellations that Obamacare
requires to stay alive.
James Capretta and Yuval Levin, “Unwinding ObamaCare,”Weekly Standard, January 17, 2014
Unwinding deals is exceeding
difficult in practice: in antitrust vernacular, these efforts are labeled “unscrambling
the eggs.”
Leemore Dafny, “Hospital Industry
Consolidates- Still More to Come?” New England
Journal of Medicine, January 16, 2014
Egg metaphors
abound which apply to health reform:
·
Don’t
put all your eggs in one basket, e.g., ObamaCare.
·
You
can’t make an omelet with breaking eggs,
e.g, without disrupting the current structure and harming health care
stakeholders and health consumers.
·
Don’t
kill the goose that laid the golden egg, e.g., the health care markets which
forms 1/6 of the U.S. economy.
·
He
that would have eggs must endure the cackling of hens, e.g. , ideological politicians and their loyal constituents.
·
Once
you’ve scrambled eggs, you can’t put the eggs back together in their original
condition, e.g. as stand-alone entities with individual shells of their own.
·
Talking
about health reform is like walking on eggs, e.g., people with a vested or
special interests have fragile shells that resist change.
Which brings
me to the point of this blog: it’s going
to be very difficult to unscramble or unwind
ObamaCare. It’s the law. It was hatched nearly
four years ago. Many of its provisions and consequences are already in motion – health exchanges,
cancelling of noncompliant health
plans, accountable care organizations, shifts to part-time work to avoid
penalties, and physician and hospital
consolidations to protect the
self-interests.
The Obama
administration is doing some unscrambling of its own – by delaying the
employment mandate and enrollment dates
and changing at least 20 other provisions of the law. There is even talk of putting off the
individual mandate – the very guts of the law – for a year.
The administration
is trying to consolidate and clarify and make its political position more palatable
and to save red-state Democrats before
the November midterm elections.
Meanwhile
Republicans are rolling out ads attacking the disastrous healthcare.gov
rollout, government incompetence in
overseeing the rollout, ObamaCare’s harm
to the economy and employment, skyrocketing premiums and deductibles, and cancellations of health plans by health
plans and employers. In addition, they
are coalescing around a more conservative national health plan as an
alternative to ObamaCare.
Hospitals are reacting to the ObamaCare omelet by
consolidating. Hospitals are scrambling to fortify thier market positions, improve operational efficiency, create new physician relationships, and to manage and improve population health by offering better "value" and outcomes. . The merger activity is impressive: 105 deals were
reported in 2012, up from 50 to 60 annually in the pre-ACA, pre-recession days
of 2005-2007. Physicians in independent practice
are unscrambling and breaking up their
practices by becoming hospital employees in record numbers.
These two phenomena
– hospital consolidation and physician employment - has
produced regional hospital monopolies, and
price increases, not only hospital prices in general but particularly prices of services of hospital employed
physicians compared to physicians in private practice.
Government
anti-trust forces are aghast at these burgeoning monopolies with the attendant
price spikes and are examining Accountable Care Organizations to see if the violate anti-trust rules. There is an irony to these antitrust concerns
over ACOs. ACOs are organizational creatures
created by the health law.
Physicians
who felt left out of the ObamaCare and hospital omelets are taking risks walking on financial egg shells by forming concierge practices, dropping 3rd parties, including new Medicaid and Medicare patients, to exert their independence, circumvent government
bureaucratic rules, protect their clinical
autonomy, secure their incomes, decrease their overhead, and offer greater
service to their patients.
Tweet: Efforts are underway to
unwind the health law and to protect against its effects through
hospital-physician consolidation and by forming concierge practices.
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