Thursday, March 20, 2014

ObamaCare and the Race to the Bottom

The concept of a regulatory "race to the bottom" emerged in the United States during the late 19th and early 20th century, when there was charter competition among states to attract corporations to domicile in their jurisdiction. Some described the concept as the "race to efficiency", and others, such as Justice Louis Brandeis, as the "race to the bottom".

The Concept of Race to the Bottom

John Goodman, PhD, conservative economist,  founder of National Center of Policy Analysis, and father of health savings accounts, has written that  ObamaCare is  a race to the bottom for access to health care.  The race to the bottom is why health plans are narrowing their networks of physicians that consumer can choose and access.  

Health plans know the Obama administration cannot continue to offer more generous benefits without raising the cost of care for health plans paying for and selecting the physicians that provide that care.   This cost is passed onto consumers as higher premiums, higher deductibles,  and  narrower choice of doctors and hospitals.

Health  plans know that the only way to stay in business and to satisfy investors to go to the bottom of the physician health care chain,  to deal with doctors willing to accept low health plan payments.   This may  require cutting out high cost providers, such big systems of excellence, such as academic medical centers and  large integrated systems like Mayo and the Cleveland Clinic.

Needless to say,  patients and their families who want the best of care at institutions known for their excellence  do not embrace  this approach. 

 Americans may  believe the race should go to the swift and the strong. They may believe that people at the bottom rung of society should have access to the best in their field. They may believe America is a bottom-up society, which anybody at any level  should have access to the best care from physicians of their choice.  They may believe that a top-down government bureaucracy that pressures health plans to race to the bottom, should not drive the decision-making process.  They will be disappointed, even angry, when these beliefs are not met.

In the March 5 New York Times, Ekekiel Emanuel, MD, one of the principle architects of ObamaCare, insists the choice is overrated ("Health Care: Choice Is Overated"), and quality and other factors are what count.

Washington is sometimes called the Foggy Bottom because of its fog-bound policy-making.  In the case of ObamaCare,  for good reason.  By promising generous benefits for which it cannot pay, Foggy Bottom  is  driving health plans to provide care at the bottom to provide care of the health care heap.  The race to the bottom is on.

Tweet:  ObamaCare  policies designed to provide more care at less cost are causing  health plans to  drop high cost providers and to favor low-cost providers.

1 comment:

Dylan MacGregor said...

"Health reform fatigue is in the air"---you said it. The right-leaning members of my family and the left-leaning members of my family have discussed health care ad naseum, and at this point, it's a topic we all avoid. I think we won't truly know the ramifications of the legislation---both good and bad---until a few years from now.