"Scalability" : The Undoing of Obamacare

 

Unappreciated in this chaotic political environment is that the ACA is the first U.S. law to attempt comprehensive reform touching nearly every aspect of our health system. The law addresses far more than coverage, including health system quality and efficiency, prevention and wellness, the health care workforce, fraud and abuse, long-term care, biopharmaceuticals, elder abuse and neglect, the Indian Health Service and other matters

John E. McDonough, Dr. P.H., “The Road Ahead for the Affordable Care Act, “ New England Journal of Medicine, July 19, 2012

July 19, 2012 -  The problem with Obamacare is not the sweep of its good intentions but the scale of its ambition – to reform America’s health system  and solve its dilemmas and injustices  in one fell 10-year swoop.  In the computer world, this ambition would be called  “scalability,"  the ability to expand a system to meet all future needs.

Lack of scalability promises to be the undoing of Obamacare.   Call it what you will – biting off more than one can chew, lacking resources and public approval to do the job, difficulties in persuading people to  change embedded  societal and medical cultural expectations,  spurring demand while diminishing supply, delusion,  illusion,  overkill,    ideological arrogance.   

One cannot turn upside down  a health care system that has been evolving for 70 years in a bottom-up society that believes in free enterprise, individualism, and choice and distrusts centralized paternalistic government.

One can correct certain deficiencies of the system.  Doctor McDonough, one of the principle architects of Obamacare,  describes what has been done to date with these words.

Those benefiting include more than 6 million young adults enrolled in their patents’ health plans, 5.2 million Medicare enrollees who have saved on prescription-drug costs because of shrinking Part D “doughnut hole,” 600,000 new adults Medicaid eligibility,  12.8 million consumers who will receive more than $ 1 billion in insurance-premium rebates, and many others

By my math,  this adds up to roughly 25  million Americans benefiting from the law.  But what about the 290 million Americans who have not so far benefited?   To be sure,  30 million or more uninsured or under-insured are slated to qualify for government benefits in 2014.  By 2020,  some 110 million Americans are expected to be on Medicare and Medicaid. The question is:   Is covering  1/3 of the population, worth spending $1.8 trillion (Congressional Business Office estimate) on Obamacare?  Can the nation and the rest of us afford this outpouring of federal largess?

According to John Goodman in his July 18 Health Alert  blog, the coverage of young adults under their parents, free checkups for seniors, and coverage for pre-existing illnesses makes for good press, but are “trivial” and “miniscule”  in the  fiscal scheme of things, accounting for  less than 5% of ACA costs.  

Why, Goodman asks, does  not the press, instead of passively parroting White House press releases,   report  that the ACA plans to cut physicians and hospital funding below that of Medicaid. Medicaid fees are not enough to meet practice or hospital expenses.   These cuts will set the stage for widespread physician withdrawal from seeing Medicare and Medicaid patients and hospital bankruptcies.  As a result, says Goodman, seniors and the poor will surely have to join endless lines at community health clinics and safety net hospitals to receive care. The welfare state will have arrived in spades.

Given the current $15 trillion federal deficit and the largely unfunded Medicare-Medicaid programs,  a history of government cost overruns for entitlement benefits,  adding a new entitlement  may not  be possible to achieve.  

If Democrats hold the White House, regain control of the House, and retain the Senate,  the ACA will be implemented as planned.  If Republicans capture the Presidency and the Senate and  retain House control,the ACA will face major deconstruction early in 2013.

These are the health care stakes in November.

Tweet:  The “scalability” needed for comprehensive health reform under Obamcare  will be hard to achieve given the magnitude of the federal deficit.