Saturday, July 25, 2015

What Will the ObamaCare Legacy Be?

When President Obama steps down in 2016, what will be the legacy of his signature domestic program? What will ObamaCare leave in its wake? What will be its lasting effects?

One, will it be consolidation of insurers and hospitals into giant entities
? Larry Robbins, who runs Glenview Capital Management LLC, a hedge fund, thinks so. In 2010, after ObamaCare passed, he and his partners bet the health care system was going to change, with more people gaining coverage, and insurers and hospital merging and gaining power to help government manage the new system. It was apparent government could not manage the system alone. Robbins and his partners began to invest in big insurers and big hospital systems and clung to their thesis that they system was going to change big time through two presidential campaigns, congressional shoot-outs, two midterm defeats for Democrats, and two Supreme Court cliffhangers.
Their bet has paid off handsomely. Only three giant insurers remain – United, Anthem-Cigna, and Aetna-Humana. Hospitals are merging into giant chains. Glenview now owns shares in seven huge health insurers and hospital operators with these values of holdings and year-to-date changes in stock price in 2015: Humana $926.7 million +28.6%, Tenet Heathcare, $863.6 +15.2%, Anthem $759.5 million +23.5%, Community Health Systems , $712.3 million +9.2% HCA Holdings, +27.2%, Aetna $395.2 million, +26.1%, and Cigna $274.6 +50.0%.

Legacy lessons? As big government grows bigger, it’s easier for government to manage and control the system through bigger players delivering the health care goods, namely big insurers and big hospitals. Consolidation, in other words, is the ObamaCare legacy endgame.

Two, will the legacy be growth in government coverage and decline in employer coverage? Will coverage of employees under ObamaCare, with its mandates that all workers be covered, all plans have comprehensive “essential” benefits, or suffer onerous penalties, and force employers to drop or shift risks by offering only high deductible health plans? This is not only possible but probable. Since 2005, the percentage change in annual enrollment by coverage type has been;

• Medicaid, + 52.2%, 69.7 million people

• Medicare, + 31.1%, 54.1 million people

• Individual, including Medicare supplemental and health exchange plans, +25.4%, 25.2 million.

• Employer sponsored plans, -3.5%, 172 million

In other words, government sponsored and mandated plans dominate U.S. health care and are the fastest growing health market segment.

Three, will big government break the back of the medical profession by consolidating it and by deemphasizing autonomy and minimizing personal individual patient attention and cutting fee-for-service reimbursement by transforming to a system based on “value,” i.e, managerial and computer-judged population outcomes geared to lower prices as managed by teams using big data and online algorithms paying for by bundled services across the continuum of care?

Four , will the legacy be further fragmentation of the system with government controlled clinics, retail clinics, hospital-owned urgent care centers and other decentralized outpatient facilities, and private physicians in consumer-focused outpatient diagnostic and treatment centers, offering convenience and greater consumer satisfaction and fighting for market share in a two-tier health system, designed for those who can pay or not pay?

Five, or is it possible that ObamaCare will falter and break up in the shoals and on the shores of economic and reality
because of broken ObamaCare promises, out-0f-control costs, loss of patient choice and freedom, public distrust, and political defeats at the presidential and congressional ballot boxes?

Only one thing is certain. The Republicans cannot beat something, ObamaCare, with nothing, complaints and criticism of ObamaCare, without a unified alternative that covers more people at less cost with more choice.

Six, will it be all of the above, implemented in one way or another?
Probably, and maybe that’s the way it ought to be in a multicultural democracy that desires individual choice, quality options, and personal freedom with privacy.

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