The Way Out of the “Unaffordable” Care Act

Dilbert

As the political battle over the Affordable Care Act grows in scope and intensity we should step back and take a fresh look at the issue: what kind of health care do we want, and how do we get there.

The Affordable Care Act – “Obamacare” – is presented as a step towards a uniform health care system, serving all citizens under the same conditions of price and quality. A large number of countries – Japan, Switzerland, Germany, Taiwan, to name a few – have implemented such systems. They appear to work relatively well, the population is generally satisfied, and health care expenses as percentage of GDP are lower than in the U.S.

Critics describe such systems as “socialized medicine”, which is a gross simplification. True “socialized medicine” existed only in the Soviet Union and Maoist China, and is now extinct. Most other countries have hybrid systems, combining private delivery of health care with a uniform administrative and pricing framework, within which the government plays the role of arbiter and/or accountant.

Such systems vary in the details, but the best of them share key characteristics:

1. Universal access – Every citizen (and foreign resident) has access to care.

2. Care availability – Providers – doctors, clinics, hospitals – are so distributed geographically that every potential patient can be served.

3. Uniform pricing structure – Costs, out-of-pocket expenses, reimbursements, etc… are the same over the entire population.

4. Administrative simplicity and cost control – Because the system is uniform, paperwork is generally minimized, improving efficiency of operation. Costs are controlled and arrived at through negotiation.

The key to the smooth operation of such systems, and their popularity, depends on the care taken in designing and implementing the structure. This process involves: first, negotiations between all stakeholders – care givers, equipment and drug providers, patients, associated services, government; then, development of an efficient administrative structure and extensive public education; and full testing of system components before full implementation.

This process usually takes several years and results in:

  • General agreement on system function
  • Cost control
  • Avoidance of unexpected problems and malfunctions
  • Understanding by the public of the system’s benefits, cost and limitations

It is clear by now that the process from which “Obamacare” emerged was quite different. There was little or no consultation, negotiation, careful design, or testing of system components. The structure is convoluted and complex, and may not function at all. Introduction to the public has been dominated by political games and general lack of transparency.

In other words, a potentially good idea has been destroyed in implementation. It is now doubtful the system will survive at all. Its possible failure might provide some breathing space but will not resolve national health care issues.

Our pre-Obama health insurance system has its origin in WWII. At the time U.S. corporations began to offer “free” health care in order to attract workers in a very tight labor market with wage controls. An additional goal was to keep a healthy work force. This practice was continued after the war, with health care benefits often used to hold down wage increases.

The care offered in the 40’s was, by today’s standards, limited to very basic services. As medical knowledge and technology developed it became more complex and expensive. The cost was raised further by increased life expectancy, putting it out of reach of retirees and low income patients. The response was political: Medicare for seniors and Medicaid for the poor.

We thus have a mixed bag of systems, each with its specific problems, summarized below:

  • Cost – Costs have outpaced inflation, straining government and corporate budgets. Businesses are restricting benefits, or canceling them altogether.
  • Portability – States regulate private insurance, and each has different rules. As frequent employment changes replace “one-company” careers, keeping medical benefits becomes a drag on professional growth.
  • Administrative complexity – Care providers must deal with many different cost, reimbursement and eligibility structures, increasing paperwork at the expense of care delivery.
  • Uneven care distribution – Care providers and facilities locate wherever population density and income will support their operation. This leaves economically weaker zones out of the loop, with a distant emergency room the only recourse.

One will note that the above issues offer the antithesis of a functional health care system, as outlined above.

The above does not mean that our system is inherently inferior to those of other nations. It has many strong points, but on the whole it needs major upgrading and fixing. The issues will not be resolved by a laissez faire attitude nor by top-down direction. American health care needs a national health care debate from the grass roots up and a full dose of the initiative and creativity so typical of this country.

It can be done, but it is up to us.


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