There is a reason why the last major healthcare reform initiative, Medicare, was adopted 50 years ago: Revolutionizing healthcare is difficult in a country as large and diverse as the United States.
As the blush cools on the Republican triumphs in the fall's mid-term election, a huge healthcare storm is gathering over the Grand Old Party. With power comes responsibility, and who in their right mind would want responsibility for the fate of the U.S. healthcare industry?
No matter who is pulling the levers of power in Washington for the foreseeable future, the healthcare industry is going to be a tumultuous and expensive sector of the U.S. economy. The transformations envisioned under Obamacare such as expanded access to care through the new public insurance exchanges are propelling into full swing, fueling hope and trepidation among healthcare stakeholders.
My wife loves a folksy conundrum: "better the devil you know than the devil you don't know,"
Obamacare is the devil we know: a patchwork and ironically market-based approach to boosting access to healthcare while maintaining quality and constraining costs.
A Republican repeal-and-replace deal for the Patient Protection and Affordable Care Act is the devil we don't know: Scuttling Obamacare midstream would be disruptive, and the Republican cure for PPACA ills could be far worse than actual PPACA diseases,
It was easy for Republicans to snipe at Obamacare over the past five years: They did not have any ownership over the pressing need to reform the healthcare industry, which is spending about $1 out of every $5 generated in the U.S. economy. In an ominous political portent, one of the first GOP alternatives to the PPACA proposed in Congress this yearnhas gained no momentum, despite the sponsorship of three veteran Republican senators: Tom Coburn of Oklahoma, Orrin Hatch of Utah and Richard Burr of North Carolina.
Put yourself in the shoes of the 2016 GOP presidential candidates as the early contests in Iowa and New Hampshire loom large a year away. Would you want any of this healthcare action:
- Obamacare has garnered health insurance coverage for about 20 million Americans, but at least another 20 million citizens remain uninsured or underinsured.
- The U.S. healthcare industry has the best technology and pharmacology in the world, but there are vast disparities in the distribution of these assets and medications, particularly in rural and economically disadvantaged communities.
- Marrying provider service and payment models: The "fee-for-service" payment model is widely viewed as a source of quality-blind cost pressure in healthcare. Traditional Medicare is based on a fee-for-service payment model -- beneficiaries get sick, they go to their doctors for healthcare services, then Medicare pays for those services. Under traditional Medicare, doctors have no monetary incentive to help keep their patients healthy. They have the opposite incentive: the sicker their patients get, the more services they can bill and the more money they can make. The key to healthcare reform is marrying value-based redesign of provider services with value-based payment models, such as physicians providing more preventive care for seniors and Medicare finding new ways to pay for preventive care. Marrying provider service and payment models that are geared to generate health value rather patient volume requires change on a grand scale. The healthcare industry's mindset needs to focus on health, not healthcare services. By the way No. 1: The marriage of value-based healthcare service models with value-based payment models cuts to the heart of every healthcare industry organization's business model, and wedding-day jitters are rattling boardrooms across the country. By the way No. 2: Healthcare providers and payers have had bitterly adversarial relationships for decades.
- Detroit native Otis Brawley, MD, of the American Cancer Society is a top healthcare disparity researcher. He believes every human being has a fundamental right to basic healthcare services. Millions of American -- mostly in rural and socio-economically disadvantaged communities -- do not have access to basic healthcare.
- The status of American health poses an elephantine challenge. More than one-third of Americans are obese, according to the Centers for Disease Control and Prevention. Obesity is directly linked to three of the deadliest diseases in the United States: diabetes, heart disease and cancer. Without changes in the American diet and level of physical activity, no amount of reform contortion in the healthcare industry will improve care at a sustainable cost.
- In the real world of healthcare reform, acceptable performance would not be considered tolerable in nearly any other industry. The open enrollment period that just concluded on the Obamacare exchanges is a case in point. The federal exchange website, HealthCare.gov, crashed less often than the glitch-plagued first open enrollment a year ago, but an income verification feature failure on Valentine's Day prevented about 500,000 people from enrolling; the HealthCare.gov call center was overwhelmed with would-be beneficiaries over the entire Valentine's Day weekend; and the income verification glitch and long call center wait times prompted federal officials to extend the open enrollment period for one week. The open enrollment extension is a blow to health insurance carriers, which are struggling to make the "back end" of the exchanges work, including cumbersome enrollment verification and data sharing processes. Despite these fumbles, health plan enrollment has nearly doubled on the exchanges to more than 11.4 million people. This is what success looks like in the realm of healthcare reform, but it's not the kind of clear-cut success on which political empires are built.
Looking ahead, many Republicans are rubbing their hands together gleefully at the prospect of a Supreme Court blow to the Obamacare exchanges. But a nervous few in the GOP ranks are sitting on their hands hoping they will not have to clean up a healthcare train wreck.
Next month, the high court is set to hear oral arguments in King v. Burwell, which could strip federal healthcare coverage subsidies from Obamacare insurance exchanges in 37 states. This year, those federally operated exchanges are on track to help provide about 8 million Americans healthcare coverage. The vast majority of the people who purchase health insurance on the exchanges receive subsidies, which are a key affordability leg in the Patient Protection and Affordable Care Act.
If the Supreme Court rules against the Obama administration in King v. Burwell, how will Republican lawmakers fix the damage associated with millions of Americans no longer being able to afford their health insurance? How much will it cost to fix the damage?
The first blood-letting in Republican efforts to unravel Obamacare passed relatively quietly this winter: the bankruptcy of the Iowa-based PPACA insurance cooperative, CoOportunity. The GOP put a fatal financial squeeze on CoOportunity in December. U.S. taxpayers are now on the hook for as much as $145 million in federal loans to the failed insurance cooperative, and 96,000 people in Iowa and Nebraska have been forced to purchase new health coverage from other carriers.
In the 2016 election cycle, playing politics with healthcare is not going to be fun for anyone.
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