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If Only Obamacare Empowered Patients – Part 2

What Obamacare 2.0
Might Mean for REAL Health Reform 


Part 1 of this post explored three things Obamacare fails to do that would empower patients to be smarter consumers of expensive and often dangerous medical services. Part 2 explores how these and related measures would help us get a better handle on healthcare spending that virtually everyone agrees is “unsustainable”.

It would require going beyond the “low-hanging fruit” of Medicare fraud and abuse to the obvious but obstinate cost-drivers in order to not just “bend the curve” in medical spending increases, but to actually have a shot at keeping medical spending growth at or below the rest of the economy on a sustained basis.

This radical notion – if refusing to pay for things we don’t need that also endanger our lives can be considered radical – would indeed slow the medical component of our economy. But replacing unproductive medical spending with more productive spending elsewhere in the economy is essential to getting it back on sound footing.

And that’s what individuals and companies could do with their savings from a more aggressive approach to cutting medical spending. Because our exorbitant healthcare spending is a net drain on America’s economy, hampering the global competitiveness of American companies and suppressing the wages of American employees – wages that have been stagnant for the past decade.

Here Are Some REAL Reforms

What are some of the radical ideas that would help accomplish this perfectly sound – and not the least bit radical – goal? Here’s a brief listing of items previously discussed here and in Our Healthcare Sucks with the most potential for reducing our medical spending:

  • “Soft fraud” – Banning completely physician self-referrals to facilities and services in which they have a financial interest;

  • Excess hospital payments – Reducing payments to hospitals to national averages (with appropriate adjustments) and prohibiting the ridiculous 1,000+% mark-ups of our most egregious hospitals;

  • Specialist compensation – Reducing payments to sub-specialties with the greatest rates of over-treatment;

  • Defensive medicine – Combining limited caps on patient compensation when evidence-based practices are employed with stronger informed consent and patient education efforts;

  • End-of-life care – Mandatory end-of-life counseling that includes videos of ICU end-of-life care and hospice alternatives; and

  • Patient safety – “Zero tolerance” for failure to wash hands and follow other proven patient safety measures by hospital personnel.

Saving More Than Money

What would this translate to for the United States?

  • Cutting current wasteful medical spending could save about $500 billion a year, every year. That’s not the half of current spending that’s considered wasteful. It’s not even a quarter – it’s more like 18%, which reflects the reality that we’ll never succeed in removing ALL of our wasteful medical spending. Over a decade, that’s $5 trillion and about half of that would be taxpayer dollars – perhaps the single biggest impact possible on our record-level federal debt;

  • Cutting current medical errors by half would save over 50,000 lives a year – more American lives than are lost every year on our highways or to homicides and suicides combined

  • Cutting unnecessary hospitalizations by half would avoid over 2 million hospitalizations every year and the associated risks of hospital-induced disease – including cognitive decline – and their expense.

This would still leave us with much room for improvement, but would at least justify the national disruption and angst the Obamacare debate has provoked in this country. To have endured the scars on our national psyche and the political post-traumatic stress it’s left in its wake for so little by way of actual substance is among the greatest failings of Obamcare.

Had this wish list been part of Obamacare, at least the damage to the national psyche might prove worth the sacrifice. Instead, the modest measures actually included in Obamacare – compromises on compromised starting points – are not likely to prove worth a fraction of the heat they’ve generated.

Too Much Ado

It’s not exactly a case of “much ado about nothing”, to borrow from the bard, but it’s definitely an example of “too much ado about too little”. Not very poetic perhaps, but more accurate than the wishful thinking by those trying to rationalize this weak attempt at health reform as some type of breakthrough event.

It’s still possible that Obamacare will serve as a platform for further reforms of greater substance, but this may prove difficult given that it preserves the current dysfunctional medical infrastructure and payment system. The intense political backlash provoked by the modest measures included in Obamacare is also likely to discourage significant improvements in the near-term.

Those who oppose Obamacare fear just this outcome – they see Obamacare as the first step on the dreaded road to “government-run healthcare”. While this is posited as something to be feared, every objective measure indicates that government-run healthcare in America (in the form of the Veterans Health Adminstration, or VHA) outperforms profit-driven private healthcare:  fewer medical errors, better automation of information, better quality outcomes, and lower costs – everything, in short, that our dysfunctional healthcare system so desperately needs. And it does so with an older and sicker patient population.

But the political debate over Obamacare isn’t about facts; it’s about commerce-driven ideology. Those who fear and despise the government see creeping socialism in every postal delivery.

Being victimized by the private sector is somehow superior, by this thought process, to being victimized by the government – even if the degree of victimization is even greater given the private sector’s profit incentives.

Most Americans, however, would prefer to not be victimized at all, and if removing the profit motive results in one less human incentive to take advantage of vulnerable patient populations, then that – one might think – would be a good thing.

Why Defend Our Abysmal Status Quo?

The problem with the preserve-the-status-quo logic of Obamacare opponents is that it doesn’t even deserve to be debated, much less to have had the massive effect it’s had on national health reform efforts.

After reviewing the evidence, it’s hard to understand how anyone can rationally argue for preserving the status quo in American healthcare.

And the fundamental illogic of disputing the legitimacy of government’s role in our healthcare – when the majority of our current healthcare is already paid for by the government – is ludicrous on its face.

Were we to dissolve Medicare as anti-government reactionaries would have it, the resulting medical anarchy would leave our senior citizens at the not-so-tender mercies of private insurance companies – who could be counted on to be even more aggressive in denying coverage to this high-risk, high-cost population.

And how on earth can the AMA possibly endorse Medicare vouchers that are the first step toward just that outcome (see “Why Is the AMA Trying to Kill Medicare?“).

Is more such private-sector rationing really something we should seriously entertain? If not, then why do we give credibility to the same arguments for any patient – including those not on Medicare?

The sad truth is that as long as Americans are content to be duped to vote against their own self-interests by appeals to their baser instincts, meaningful reforms to our bloated, dysfunctional, and dangerous healthcare system will continue to elude us.

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