By Francis M. Miller
We are now four years beyond the enactment of Obamacare and nearly two decades beyond when Hillary Clinton began pushing for a progressive solution to the health care puzzle. We have created electronic claims networks, accountable care organizations, cooperatives and new marketplaces for consumers to shop. Plan design must meet essential benefit provisions, and health plans are categorized bronze or silver to make them comparable.
Irrespective of whether you would have written the law as enacted or implemented it more skillfully, it appears here to stay.
Opponents have yet to put forth a coherent counter-proposal. And, I would suggest that the provisions of the law, which preserve health savings accounts and provide for tax credits, are sufficiently conservative in their approach to diffuse any real opposition.
The Affordable Care Act meets Mark Twain’s admonition that “Thunder is good, thunder is impressive; but it is lightning that does the work.”
But, there still seems to be something we have missed in all this. Perhaps multiple things.
The first issue is the role of health care in our economy and the world’s society. It is clear health care is the fastest growing sector of our GDP. It is unlikely we will reach a reflective point that will alter that upward trending cost curve. Health care is an overhead in our society and threatens to dispossess us all if allowed to grow unchecked.
But, health care is also desperately needed by other nations. We possess immense capability to deploy sophisticated services the same way Halliburton serves worldwide energy needs. What we somehow have to do is figure out how to be efficient and disciplined in our delivery of health care.
If health care were a major export industry, we could encourage it to be as large as its developmental potential would allow. The disciplining of health care costs, utilization and quality furthers that overriding objective.
The second issue is that health care is about to be disrupted, not by ACA and the new marketplaces, but by technology.
The emergence of genetics and genomics, and the corollary technologies will turn the primary care/specialist delivery system on its head. The providers of the future who will control and drive the system will be multi-disciplined and far more sophisticated. Today’s doctor will appear like the country doctor in a Norman Rockwell painting.
Parallel steps are being taken by patients to eat, exercise, use supplements and manage their own health.
One by one, educated people are learning to drive in the system. They are not passive patients. This surging trend may be the most profound of all because it will determine what aspects of the delivery system survive. We all know how quickly the fax machine and CD media became nearly extinct as the iPad and cloud storage became ubiquitous.
The health care system is a giant hierarchy composed of players perched in a trellis-like arrangement.
The insurance industry is dominated by seven oligarchs who have consolidated their power through the enactment of the ACA. Hospitals are like medieval castles sitting on each hill overlooking their franchised monopolies. Their ownership is now in the hands of investor-owned corporations. All the other players have aligned themselves with the major power players in this system.
What is missing, of course, is that hierarchy everywhere is disintegrating. Even the most powerful corporations are downsizing, consolidating and merging. Small business generates the new jobs. And, the nation state, largely an artifact of the industrial revolution is, itself, threatened by incompetence and inefficiency. People believe in UFOs more than they do in the likelihood of collecting on Social Security.
The debate about CEO Patty Fontneau’s bonus and Connect for Health Colorado’s budget is misplaced. In the current system, a lack of scale would be a barrier to entry. The exchange simply had to be as large as the rival dinosaurs to be a viable player. But, if the ecosystem in which all the players compete for food collapses, then we will dig up their fossils many years from now.
No sane, educated person could possibly believe that continuing to expand access is not inflationary. And, only the most naive could believe that the current system is sustainable.
The exchange did not alter the value proposition. It did not make health care more affordable, except by a smoke-and-mirrors process of subsidizing the working poor’s premiums to make them believe they were getting a deal.
It did not alter the micro-economics of the players in the marketplace to achieve lower per unit costs. In fact, it ignored the fundamental dynamics of the economics of the firm. It whitewashed the reality that monopolists and oligopolists do not change their behavior willingly.
The true reason we must use marketplace forces to discipline health care players is that we need to transform health care into an export industry to replace our lost manufacturing and agricultural base. We cannot do that if we do not alter the cost curve and reduce the average unit costs of delivering care.
Health care can only be made more efficient through market forces. Regulation and price fixing of fee schedules will not get the job done. That is too blunt a policy tool.
And, if we succeed in disciplining this morbidly obese system, we will have to shatter the power structures within the hierarchy and the oligarchs who control the system. That will take a Teddy Roosevelt-kind of trust-buster as president and legislators willing to die at the Alamo.
From the top to the bottom we will need a shakeup. My hope is that the focus of attention from this point forward be on the policy issues.
Patty Fontneau and her board have unintentionally created a large-scale organization with a fixed cost structure that is very unwieldy. If they are ever prevented from imposing user fees on health plans and forced to put them out for a vote as taxes, which they really are, they will be halted in their tracks. Then we will see how well they learned kung fu.
Meanwhile, the evolution in the marketplace continues, with or without Connect for Health Colorado.
Francis M. Miller is the past president of the Colorado Business Coalition for Health and the vice chairman of the Colorado Health Data Commission. He founded the first consumer cooperative for health care called the Alliance and is the current president of Health Smart Co-op. He blogs on www.thethoughtczar.com and is a frequent contributor to Health News Colorado.
Opinions expressed in Health News Colorado represent the view of individual authors.