Part III Obama and Haley on Health Policy
Obama boasted that the overseas health policy of his administration had been successful in stopping Ebola in its tracks and significantly reducing the scourge of HIV/AIDS. These were successes, not only in other countries, but were important in keeping Americans safe from these diseases. Obama had now set his regime on the path of eliminating malaria. But the criticisms ignored these successes and focused on the alleged failures of Obamacare (the Patient Protection and Affordable Care Act otherwise known as ACA) for raising insurance premiums significantly and eliminating a patient’s choice of his or her physician. Were Haley’s critiques on these two issues warranted? What were other successes and failures of Obamacare? For the major issues were not just the costs of health-care insurance coverage and access to care.
First some disclosure. When I was a medical student in the late fifties and Canadian Medicare [C-M] had not yet been invented in Saskatchewan by Tommy Douglas, I once dared to raise the issue of socialized medicine with our clinician whom our team had taken out to dinner. Two of my fellow students, those on either side, both kicked me under the table. Among the vast majority of doctors, discussing a state-run medical plan with access guaranteed to all was a no-no at that time.
When I lived in the intern quarters at Mt. Sinai Hospital in Toronto (I was not an intern) and worked in radiology, I conducted a number of survey experiments. One was to track the topics of conversations when physicians ate in the cafeteria. I was instructed to sit with them and not the nurses or other health service workers. (After all, this was 1958.) As one result, I found that 53% of conversations by physicians focused on patients who did not pay their bills and the problems of collection.
I offer this background to indicate both my bias and that of many physicians not exposed to some form of Medicare. But more guidance is needed than revealing biases. I use the designation C-M to differentiate the Canadian plan from the American Medicare prior to Obamacare that provided health insurance for seniors. When C-M was introduced, first in Saskatchewan and then eventually across Canada, doctors’ salaries immediately increased. The reason was simple; the problem of delinquent patients as well as the costs of collection had been eliminated in the single-payer system. Though increasing numbers of physicians gradually came around to acknowledge that C-M was an improvement in most ways over the previous system, many continued to gripe about the system nevertheless. Because of my bias, physician bias and the inevitable bias of many, I will refer only to the work of independent analysts.
C-M eliminated the problem of unpaid bills and collection. Obamacare has not. In fact, some evidence indicates that Obamacare has possibly exacerbated the problem. For example, problems of reimbursement to hospitals and physicians were virtually eliminated by C-M. In the U.S., while reimbursement to hospitals has been greatly improved, under Obamacare, physician reimbursement has only improved slightly. In the U.S., citizens have their choice of insurance providers. They can enroll in one of a number of competing plans. But what happens if they do not keep up with paying their premiums? They lose their coverage, perhaps after 90 days of non-payment. However, the insurers are only required to pay the doctors for the first 30-day period of unpaid premiums. Medical services are provided for the remaining 60 days with the understanding that the patients are insured. But they are not. The doctors cannot collect from the insurer and will, in most cases, be unable to collect from the patient. C-M virtually eliminated the problem of collections. Obamacare, on the other hand, seems plagued with doctors’ complaints about the unreliability of reimbursement. In addition to continuing and, perhaps, even increased losses from non-payment, there have been additional bureaucratic expenses. While C-M reduced the costs of electronic record keeping since records had only to conform to the requirements of a single payer, in general, administrative overhead for electronic record keeping as well as for collections has increased for American physicians.
One result is that doctors refuse to join many plans. This forces a patient to try to reconcile the plan he/she is in with the doctor she has selected. The two are often incongruent. That physician may or may not be covered under the plan chosen. The problem becomes a tremendous one in cases of acute health problems; a patient may have to choose between paying for a physician out-of-pocket to get the physician of his/her choice and available, or be forced to find a specialist covered by the insurer.
At the same time, to keep premiums low, insurers have to press to keep payments low. The lower the payments, the fewer the number of doctors willing to be part of the referral list covered by the insurer. Insurers have to walk a fine line between keeping premiums low, and hence payments to doctors low, versus maintaining payments at a high enough level to keep doctors enrolled. In Canada, the tension between keeping premiums low was not set off against keeping doctors enrolled in one insurer versus another, but keeping doctors from migrating to the U.S., where, in many cases, especially for specialists, medicine had been a much more lucrative profession as long as a doctor was not working in a public hospital. In the U.S., the tension has shifted. If reimbursement rates to doctors remain too low under Obamacare, more doctors opt out, thereby giving patients access to insurance but at the cost of limiting access to doctors. This is not just a possibility. 70% of Obamacare plans offer access to fewer hospitals and fewer doctors than employer-sponsored group plans or pre-Obamacare individual market plans.
The Academy of Family Physicians has otherwise lauded Obamacare, because the law offers health insurance for everybody, encourages preventative care, allows children to stay on their parents’ insurance plans until age 26, and delivers insurance for people with pre-existing conditions. The major problem Obamacare addressed was access to health care (the uninsured rate since Obamacare was introduced has dropped below 12%), but the way it was structured through the compromise negotiations meant other problems were accentuated. One major problem is the amount of time an American has to spend shopping around for a suitable plan that offers access to a doctor of his/her choice and at a level of care he/she can afford.
There is another problem. Many private exchanges avoid hospitals that are part of university-based health networks because their costs are higher given their role in research and the fact that they deal with much tougher, more complex and more expensive cases. On the other side, new enrollees are likely to inadequately insure, especially if they are young, to avoid higher cost options.
In addition to the pressure towards lower payments to doctors, another problem common to both C-M and Obamacare is the increased regulation and subjecting doctors to government regulation and oversight, a problem compounded in the U.S. by the addition of non-state insurers which have their own regulatory and service demands.
Both countries face the problem of a shortage of physicians, but the problem is even more acute in the U.S. A study by Paul Howard and Yevgeniy Feyman (“The Obamacare Evaluation Project: Access to Care and the Physician Shortage,” 26 June 2013) projected that, “population growth, demographic changes, and an expansion of insurance spurred by Obamacare will contribute to a significant shortage in primary-care physicians over the coming decade. We project that by 2025, states will experience a shortage of roughly 30,000 primary-care physicians—with about 16.5 percent (4,950 physicians) of this shortage being driven by the expansion of insurance coverage under Obamacare, while the remaining 83.5 percent (25,050 physicians) will be due to population growth, aging, and various demographic shifts.”
This data is crucial, for it means that even if only 16.5% of that physician shortage is due to Obamacare, since the U.S. already fills its current shortages by the import of physicians from abroad (over 25% of physicians in the U.S.), very many of them from poor countries with an already high physician to population ratio, Obamacare could be contributing to a decline in health services in countries which are in most need of enhanced health care. Given the U.S. pattern and extent of training of physicians, one can expect the proportion of imported health professionals, not just physicians, will increase.
Doctors face the threat of deep payment cuts under the application of the U.S. Medicare’s sustainable growth rate (SGR) formula, wherein, the annual growth of Medicare physician payments is subject to an overall ceiling. Seniors covered by Medicare are affected. The competition for doctors serving them has grown as drastic provider payment cuts called for by the SGR also tend to reduce seniors’ access to care. The legislated reductions have been temporarily set aside somewhat as each year Congress overrides SGR through what is called a “doc fix.” Without it, payments to physicians might decline as much as 25%.
The same pressures on physician remuneration have taken place in Medicaid as well. For states that agreed, Medicaid covered individuals earning up to 138% of the federal poverty level, just over $16,000 last year. Numbers were expected to increase as almost 30% of the almost 50 million uninsured Americans, that is, 15 million Americans, were estimated to be eligible. Given that about half the states did not opt to enter into the program, the enrollment of 12 million in Medicaid was viewed as outstanding as the number of uninsured was cut in half. Between October and December 2013 when the program opened up, 6.6 million applications were received directly by the federal government, most of which were applications for more than one person. Many more were received through the State Based Marketplaces (SBMs) and the Federally Facilitated Marketplace (FFM) operating in 36 states, the latter accounting for 2.7 million applications alone. Expanding eligibility, introducing a simplified enrollment process, broadening the outreach and putting a concentrated effort on enrollments all resulted in Obamacare being a tremendous success with respect to access for many who lacked it. But with much lower remuneration rates (almost 60% of regular charges), access has also been limited because 1 in 3 primary care physicians refused to accept new Medicaid patients. On the other hand, although reductions in payments to Medicare Advantage plans enacted under Obamacare were expected to lead to reductions in Medicare Advantage enrollment, enrollment in fact rose, increasing by 50% to 5.6 million.
So Haley was incorrect. Obamacare has not eliminated the choice of physicians, but it has limited that choice to a greater extent than existed previously for most Americans. The benefit is that up to fifty more million Americans will have a choice to access the health care system that they previously lacked. At the same time, insurance premiums have increased as Haley stated, but this was inherent and was bound to be the case if insurers were forced to cover those with pre-existing conditions and give access to many more old people and even young people in poor health. By forbidding denial of coverage to consumers with pre-existing conditions, as well as imposing taxes and fees to fund aspects of the new law, to make up for the costs of Obamacare and still keep premiums low, insurers put pressure on both physicians and hospitals to accept payments discounted by up to 30%. What is even clearer is that, on the issue of choice of physicians or access more generally, or the cost of premiums, the problem cannot be reduced to a sound bite and the hyperbole that the choice of physicians for Americans has been eliminated.
There are many other real problems and merits of Obamacare:
- To avoid conflicts of interest, doctors were not allowed to refer patients to hospitals in which they had an economic interest, but the cost has been to place many excellent physician-owned, specialty hospitals off limits even though they had a record of providing high-quality patient care and even though this narrowed accessibility
- The “nonprofit” Patient-Centered Outcomes Research Institute (PCORI) promises to provide valuable data on the clinical effectiveness of medical treatments, procedures, drugs, and medical devices, but the guidelines will almost inevitably result in further constraints on the ability of the physician to have the final say on treatments and procedures when reimbursements are tied to the results of PCORI
- Since last year, as an inevitable result of such programs, however organized, reimbursement has been adjusted to reflect performance based on the analysis of data collected, with the concomitant result that the variety of needs of patients and responses of physicians are forced into a cookie-cutter formulation with the inevitable result that an incentive develops for doctors to check the boxes which yield the highest returns for the least amount of time invested
- Obamacare ignored the issue of medical liability and tort reform, a problem very specific to the U.S.
The reality is that a system that aspires to allow physicians untrammeled control of patient care and the patients to be the key decision makers in the financing of care is a total chimera. This illusionary utopia cannot be achieved for physician decisions, especially as one moved up the ladder of specialization; physician decisions were always subject to checks and balances, including checks imposed by payers that have significantly increased both under a state model and a purely free enterprise model. The vision of patients being in control of financial decisions was the nonsensical partner to this illusion, for the only real partners were the wealthy who could afford to pay for what they wanted. The middle class had to choose only what they could afford and a whole swath of Americans was denied any choice at all.
With the help of Alex Zisman