Reforming Health Care Reform: Obamacare vs. Romneycareby John Newport on Oct. 22, 2012, under Health Care Reform, Obamacare, Presidential Election, Romneycare
This is the first installment in a four-part series dealing with the good, the bad and the ugly of the Obama and Romney/Ryan plans for health care reform. This first post provides a detailed analysis of Obamacare, the next installment will focus on the Romney/Ryan alternative.
With election day rapidly approaching the future of the Affordable Care Act, popularly known as Obamacare, is a key factor influencing voter’s choices. This is especially true in this year’s extremely close and heated presidential race.
Virtually everyone agrees that our current health care system is unsustainable. Actually the term health care system is a misnomer, as we are really dealing with an overwhelmingly profit driven sickness care system.
Health care costs, which now consume 18 percent of our GDP, have risen 172 percent since 1999, compared with a 38 percent general rise in inflation. Yet our nation fares abysmally poor in comparison with other developed countries in terms of average life expectancy, infant and maternal mortality and other key indices of health care outcomes. Sky-rocketing health care costs threaten the ability of American employers to remain competitive in a global economy. As a result employers are increasingly being forced to shift the cost of premiums for employer-provided health insurance onto their employees.
Our nation’s health care bill for 2010 exceeded $ 2.6 trillion, which equates to a whopping $ 33,600 for a family of four! Uncovered costs associated with catastrophic illness are driving millions of families into bankruptcy, and an estimated 50 million Americans lack health care coverage of any form, including Medicaid. It is abundantly clear that our current mode of financing and delivering health care is totally unsustainable.
The Affordable Care Act (Obamacare)
While the Affordable Care Act cleared Congress without a single Republican vote, the act’s provisions embody major concessions to the pharmaceutical industry, insurance companies and other proprietary interests. Admittedly the act as it presently stands is far from perfect: in future installments I will elaborate on key problems that remain to be resolved.
Despite my reservations, I believe that the Affordable Care Act provides a very workable starting point for achieving truly meaningful health care reform. Yet polls consistently show that prospective voters who disapprove of the act significantly outnumber those in favor of it.
Coming from a public health background I am baffled by these statistics. To date the Obama administration has failed to drive home to Americans the truly impressive breakthroughs that this legislation sets forth to accomplish in terms of providing dramatically improved access to the right kind of health care, together with the act’s potential to foster responsible cost containment.
I will now highlight some of the positive features of the Affordable Care Act. Most of these features are covered by the “Patient’s Bill of Rights” which forms the cornerstone of this legislation.
- Improved accessibility to coverage – The law ushers in a series of landmark reforms designed to dramatically increase access to health insurance coverage. Provisions already in place allow young adults lacking employer-based health coverage to stay on their parents’ health plans until they reach age 26, and bar insurers from denying coverage to children on the basis of pre-existing conditions. Adults who have been uninsured for six months or longer because of a pre-existing condition now have access to new coverage options. Furthermore, when the law kicks into full gear in 2014 insurance companies will no longer be able to deny coverage to any American due to pre-existing conditions. And finally, the law’s stated intent is to extend health coverage to 30 million uninsured Americans.
- Eliminating coverage ceilings – Under provisions already in force, insurers can no longer impose lifetime limits on essential benefits, such as hospital stays. Annual coverage limits must be eliminated by 2014.
- Promoting increased access to primary care – To incentivize more doctors to serve as primary care physicians, the law provides for increased reimbursement to primary care doctors treating Medicare and Medicaid patients. In recognition of our nation’s shortage of primary care physicians (PCPs), nurse practitioners (NPs) and physicians’ assistants (PAs), the law allocates substantial funding to create new residency slots for training PCPs and also includes provision for forgiving student loan payments for PCPs, NPs and PAs who choose to practice in medically underserved areas.
- Increased access to preventive services – Under provisions currently in force, insurers are required to provide a wide variety of preventive services at no out-of-pocket cost to patients. Mandated preventive benefits for women include well-woman visits, support for breastfeeding equipment, domestic violence screening and counseling, and contraception. Additional mandated preventive benefits include blood pressure and cholesterol tests, mammograms, colonoscopies, screening for osteoporosis, and vaccines.
- Enhanced prevention and wellness benefits for seniors – These provisions of the law represent an important milestone for Medicare beneficiaries and providers treating these patients, as previous Medicare restrictions discouraged patients from visiting doctors for preventive services and also discouraged doctors from actively assisting seniors in taking charge of their health. With the exception of a one-time “Welcome to Medicare” evaluation visit, periodic health evaluations were previously not covered by Medicare unless the doctor could link the evaluation to a medical diagnosis. Fortunately the new law has changed the rules of the game. Medicare beneficiaries are now covered for a comprehensive range of preventive services, including an annual wellness visit, tobacco cessation counseling, and an array of no-cost screenings for cancer, diabetes and other chronic conditions.
- Additional benefits – These include the creation of health insurance exchanges to enable both individuals and small businesses in purchasing coverage at affordable rates, a variety of mechanisms to assist financially challenged uninsured persons, tax credits to assist small businesses in providing employee health insurance, and incentives to encourage doctors offices, hospitals, long term care facilities and other providers to band together to effectively coordinate care for Medicare patients with multiple chronic conditions. This coordination of care will be provided by accountable care organizations (ACOs), which will bring providers together to better serve Medicare beneficiaries, eliminate duplicative services and reduce risk of medical errors.
Please note that the above summary is not intended to provide a comprehensive overview of new benefits available under the law: for further information visit www.healthcare.gov/law.
To be sure, the Affordable Care Act as it presently stands is not without problems. I do believe, however, that the law affords many positive benefits to our nation’s people and moves us in the direction of fixing our broken health care system. The next installment focuses on the Romney/Ryan alternative for health care reform. This will be followed by an examination of key problems inherent in the current law, together with suggestion for remedying these problems.
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The Romney/Ryan reform strategy
While Governor of Massachusetts, Romney orchestrated a comprehensive health coverage program that in many respects has served as a model for the Affordable Care Act. In fact, when Romney secured the GOP presidential nomination I initially intended to vote for him, as I felt that his backlog of experience might uniquely qualify to propose and implement creative solutions to “bugs that need to be worked out” regarding the Affordable Care Act. Given my initial stance, I was shocked when he unequivocally stated that if elected, on his first day in office he would set forth to repeal this “terrible law”.
This 180-degree turnaround completely threw me for a loop – causing me to scratch my head and scream out “Will the real Mitt Romney please stand up?” As will described below, the Romney/Ryan stance regarding health care reform is almost totally out of step with the progressive universal health coverage legislation that he designed and implemented in the state of Massachusetts. So much so, in fact, that I am left wondering whether he found himself forced to abandon his own core beliefs in regard to health care reform, in order secure the nomination by appeasing his party’s controlling ultra-conservative faction.
While more recently Romney has somewhat softened his stance concerning the Affordable Care Act by alluding to his intention to retain popular provisions of this new law, I am unaware of his committing to any specifics.
In brief, the Romney/Ryan health care reform strategy can be summarized as:
- Relying on the free market to solve our nation’s daunting health care problems via “creative innovation”
- Leaving any planning and implementation relating to health care reform to the individual states, and
- Voucherizing Medicare
Let us address these points one by one.
- Reliance on free market to effect health care reform:
Unquestionably, the American ingenuity and entrepreneurial spirit has been the driving force behind many innovations that have improved our lives. Witness Steve Jobs’ phenomenal success in building the Apple empire starting from a modest beginning in a garage in Palo Alto.
Likewise, in the health care field private enterprise has also been the engine driving many life-saving pharmaceutical breakthroughs, together with superb technological advances in medical devices and medical imaging, to name a few.
Unquestionably the private sector has pioneered innovative health system prototypes that have forged creative linkages between doctors, hospitals and other providers with the mission of providing high quality, truly patient centered care, while simultaneously holding down costs. Examples include the Mayo Clinic, Cleveland Clinic, Kaiser-Permanente and the Puget Sound Health Cooperative. Significantly, each of these leading edge models operates as a non-profit organization.
Patient centered innovations in the private sector are by no means limited to the non-profit sphere. About a year ago my next door neighbor was diagnosed with adult onset diabetes. His health care provider, CIGNA Healthplans, a for-profit HMO, expeditiously employed their case management system to cajole and empower my neighbor to take charge of his health. Working hand in hand with his case managers, my friend converted to a very health conscious diet, lost over 50 pounds, and joined a local gym and became an “exercise junky”. Needless to say, these health conducive lifestyle changes that were actively facilitated by my neighbor’s health care provider have had a very positive impact on his overall state of health.
Despite the shining examples cited above, it is undeniably true that domination of our nation’s health care by aggressively profit-oriented financial interests has been, to put it mildly, a double edged sword.
In truth, these heavy proprietary interests have produced a highly profitable sickness care system that is bankrupting our nation! In accordance with the manner in which our health care system is structured, there is very little profit to be realized through empowering our citizens to stay well and actually improve their state of health. From a strictly financial perspective, the real money to be made is generated by letting patients become very sick, and then overwhelming their bodies with highly technological, highly expensive end stage interventions.
Indeed, a very disproportionate share of our health care resources is concentrated on highly technological treatment of end-stage illness: treatments that often produce questionable results in terms of both life extension and quality of life. While this is highly profitable for our nation’s hospitals, medical specialists, pharmaceutical companies and manufacturers of advanced imaging devices and other high-tech equipment, I submit that this state of affairs results in an incredible waste of resources that would, in my opinion, be better employed in the prevention and wellness arenas. I would add that the latter approach would end up saving tons of money for the government, employers, and private citizens.
Unquestionably, the ingenuity of America enterprise needs to be effectively harnessed in reforming our health care system. However, to place the daunting task of health care reform in primarily the hands of unfettered free enterprise, as Romney and Ryan appear to be suggesting, is in this author’s opinion highly questionable.
- Delegating health care reform to the individual states:
This is another basic cornerstone of the Romney/Ryan strategy. Essentially, they want to repeal the Affordable Care Act and leave it up to each state to craft and implement its own health care reform program.
To be sure, individual states and localities must be granted considerable latitude in customizing solutions that best respond to their own unique sets of circumstances. Indeed, state-directed health care reform has worked well in Romney’s home state of Massachusetts, and would very likely yield effective results in other progressive states such as New York and California.
I shudder to think, however, of what might happen in my own state of Arizona if responsibility for health care reform were placed in the hands of Jan Brewer and her “wing-nut” cronies in Phoenix! Remember, back in the sixties we were the last of the 50 states to implement Medicaid, and our state has recently undergone draconian cut-backs in health services for indigent patients.
- Voucherizing Medicare:
Playing on the fears of older Americans concerning possible adverse consequences of the Affordable Care Act affecting Medicare beneficiaries (a topic that I will address in detail in the second installment in this series), Romney and Ryan have repeatedly stated that they do not intend to implement any changes in regard to Medicare that will effect Americans who are currently age 55 or older.
While at first glance this may sound appealing if you fall within that age bracket (as I have for the past 16 years), we need to look beyond the sound bites to the foreseeable consequences of what they are proposing. For what I have seen to date, it appears to me that they want to duck the issue by kicking the can 10 years down the road in terms of effecting any meaningful reform impacting the segment of the health care economy that consumes the largest portion of our nation’s health care expenditures.
Even more frightening to my way of thinking are their plans to effectively destroy Medicare as we know it by “voucherizing” the system. Under this scheme, they intend to privatize Medicare by shifting over from the comprehensive system of defined benefits that currently exists to a defined contribution system, whereby Medicare beneficiaries will receive a voucher to apply toward purchasing coverage from private insurers.
While it is true that Romney has modified his initial stance to include the option of remaining with traditional Medicare in his reform strategy, what he fails to share with us is that his agenda will undermine the ability of traditional Medicare to effectively control costs. Given the option to purchase health coverage on their own via a voucher, many healthy seniors will understandably opt to purchase low cost coverage providing reduced benefits, and pocket the savings. This, predictably, will burden the traditional Medicare program with an inordinate proportion of very sick patients who will run up expensive health care tabs. Under these circumstances it will be virtually impossible for administrators of the traditional Medicare component to implement effective cost containment measures.
Analysts who have studied the voucherization proposal have overwhelmingly concluded that it is fraught with problems. There is consensus that the government will in all likelihood choose to hold down its defined contribution to purchasing health coverage as a “cost-cutting” measure. Thus, seniors will be faced with a growing gap between what they are allotted to purchase health care coverage in the private market and the actual cost of that coverage.
The GOP’s proposed reform provisions for Medicare essentially flow from a document titled “The Path to Prosperity” that Ryan released on April 5, 2011 in his capacity as chairman of the Congressional Budget Committee. In addition to plans for voucherizing Medicare, Ryan proposed to turn Medicaid into a block grant program, to operate under the assumption that the amount allocated to each state for Medicaid increase each year at a slower rate than the projected increase in health care costs.
When the Congressional Budget Office (CBO) analyzed Ryan’s proposal, they concluded that 10 years into the Ryan program the share of total out of pocket costs paid by seniors enrolled in Medicare would increase from 25 percent to a whopping 68 percent!
All in all, I have a hard time in attempting to conclude that the Romney/Ryan health care reform strategy represents a good deal for Medicare and Medicaid recipients, and the rest of our nation’s citizens.
While I favor building upon the Affordable Care Act as the most viable pathway to health care reform, I am aware that the act in its present form presents significant problems that must be resolved in implementation. In the next installment I will address two of the most serious issues – fear that we may overwhelm the system by extending coverage to 30 million “new” patients, and charges that Medicare beneficiaries will suffer devastating consequences as a result of alleged cutbacks that will occur in Medicare outlays over the nest 10 years. Stay tuned!
John Newport holds doctorates in public health and psychology and has spent the past 40 years working in various capacities in health services policy analysis, health care administration and wellness promotion. He is a former commissioned officer with the U.S. Public Health Service, and has served as a senior level research associate in health policy analysis at the UCLA School of Public Health and as a senior planning associate with a major metropolitan hospital/health services planning agency. He is author of “The Wellness-Recovery Connection”, published by Health Communications, Inc. and has published well over 200 articles focusing on health care issues, wellness promotion and the role of wellness in recovery from addictive disorders.