Some of the shortcomings of the Affordable Care Act

In the following reaction paper, the student identifies some of the successes of the Patient Protection and Affordable Care Act (Obamacare).  Basing her thoughts on some points made by Elizabeth Rosenthal, the student also reviews some of the limitations or shortcomings of the act. 

The United States is one of the wealthiest countries in the whole world. This would lead you to believe that nearly all its citizens would be well taken care of and not forced to suffer a lack of health coverage. This has been far from true. However, on March 23^rd, 2010 the Patient Protection and Affordable Care Act (PPACA) came into effect under President Barack Obama, who believed that healthcare should be a right for the American people, not a luxury. This act was designed to increase health insurance quality and affordability while lowering the number of uninsured people. The law required insurers to accept all applicants, cover specific conditions, and charge the same rates regardless of pre-existing conditions or sex. 

The PPACA did great things statistically for uninsured Americans. The percentage of uninsured Americans went from 16% in 2010 to 8.9% in 2016 and 24 million more Americans were covered with health insurance in the year 2016 than would have been without the PPACA. It’s estimated that this healthcare act has saved nearly 50,000 lives that would have been lost had those people not had health insurance. 

Having said that, I found a very interesting article called “Sorry, We Don’t Take Obamacare” on the New York Times website, outlining some of the shortcomings of the Affordable Care Act. The author, Elizabeth Rosenthal, discusses how the healthcare plans offered by insurers like Anthem and United Health were very different from those being offered by employers. These plans provided less coverage away from patients’ home states, required higher patient outlays for medicines, and included a very limited number of doctors and hospitals. Rosenthal contributes many of these problems to the broad standards for PPACA plans, which allow insurers considerable leeway in designing their exact offerings. For-profit insurers naturally tend to exclude high-cost, high-end hospitals and physicians. 

All in all, I see both sides of the coin. Unfortunately, no system, especially one as large as one that is trying to provide universal healthcare, is perfect. There are risks when you must collaborate with big business insurance companies who only want to turn a profit. However, I do believe the PPACA is doing more good than harm. Saving lives and increasing healthcare is my number one concern for this issue. Having said that, I would like to see stricter guidelines in place for insurers to further cut costs on premiums and medications while providing access to a wider variety of hospitals and doctors. 

Source: https://www.nytimes.com/2016/05/15/sunday-review/sorry-we-dont-take-obamacare.html?_r=0

The Affordable Care Act was written partly by the hospitals (including the for-profit hospitals) and the health insurance companies, and other associated profit-making industries involved in providing health care. To gain sufficient support from these powerful interests in the medical industry, the people creating this law had to figure a way to allow these corporations to continue profiting under the new regulations and rules.  Most of the rules were going to reduce the profits of health care, so other rules had to be introduced (or prevented) so that profits could increase or at least be preserved at a level that would be acceptable to the profit-takers.  If you remove life-time limits, so that insurers can be responsible for unlimited lifetime health care costs, you have to give something.  If you take away the insurance company abilities to exclude persons with pre-existing conditions, or kick people off their insurance if they get sick; then again, you must give something.  If you mandate that the minimum standards of insurance include certain things that the insurance companies sometimes exclude, as a consequences you have to find something else you can give to the companies to compensate for that. 

One way for the insurance companies and health care provision companies to keep costs under control is to limit and restrict the choices of health care consumers. If consumers have total freedom of choice, then they can go anywhere, and see anyone, and get any sort of service, and costs become less predictable, and consumers tend to spend more.  In other words, the freedom of the healthcare consumer and the doctors and nurses who see them is opposed by those who want to control costs, whether they are for-profit health care providers and insurers trying to keep down costs so that profits will remain for their investors or whether they are government bureaucrats trying to reduce the spending of public tax revenue in a public medical insurance policy.  

The higher patient co-pays or personal spending on health care will be sought in a “free market” system in which only a handful of fairly non-competitive health care providers compete in markets that are geographically limited (there are limits to how far people will go to get a bargain in the prices they pay for medicines and doctors services).  The same increases in costs will occur in a public system in which the public administration of the health care system seeks to get maximum efficiency, reducing “wasteful” spending on unnecessary or possibly ineffective services and treatments. 

The thing that continues to amaze me is how timid the government has been in applying its coercive regulatory authority over professions and corporations.  Why not simply dictate that as a requirement for licensing and authorization to practice medicine, or nursing, or insurance, or dentistry, or hospital administration, that doctors, dentists, nurses, hospitals, and insurance companies must do… and then dictate terms? If there is a problem that a doctor or hospital “won’t take Medicare” or won’t participate in some part of the PPACA, why not simply make it a law that doctors and hospitals have no right to turn away Medicare patients (perhaps they only will be allowed to turn away Medicare patients when the percentage of their case-load of patients using Medicare to pay exceeds the percentage of all persons in their geographical area who are using Medicare by 10%)?  If medical care costs when traveling are too high, why not have the government dictate that such costs cannot be higher than costs of using local providers by more than some percentage amount? 

Is there something wrong with limiting choice of doctors and hospitals?  There may be a problem if such limits impose harm on people’s health, or cause significant inconvenience.  But, suppose records show that three hospitals meet standards of care, and two don’t, then in such a circumstance, why not encourage patients to use the three hospitals that meet standards by allowing them to pay the least to get care in those hospitals, and discourage patients from seeking care in the two hospitals that fall short in standards of care by imposing larger costs on the patients if they use those inferior hospitals?  

Let’s say there is a procedure that costs between $20,000 and $120,000 to perform, and on average costs $70,000.  Let’s say that the average “success” rate of the procedure is 80%, and the average 5-year relapse or reoccurrence of the problem the procedure addresses is 40%.  I would make a scale for this procedure like this:

Level 5:  Success rate over 80%, 5-year reoccurrence under 40%, cost less than $50,000.
Level 4:  Success rate over 80%, 5-year reoccurrence under 40%, cost between $50,000-$70,000.
Level 3:  Success rate over 80%, 5-year reoccurrence under 40%, cost over $70,000.
Level 2:  Either success rate over 80% or 5-year reoccurrence rate under 40%, but only one, and not both, are better than the average.  Cost is below average ($6,000-70,000).
Level 2:  Either success rate over 80% or 5-year reoccurrence rate under 40%, but only one, and not both, are better than the average.  Cost is above average ($70,001-$120,000).
Level 1:  Success rate under 80% and 5-year reoccurrence rate over 40%, but cost is low ($6,000 to $50,000)
Level 0: Success rate under 80% and 5-year reoccurrence rate over 40%, and cost is average or high ($50,001 to $120,000)

I would then restrict the freedom of my patients or the persons I was insuring by letting them pay the least out-of-pocket if they would go to a provider that was rated as a level-5 provider of that procedure.  They would pay a bit more to go to a level-4 provider of the same procedure, and a bit more than that to go to a level-3 provider of that service, and so on and so forth to the highest out-of-pocket fees for choosing to get the services from a level-0 provider.  

The PPACA goes in this direction to some degree by having health care providers keep records in a certain way and report things related to costs and outcomes to the government, so that care providers get feedback on how they are doing in terms of delivering services that are meeting quality standards and doing so at prices that are relatively lower or higher than average. There are consequences and incentives to push providers to try to be both more effective and more efficient in service provision.  It makes no sense for the information about “effectiveness” and “efficiency” to be collected by a host of competing private organizations; it all ought to be collected and shared by one central disinterested professional organization (a public entity). The information ought to be used to reward the most effective and efficient providers of services (by allowing private insurers and public health provision programs to guide patients toward the best services).  The same information can be used to intervene with the least effective or least efficient service providers, determining why their ratings are low, and helping them improve. For example, local customs may be causing a decline for regional ratings on effectiveness, and a public health intervention is needed to change local customs.