Health care reform needs a do-over

By Arnold Relman, M.D.
USA Today, July 10, 2012

The Affordable Care Act narrowly escaped death at the hands of the Supreme Court, but its troubles are far from over. Stability in how Americans will get their health care in the future is now just as much threatened by the ACA's internal flaws as it is by Republican opposition and fresh lawsuits.

Republican presidential candidate Mitt Romney's plan to undermine the Obama administration's health care reform effort if elected is well-known. But even if President Obama is re-elected and Democrats regain control of both houses of Congress, the ACA's problems will not disappear.

Although, as it is implemented, the law will expand insurance coverage and make the health care system fairer in many other ways, the financial side of the ACA has serious problems that make it unlikely to survive in anything like its present form.

Reforms fall short

It leaves most private health care in the hands of a for-profit insurance industry that takes a huge share of health care money (15 percent -20 percent of private premiums) for its own business expenses and profits, and adds paperwork and billions in additional administrative expenses to hospitals, physicians and patients who must deal with it.

Although it establishes a committee to propose cost-saving legislation to Congress and supports trials of new payment systems designed to control costs, these measures are not guaranteed to work.

The ACA does not replace fee-for-service payment or the commercialized medical care marketplace, both of which raise costs by encouraging unnecessary services and allow opportunity for fraud.

Compounding these problems is the sheer complexity of the legislation, which requires elaborate and expensive regulations. Neither taxpayers nor health care consumers will get the lower costs they have been promised.

A different solution

For this reason, some Democrats, otherwise supportive of the administration, believe that the ACA was misconceived and will inevitably become unworkable. These critics differ from the anti-ACA Republicans in what they propose to substitute for ObamaCare.

Republicans preach consumer choice and price competition as solutions, favoring high-deductible private insurance with health savings accounts, which they believe would give patients financial incentives to shop for lower medical prices and reduce the demand for services. Unfortunately, none of these policies has ever been shown to control costs without reducing access.

Liberals who consider the ACA to be fatally flawed favor replacing private insurance with a publicly funded single-payer system that provides universal access to care. They point to many advanced countries that rely on such systems to provide less costly, but better, service than the United States. Medicare is, of course, an example of a single-payer program for all citizens 65 and older, but its costs are unsustainable because it largely depends on the fee-for-service payment and a commercialized medical care market that other single-payer systems are designed to replace.

The ultimate solution will prove to be medical care provided by non-profit physicians groups that are compensated on a per-capita basis by a single payer. Such reform will be a long time coming because it will require major political realignments. In the meantime, the ACA will help reduce the misery that would otherwise ensue as we slowly and painfully seek a better system.

Dr. Arnold Relman is professor emeritus of medicine and social medicine at Harvard Medical School and former editor in chief of The New England Journal of Medicine.