Affordable Care Act: We can do better

By Laurence S. Jacobs, M.D.
The Democrat and Chronicle (Rochester, N.Y.), June 18, 2012

The country now awaits the upcoming Supreme Court decision regarding the Affordable Care Act (ACA). No matter what decision is made, however, it is important to recognize the inadequacies of the ACA, and to understand the optimal solution to our health insurance crisis.

It should be recognized that the ACA has a number of commendable features. These include the expansion of Medicaid, enhanced funding for community health centers, restrictions on rescission of policies and on denials of coverage based on pre-existing conditions, and the provision for coverage of children up to age 26 on their parents’ policies. However, these could have all been enacted on a stand-alone basis.

However, the ACA entails many problems, of access, cost, and equity. When fully implemented by 2019, the ACA will cover less than half of our currently uninsured, leaving approximately 26 million people without health insurance. Such uninsurance is presently instrumental in the deaths of about 50,000 people per year, nearly one every minute. Many people forgo needed care because of costs; in 2010, 75 million working age adults went without necessary care due to costs!

Health insurance premiums have more than doubled since 2000; many middle-income families are faced with policies that consume up to 10 percent of income, yet provide poor coverage which offers little protection against financial ruin in case of major illness. Employer programs now cost over $15,000 annually for family coverage, and many covered people will increasingly have to deal with a limited provider network and minimal coverage, as employers reduce options and shift rising costs to employees. Skimpy insurance, with high deductibles, copays and other out-of-pocket expenses, comprise the new norm of unaffordable underinsurance.

While the personal bankruptcy rate due to medical bills in the rest of the industrialized world is zero, more than 60 percent of such bankruptcies in the United States are related to medical bills; almost 80 percent of those being bankrupted had health insurance prior to illness. The rate has not declined in Massachusetts since passage of that state’s health reform bill, as much of the new coverage there is bare bones high deductible policies. Since the ACA contains no effective cost-control measures, the situation summarized above can be expected to worsen if the ACA survives in any form following the Supreme Court decision.

We are alone in the industrialized world in employing a profit-driven private insurance system for funding our health care. The result is a fragmented patchwork of coverage, and chronic conflict between generation of returns for shareholders versus taking care of patients. The fragmentation results in extraordinary inefficiencies, with 31 cents of every health care dollar (totaling $400 billion per year) diverted to overhead, marketing, profit, executive compensation and the imposition of excessive paperwork on providers. In contrast, Medicare runs on an overhead of under 3 percent. Rather than continuing to funnel our health insurance coverage and processes through these private, profit-driven companies, we should follow the example of much of the developed world and institute a single-payer, simplified mechanism for funding our national health care.

Such a scheme would be primarily a payment mechanism. Patients would have free choice of physician, hospital and other health care facilities. Moreover, only a single-payer system offers effective methods for cost control, such as global hospital budgeting, capital planning, negotiated fees and bulk purchasing. It is easy to understand why the health insurance industry and the pharmaceutical industry, stakeholders who benefit from the status quo, have fought against a single-payer plan with every means available to them.

No matter what the Supreme Court decides, we have the opportunity as a country to embrace a solution to this problem, if we have the political will to do so. Two-thirds of the population and 59 percent of physicians support the establishment of a national health insurance program. It is the right thing to do and, increasingly, it is imperative that we do so.

Dr. Laurence S. Jacobs is Professor of Medicine Emeritus at the University of Rochester and Vice-Chair of the Finger Lakes Chapter of Physicians for a National Health Program.