President Donald J. Trump and the Republican-led Congress have made it loud and clear that they want to repeal and replace the Affordable Care Act (ACA) signed into law in 2010 by former president Barak Obama. This historic legislation, more commonly called “Obamacare,” enabled 20 million more Americans to be covered by healthcare insurance. Even those individuals who had a pre-existing medical condition would now be covered under the ACA. The private insurance market in some states, like California, could no longer deny coverage because of a previous medical history. To gain the support of the private health insurance companies, the ACA promised millions of additional new enrollees to spread the financial risk.
The ACA was based on former Republican Massachusetts Gov. Mitt Romney’s healthcare reform plan that relied on the private healthcare insurance marketplace to ensure that all state residents would receive affordable quality healthcare.
Democrats, who have lost control of the White House, Senate and the House of Representatives, are not planning to support the Trump Administration and Congress’ efforts to repeal the law. More gridlock in our nation’s capital is expected.
Even though Obamacare can be dramatically repaired, for the first time in national polls, more Americans, perhaps fearing the actual loss of their healthcare coverage, now support key aspects of Obamacare. They have packed town hall meetings to discuss their displeasure with members of Congress about their plans to repeal the legislation without knowing what they are going to replace it with. Many Republican congressmen are now realizing that replacing Obamacare is not going to be that easy. The major political challenge is building consensus on who will pay for healthcare services for those unable to afford them?
Statements like, “We just need to get rid of Obamacare and restore the patient and physician relationship,” and “We need to get the government out of healthcare” have been proclaimed by elected officials opposed to the law. Some have even claimed that Obamacare has destroyed the entire American healthcare system.
As a former healthcare executive for nearly 30 years, I felt it was time to encourage a more honest dialogue about health reform in America. The ACA was intended to reform healthcare insurance and not a law to reform the healthcare delivery system. Everyone talks as if Obamacare and healthcare are the same, and they’re not.
How ironic is it that the one healthcare payer who interferes the least in the physician and patient relationship is Medicare, a government program for older Americans. Ask any physician and they will tell you that Medicare, as compared to the private insurance marketplace, rarely interferes with the physician from providing any level of care determined by them to be medically appropriate. I wish politicians who claim that Obamacare has interfered with the physician-patient relationship would stop making such false statements.
The idea floated by the Trump administration and Health Secretary Tom Price of the U. S. Department of Health and Human Services is to allow healthcare insurance companies to sell insurance across state lines. Their argument is that if we could have more competition in the marketplace, we would have less costly premiums. It sounds good, but this does not translate to the healthcare insurance marketplace. It is very naïve to think this is a real solution. Premiums are determined by paid claims. If an insurance carrier from the Midwest with lower premiums wants to compete in another marketplace like New York, they will lose money unless they increase their premiums to reflect the higher claim costs in New York.
The ACA was based on a large infusion of funds from the national budget to help individuals afford the cost of healthcare premiums. Many Republicans would prefer to offer tax credits than government subsidies to purchase healthcare insurance. Tax credits can only work when individuals and families can afford to purchase health insurance in the marketplace. Offering tax credits to those unable to afford to purchase insurance is like offering someone a gas credit to buy gasoline when they cannot afford to purchase a car.
Six Suggested Reforms
To create a healthcare system that is of high quality and affordable for all Americans, the following six major reforms are required:
1. Pay healthcare providers for keeping patients healthy rather than treating them when they are sick. The current system of paying for each procedure or admission rewards the quantity of services offered versus the quality of care furnished. Hospital systems and physicians have formed accountable care organizations (ACO). The ACO can compete for bundled payment rates per enrollee from all payors.
2. Eliminate, or alter, the employer-based system of purchasing insurance. The main reason Americans have their health insurance from their employer is because during World War II, the National War Labor Board froze wages. Offering health benefits was a way to get around the law to keep attracting and retaining scarce employees. If employers would agree to increase employee salaries by the total amount they are currently paying for the health benefits, both sides would benefit. Employers could also transition to paying a fixed direct contribution to their employees who can negotiate in large association pools for coverage too.
3. Change the culture of Americans expecting someone else to pay for their healthcare needs. This removes individual responsibility for improving one’s own health. We confuse health insurance, which protects against risk of illness, with reimbursement for paying for regular healthcare services. We buy car insurance to protect against accidents and damage, not the purchase price of the car. Providers also charge more for their healthcare services when they know someone else will pay as opposed to what they can afford to pay.
4. Avoid the highly expensive malpractice cost of physicians and providers by establishing clinical best practices. If a provider adheres to best clinical practices, lawsuits would be greatly reduced and the need for “defensive medicine” would cease, saving billions of dollars annually. Trial lawyers in America won’t like this idea, but if we are to lower the cost of healthcare, we can easily begin here.
5. Allow Medicare to be the provider of health coverage for all Americans, with co-payments based on individual income and/or employer direct contributions. Everyone will need to contribute to a national Medicare system for all, but with higher salaries and less interference in the physician patient relationship, everyone will benefit. Develop a pilot program with Medicare for bundled payments. If successful, transition all Americans to a universal system of care.
6. Incorporate the current Medicaid program funded by both the federal government and states into Medicare. Since most physicians don’t accept Medicaid patients, this would dramatically increase access to high-quality medical care for all, especially the poor and underserved.
America has the best-trained doctors, nurses and other health professionals in the world. Most of the wealthiest people in the world travel to our country to have their medical care. But our system of delivering healthcare to all is very expensive and produces few positive health outcomes compared to other countries. The World Health Organization ranks the United States dead last on quality, access, efficiency, equity and healthy life expectancy. The major difference of our healthcare system compared to all other countries is the absence of universal health insurance coverage and access to care.
We do need to encourage Americans to seek preventive care, which is the most cost-effective approach compared to our current practice of treating diseases in late-stage development, which is extremely expensive and produces less positive patient outcomes.
U.S. healthcare spending grew 5.8 percent in 2015, reaching $3.2 trillion, or $9,990 per person. The six reforms to our nation’s healthcare system proposed above could dramatically lower this cost while improving access and increasing the quality of care for everyone.
By developing a healthcare delivery system that rewards providers for keeping people healthy and by committing to become the best in the world for healthcare outcomes, like our previous commitment to put a man on the moon, we will finally be able to measure and evaluate the return on our investment in healthcare delivery. Instead of politicians spending their time talking about “repeal and replace” we can begin to promote how America produces world-class patient outcomes at the lowest cost possible. At that point we can continue to attract the best and the brightest men and women to pursue careers in medicine, nursing and all forms of healthcare delivery.
Dennis C. Miller is a nationally recognized strategic leadership coach who spent over 25 years as a healthcare executive, having served as the president and CEO of Somerset Medical Center and Healthcare Foundation, a major teaching medical center in New Jersey, and executive vice president/chief operating officer of Holy Name Hospital in Teaneck, N.J. He achieved the status of Fellow in the American College of Health Executives (ACHE), and is a graduate of Columbia University’s Graduate School of Public Health; he is also the author of “Moppin’ Floors to CEO: From Hopelessness and Failure to Happiness and Success” (AuthorHouse: 2016).