Obama was right. The health care industry needed, and still does need, reform. Many many aspects of the industry are languishing under bad laws, bad incentives and bad practices. We all need to understand that and move forward in some form of meaningful reform. And there are ways to do it. And there are ways NOT to do it.
One of the things that I’ve learned in the corporate world is that the best way to solve a problem is to mandate requirements; not solutions. Unless you are the expert at a thing, the best method is to set out goals and expectations and then let the experts go and deliver. This is a remarkably hard thing to do. As a leader in the business world or in an organization, it’s easy to place the mantle of dictator on and just mandate the end game. And even when you acknowledge the need to let the folks go and deliver, it can be very difficult to set expectations such they aren’t really “solutions” in disguise.
And so it was with Barack Obama and the whole health care debate. He knew what he wanted. He came to the table with solution in hand. He wanted bi-partisanship, of that I’m convinced. But his idea of it was that the Republicans had to accept his solution. His only concern is what he would have to give to ’em to agree to it. And they wouldn’t.
So in the end what we are stuck with is Obama’s “solution”. If too many people don’t have insurance, just mandate that they all have insurance. If people are being denied coverage because they already have a broken leg, just mandate that they can’t be denied for having a broken leg. If the price of an insurance policy is going up too fast, just mandate that the price of an insurance policy can’t go up too fast.
Not so fast.
It turns out that Obama has been sellin’ us a shiny new jalopy:
First, the shiny part:
The health-reform law caps how much insurers can spend on expenses and take for profits. Starting next year, health plans will have a regulated “floor” on their medical-loss ratios, which is the amount of revenue they spend on medical claims. Insurers can only spend 20% of their premiums on running their plans if they offer policies directly to consumers or to small employers. The spending cap is 15% for policies sold to large employers.
Next, the jalopy part:
One of the few remaining ways to manage expenses is to reduce the actual cost of the products. In health care, this means pushing providers to accept lower fees and reduce their use of costly services like radiology or other diagnostic testing.
To implement this strategy, companies need to be able to exert more control over doctors. So insurers are trying to buy up medical clinics and doctor practices. Where they can’t own providers outright, they’ll maintain smaller “networks” of physicians that they will contract with so they can manage doctors more closely.
Doctors, meanwhile, are selling their practices to local hospitals. In 2005, doctors owned more than two-thirds of all medical practices. By next year, more than 60% of physicians will be salaried employees. About a third of those will be working for hospitals, according to the American Medical Association. A review of the open job searches held by one of the country’s largest physician-recruiting firms shows that nearly 50% are for jobs in hospitals, up from about 25% five years ago.
Listen. People throughout time have followed this one simple axiom: They are always looking to maximize their own selfish best interests. And when Obama mandated solutions that he had no business developing, what are people going to do in order to maximize their own self interests?
Defensive business arrangements designed to blunt ObamaCare’s economic impacts will mean less patient choice.
End. Of. Story.