In the midst of the Ebola scare and Gay Marriage rights dominating the headlines, we seem to have lost our direction concerning the state of health care in America. We are now in the midst of a health care crisis. There are sweeping changes in healthcare and its administration brought on directly by the implementation of ObamaCare.
Increased premiums and insurance companies that cover less by cutting services or eliminating them altogether and bigger government control of health care seems to be the latest trend. However, most doctors see this as an intrusion and counter-productive in the way they deliver medicine. Can I say that healthcare today is in ‘critical condition’.
ObamaCare is now fully implemented after being conceived 4 years ago. It is causing frustration and financial stress to almost every doctor practicing medicine. The roll out of ObamaCare can be directly linked to a host of poor choices and contradictory arrangements that will ultimately force doctors to significantly change the way they deliver healthcare in the future.
There are some crucial points to consider about ObamaCare and how it will effect healthcare in the future. 1) The poor timing of the roll out in the midst of inflation and a poor economy couldn’t have come at a worse time, 2) Although ObamaCare was designed to insure everyone, it is not really helping the uninsured and certainly not insuring everyone, 3) ObamaCare is changing the way doctors manage their practice. It is directly leading to more administrative costs and costing doctors more money to practice , 4) In an effort to increase revenue, the government has increased taxes such as employment tax and the income tax which is hurting small businesses that make up a large majority of medical practices, 5) There is no social incentive for future doctors to practice medicine due to the increase cost of education and the burgeoning school debt , and 6) Insurance companies still have overwhelming control and power over doctors and the healthcare market and the ACA will help the very market that is driving up healthcare costs. In other words, the health insurance industry will directly benefit by increasing subscribers, but have no incentive to defray healthcare costs or decrease premiums and provide more affordable health care plans. This is completely opposite to the primary objective of the ACA. I have yet to discover where the ‘Affordable’ is in the Affordable Care Act?
“Some people are paying
such a high premium and deductible
that they may never actually be able
to afford to use their own insurance,
as silly as that sounds. “
There is an undeniable trend that has been happening over the past 20 years that includes the rising cost of healthcare, increased cost of premiums/deductibles and the decreased reimbursement of services that can’t even keep up with inflation and cost of living expenses. ObamaCare, the Affordable Care Act (ACA) or formally called The Patient Protection and Affordable Care Act is not helping deliver healthcare but rather hurting it. Premiums are increasing, most insurance plans are overpriced, most of the uninsured will remain uninsured, people will get dropped from existing insurance plans, small businesses will not hire full-time employees and drop existing health care coverage and many people will lose their primary physician in the shuffle. The patient protection aspect of this bill is something you don’t really hear about anymore, and rightly so. It’s not the wolf in sheep’s clothing. That is reserved for the ACA. Nothing has quite impacted healthcare and its administration of it so negatively than ObamaCare. This radical attempt to overhaul healthcare will do nothing more than increase insurance premiums and hurt most medical practices.
To better understand how the ACA will impact the healthcare system in the future, we have to look at basic healthcare reform. We are all aware that runaway premiums with fewer services for your money is the crux why people want to reform healthcare today. Unfortunately, implementing the ACA will cause sweeping reforms that likely will not benefit anyone directly, but may in actuality help the insurance industry. The ACA was formed in part to 1) help everyone get healthcare coverage and 2) add more benefits. In order to do this, the ACA had to address four sweeping changes 1) Guaranteed benefits, 2) Essential benefits, 3) How premiums are determines and 4) implementation of 8 essential new taxes.
Everyone is guaranteed to get healthcare coverage under the ACA. Everyone is REQUIRED to get insurance, or pay a penalty. Unfortunately, the penalty is so low in comparison to the cost of premiums, many people will opt to pay the penalty and go uninsured. The ACA is designed to provide health care coverage to everyone and prevent insurance companies from selecting customers with pre-existing conditions, end lifetime limits on coverage, force insurance companies to publicly justify unreasonable rate hikes, end arbitrary elimination of insurance coverage and also allow dependents to remain on their parents insurance plans until the age of 26.
These concepts all sound great, but I would argue that when you factor in the number of people who have been cancelled from their existing policies in reference to higher insurance administrative costs, intrusive government regulation and inevitably paying higher premiums than if ACA never existed, the uninsured will likely remain uninsured or default on their new plans. Relatively healthy people will be the ones opting out of the system and paying a minimal penalty. This will result in an insurance pool of unhealthy policy holders and more claims by those individuals. That will leave healthy individuals to pay for the rising cost of healthcare while not even filing a single claim.
All insurance companies will be forced under the ACA to have 10 categories of essential benefits. As a result, millions of people will get essential coverage that they already have, but also, coverage that they will never need. For example, older or retired individuals will pay for pediatric and maternity coverage that they will never need. This also means that younger, healthier individuals will also subsidize coverage for older, sicker people who file more claims. Premiums under the ACA will be limited but not determined by age and health. Which means younger healthier individuals will likely subsidize older, sicker people who file more claims. The cost of implementing the ACA will be passed on to insurance companies in the form of 100 billion dollars in new taxes. This will inevitably raise overall premiums by passing on this cost to the policy holders. All of these reforms will cost all individual and family policy holders more money in premiums than if the ACA never existed. Because of these increased costs, people will avoid doctors and wellness visits which will not only hurt patients and cost the healthcare industry more money in the long-term, but it will hurt the very people delivering the care.
The president and his constituents are quick to voice their political rhetoric that all is well that ends well. Touting that “the Affordable Care Act is here to stay.” The President recently said since launching the healthcare.gov website, they have now reached over the 7 million person goal of new subscribers. However, what is unclear is in that 7 million plus subscribers, 1) how many people have actually paid the premiums, 2) what is the comparative cost of those premiums before the ACA roll out and 3) have enough healthy, young people signed up to offset the cost of the older, less healthy policy holders. Also, how many people who actually signed up had their existing policies cancelled? In the bigger picture, what does it really matter how many people sign up for new plans when insurance premiums are rising and fewer people will likely seek out medical care because it is cost prohibitive?
ECONOMIC CONSIDERATIONS AND THE ACA
“The poor timing
of the roll out in the midst
of inflation and a poor economy
couldn’t have come at a worse time”
Instituting such a program while trying to recover in an already dismal economy with increasing inflation could not have come at a worse time. Although inflation rates have now gone under 2% since it hovered around 3% in 2012, they are again on the rise in the last few months. Unfortunately, ObamaCare really hasn’t helped the uninsured and premiums continue to go up adding the number of people who actually put off getting health insurance, or are out of a job and can’t afford even a minimal premium or don’t want to pay the higher deductibles. As mentioned earlier, the penalties for not having insurance are minimal compared to the cost of premiums, so many people will opt out of signing up for healthcare. Yes, higher deductibles and the overall downward trend in reimbursements has been going on even before ACA arrived. However, implementing the ACA before fixing what I call the “insurance problem” doesn’t make any sense.
We are already seeing the backlash of the ACA in the way insurance companies offer insurance by increase premiums, decreasing benefits and passing those costs off to the consumers. To get a better plan and keep the policy cost down, many policy holders are forced to have policies with higher deductibles and higher co-pays. Some people are paying such a high premium and deductible that they may never actually be able to afford to use their own insurance, as silly as that sounds. This will mean that many patients will avoid seeing a doctor until it’s too late or a condition is so bad that it requires hospitalization, which will also drive up overall healthcare costs. And when patients do see the doctor, they will pay more money up front. This has been a frustrating trend for most doctors who find it hard to collect from patient’s who already pay a substantial premium for their health insurance. We are truly getting less and less as we pay more and more.
Doctors will find ways to get around mandated regulations that seem unreasonable or are too costly.
” Nothing has quite impacted healthcare
and its administration of it
so negatively than ObamaCare.
This radical attempt
to overhaul healthcare
will do nothing more than
increase insurance premiums
and hurt most medical practices.”
You can already see this in the way hospital or in-patient care is administered. Many patients will not see their own doctors in the hospital. This duty has been shifted to the “hospitalist”. This is mainly because following a patient everyday in the hospital and not getting paid for it is just not cost or time effective. Remember the old saying, “time is money”. Well, in today’s landscape of corporate, governmentally regulated medicine, this rings frustratingly true and necessary for many physicians. It has become a numbers game, a time in which seeing more patients for less is the only way to stay ahead of the ever dropping curve of reimbursement. In larger practices, you have the added benefit to streamline your practice with the help of physician assistants and nurses. Unfortunately, many patient’s will only see PA’s for routine screenings and other forms of medical evaluations that was once only done by the physician. We are now in a market of dollars and cents to stay ahead of the ever-increasing cost of practicing medicine. A successful practice will be the most efficient ones.
This is changing the way doctors look at private practice and the delivery of health care. Many physicians will ‘downsize’ their practice, decrease their overhead by seeing only a certain percentage of patients and refuse to participate with insurance companies that have poor reimbursements. They will eliminate riskier procedures, scrutinize policies, eliminating insurance contracts and even eliminate certain insurance plans. They will go back to a fee for service model with limited patient load such as the MDVIP program. Some will even call it quits.
Probably one of the most troubling economic considerations today is the rising cost of education and the lack of governmental tax relief for families. The cost of undergraduate education is now surpassing the cost of graduate schools from 20 years ago. Many new doctors are now entering their practice with a burgeoning debt. Until the government starts to include tax relief programs for students with increasing debt or begin subsidizing the cost of undergraduate education and graduate school, there will be fewer people choosing a career in medicine. I don’t want to get into a long discussion on education and how the cost has outpaced inflation, increased in some states by 75% in the last 5 years and have forced people to take out more private loans to pay for college while income decreases and unemployment increases. In today’s educational market, getting a college education is never a guarantee of success. And I don’t think things will improve. It is my suspicion that as college enrollment tends to decrease, tuition will continue to go up. College tuition increases still constitute the largest rise in consumer pricing between the years 2003 to 2013. (79.5%). If the president would have used the increase in the consumer price index as a marker for what to address first in our economy, it would surely be to address the rising cost of education rather than focus on healthcare.
I don’t want to fully blame the president for everything that has gone wrong with healthcare, but he has done absolutely nothing to improve it by rolling out the ACA. He hasn’t really addressed the power imposed by the insurance conglomerate. Insurance greed and the ever-changing landscape of medicine into a corporate business has put off many physicians. We don’t need more government in healthcare, but less. We want insurance reform not a complete overhaul of the health care system.
Every time I see Mr. Obama explaining how good the economy is going, how we are exiting a recession, how job growth is on the increase and unemployment is on the decline and especially how the cost of healthcare is now more affordable, I cringe on his every word. If you were to ask me, like he will ultimately ask everyone when it comes to employment and the overall economy: “Are we better off now than we were 4 years ago?”, I’d to have give you a resounding “no”.
I would say that we were better off about 10 or 20 years ago. Honestly, how can the president try to ‘balance’ the budget by going back and taxing everyone at the same rates we had under the Clinton administration. Most of us came out of the Clinton administration shell-shocked by the income tax we were all paying to try to balance the budget and pay off the national debt. Using the Clinton model to try to balance the budget in this day and age is doomed to failure. Yes, the Clinton administration did balance the budget at the expense of most everyone who paid taxes, especially richer Americans.
Not until the Bush administration, did we get some tax relief. If it was not for the savings and loan debacle and the collapse of the housing market, most of us would be reaping the benefits of a stronger economy. Now, in the last 10 years we are seeing a unprecidented increase in prices which includes the rising cost of healthcare. The cost of housing, utilities, groceries, you name it – have all dramatically gone up.
Just about everything in our economy has doubled except for our income. Inflation has out paced income for the most part. And that doesn’t include the increased unemployment rates seen in the last few years. To try to equate a tax rate and now increasing our employment taxes (since January last year) in an effort to balance a budget in the presence of another governmental program such as the ACA and our dismal employment rate is frankly not sustainable. And why do you think most employers are downsizing or not hiring at all? Mandating health care imposed by the ACA and the overall state of our shrinking workforce all driven by higher tax rates and a shrinking profit margin is forcing most businesses to downsize. This will hurt rather than help small business.
Most medical practices fall under a ‘small business’ umbrella because most practices employ less than 50 employees. There is a strong incentive for doctors to not hire new employees for fear of being over burdened by employment taxes and mandated health care for these employees. The increase in employment tax is the most troubling. It means that basically for every 2 employees, a ghost employee in the form of employment tax is burdening every practice as a third employee. In other words, for every 2 employees that say make $800 every two weeks, the government has burdened the employer with an employment tax that equals that amount. This doesn’t stimulate the economy or allow businesses to grow. It actually decreases the incentive for employers such as physicians to hire. It will also force them to streamline their practice and keep part-time employees rather than hire full-time ones. The premise that Obama is helping small business is almost laughable.
From a doctors point of view, it has always been about the Insurance companies, you know, taking control, trying to manage care, increasing premiums while decreasing services and payments to doctors and hospitals. Many patients just think, “It’s those greedy doctors”, but in reality, it’s really those greedy insurance executives and CEO’s.
In the early 1990’s when I first came into practice, insurance companies were in the midst of developing the managed-care plan system, which increased the profits of the insurance companies at the expense of both doctors and patients. Since that time, we have learned what a failure the managed health care system has been. This, of course, is not surprising if you are a doctor and work on the other side of the fence. Doctors don’t want to really be regulated and told by some arm-chair administrator at an insurance company what he or she can and can’t prescribe, how many patients he or she should see and what kind of procedures we can and cannot do. Now, with the ACA, newer groups such as tech companies, instituting electronic medical record keeping, Accountable Care Organizations are all profiteering from the new rules governing the ACA.
Probably the most infuriating thing that the government is doing after rolling out the ACA is introducing a new ICD coding system (The ICD-10 coding system) that has single-handedly forced every medical practice to update their electronic billing program to comply with the new codes. An average practice will likely pay at least $5000 to upgrade their system to comply with the new coding system. Think of all the new electronic billing systems that are profiteering from the government changes. The closest analogy I can come up with is this: This is like the government coming into your home and forcing you to change every pipe of plumbing in your home to comply with their regulations, which may cost you $5000 or more. In this analogy, it would open the flood gates for new plumbers and contractors now profiteering off these new rules. And if you don’t comply, your water is turned off.. In reality, the money is like water in the pipes, it would completely dry up if a practice does not comply. Many practices are feeling the pinch of increased governmental regulations with nowhere to turn.
The constant “Big Brother” syndrome is what I like to call it. But this is not isolated to acts of our government. It is also the same power enjoyed by most insurance companies. Doctors are having to constantly refile claims due to high denials as a result of the ever-increasing barrage of codes and regulations. Shrinking income with increasing costs to deliver health care. I don’t think anyone would argue that it’s not in anyone’s best interest to see their income decrease every year, while the costs of running a medical practice and taxes imposed increase exponentially.
What most people don’t realize is the small gains physicians have made in Medicare and private insurance reimbursements or “cost of living raises” they are so comically called, have all been nullified by the cost of the ACA and the money being garnished from every insurance claim. Unfortunately, the lack of policy and direction in a system that was already broken is now leading to a mass exodus of health care professionals and slowing down job growth in an already depressed economy.
So, does the ACA really live up to its name? Is the affordable really affordable in today’s insurance market? A recent study by Forbes has concluded that ObamaCare increased the 2014 Individual-Market Premiums By Average Of 49%. According to the Government Accountability Office (GAO), Obamacare will add $6.2 billion to the federal deficit. Recall that in September 2009 Obama promised that “I will not sign a plan that adds one dime to our deficits – either now or in the future.” More studies will be conducted and unfortunately, the prognosis for our future state of healthcare doesn’t look good.
I welcome debate and comments on this topic.
Resources and Links
1. Surviving and Thriving with the Affordable Care Act by Mark Terry (Podiatry Management, September 2014)
2. Doctoring in the Age of ObamaCare by Mark Sklar. (Wall Street Journal – Opinion)
3. The verdict is in: Obamacare lowers uninsured. POLITICO (July 2014)
4. The Cost of Change:How the Affordable Care Act (Health Reform) impacts you. (YouTube)
5. White House runs ‘victory lap’ after 7M ObamaCare sign-ups, Republicans renew repeal fight (Fox News)
6. CHARTS: Just How Fast Has College Tuition Grown? (US News)
7. 3,137-County Analysis: Obamacare Increased 2014 Individual-Market Premiums By Average Of 49% (Forbes)
8. Americans will curse Obama for Obamacare (Renew America)
Al Kline is a physician and surgeon practicing in Texas. He does not support ObamaCare.
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