The United States spends more than other industrialized nations on healthcare, and in some surveys the USA comes in last place for certain outcomes. Here is why our system is broken, and four ways to improve health in America that could garner bi-partisan support.
Why is our healthcare so messed up?
The short answer to why our system is so fragmented is the cost of care is out of control.
We could spend months explaining why healthcare costs are so high because there are a ton of reasons, but a few examples include: too much fraud waste and abuse, huge administrative costs that equal almost $1 trillion each year, too many people uninsured because they cannot afford skyrocketing premiums.
Throw into the mix the fact we are facing a shortage of 100,000 physicians, an increase in demand for services as a result of the ACA, and a country too addicted to either fast food or reality television to even begin to care or even know that there is a problem. It is actually a crisis.
As a recovering Senate Finance Committee staffer, and one who saw first hand how policy is crafted in Washington, a repeal effort or real changes to the Act will be difficult. The reason is how complex this law really is, and how much authority was delegated to the executive branch to implement ObamaCare. In many ways, it is still being written.
Therefore, any real change to this law has to come in the form of regulatory changes or through a health reform 2.0 effort. When the latter eventually happens, here are a few suggestions on places policy makers could begin the conversation.
1) Include employers in discussion
The big question is whether or not employers will drop coverage. Many may end up doing so because they cannot afford the rising costs and if they continue to rise, the excise tax on high cost plans could come into play and give them no other choice, but to drop for economic reasons. The question will be how will this impact their employees, and therefore should they be conducting a cost benefit analysis and put appropriate systems in place for compliance with IRS official employer report due in late February, 2016 which requires quite a bit of information.
Many small and mid-sized companies are currently getting a pretty bad deal as a result from a few provisions in the law, and they did not really have much of a seat at the table when the ACA was crafted despite the fact around 150 million Americans are covered by an employer group plan. If the nation is serious about health reform, employers need to be included in any health reform 2.0 efforts.
They will be more interested this time around because rising health insurance premiums are eating away profits each year and their employees have a stake because their take-home pay has gone down.
If Congress could pass tax reform and make it more attractive for employers from a tax perspective to offer a defined contribution plan it could be a win-win and allow employees choose from a menu of options as opposed to what most have now, which is a choice of two or three plans. This would allow the employer to fix healthcare costs and employees to choose from a bigger selection. Tax reform would really help move this along and it would go a long ways in lowering costs long term.
2) Provide incentives to states who improve health of population
States have a vested interest in improving the health of their residents because the Medicaid program is one of the biggest expenditures of their state budgets and many politicians do not like to vote to raise taxes. One way to lower costs will be to reform the program locally to make it the most efficient and friendly to providers. If they could get federal dollars for investments in improving the program, they could work with authorities in the industry to reform their program to make the most sense for their population. Prevention for Medicaid beneficiaries will also be quite important and improving access to care is something a state can do because they know their local situations better than Washington.
3) Allow states to opt out of ACA if they can do better job
There is a little known provision in the ACA that would allow states to opt for an innovation waiver to do their own reform effort. If they can cover the same amount of people as the ACA and not add to the deficit then they can apply to get of the law. Some states can do it better and may like this approach. Congress needs to explore this further and there have been bills introduced to move this date up for states to apply. Many states did health reform efforts on their own prior to the ACA and they should be able to explore this if they would like.
4) Motivate and turn loose private enterprise to help fix the problem
When you look at the healthcare industry it is currently like the wild West with everything that is happening. Spending in healthcare comes about half from government sources and half from prices. The industry is $3 trillion and there is a lot of profit and therefore jobs to create by entrepreneurs and other companies. The government needs to recognize the power of technology and make it easier for these companies to help solve the problem and make resources available to start-up companies on a mission to help solve healthcare problems and create new products to make things more efficient and improve care. The Administration did something huge earlier this year when they published what Medicare pays each healthcare providers. It is very valuable to big data companies and many of them are mining it to create the best products.
The two main controversies of the Affordable Care Act were could we as a nation afford to add a new entitlement program to our budget that is maxed out and whether or not the act contained too much government control. Prior to the ACA, half of spending came from the government. The Medicaid program is expanded and new government run insurance exchanges are created. This will have a collective cost and has caused push back from many governors.
Finally, the issue of government control is becoming a more common theme. In many ways, pundits credit the ACA for the formation of the “tea party,” and it was a bit ironic the fact House Majority Leader loss makes it difficult to repeal the law before the election. The reality is most legislating ends in July of an election year. The rest of the year is reserved for campaigning and political exercises.
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