Obamacare is like cilantro: People either love it or hate it. However, unlike cilantro, Obamacare can't be avoided. It is happening, for better or for worse. I've spent 25 years thinking about the need for health care reform in the U.S., starting in the '80s when Intergroup, Arizona's first health maintenance organization, was founded. For over five years I worked with Intergroup, which was an honest effort to use prevention and behavior change as a way to lower health care costs.
Health care costs had already grown so high that large employers were bitching on a daily basis. Intergroup was very good at its business, but bad at lowering costs. Why? Because the prevention techniques were used by a minority of members, mostly those who were already healthy. And sooner or later, employees began demanding more choice and less gatekeeper-ism, so Intergroup had to go to a mixed model, where you paid a bit more to go "out of network."
Employers, too, were forced to pay more.
HMOs finally reverted to the old model of acceding to customer demands, and employers sucked it up again. But they began shifting some costs back to the employee in the form of higher co-pays and higher premiums. That cost shift has been going on for decades.
Obama's not the first guy to try reform. His reform is pretty tame to the advocates for universal coverage, although it doesn't seem so to the haters. He made it mandatory for everyone to have insurance or be fined. Why? Because the younger people have to support the older people and the well people have to support the sick people for it to work.
That's the way it works with all insurance. Many people pay premiums and don't use the insurance, and a few people have accidents, floods, cancer, or robberies.
As Obamacare rolls out, I think it has many, many flaws.
Here are some of them:
- Premiums on the exchanges may be too high for the people just above the ones who will be subsidized.
- They have already gone up for corporations, because the insurance companies made a pre-emptive strike in the past two years just in case all those sick people enrolled and they actually had to pay for them.
- The pharmaceutical companies were not persuaded to lower their prices.
- The doctors are terrified that they will have 32 million new sick people descending on their already burdened practices.
- The hospitals will actually have to prevent readmissions and minimize hospital-based errors and infections.
- The patients will be squeezed by the lack of primary care docs and some kinds of specialists.
- And the amount of paperwork dealing with both government and private insurance blows. It has been that way for a long time, too.
The upsides:
- A new generation of doctors is coming out of school who don't mind being on salary and are technologically literate.
- Working people who could never afford insurance and who died early of treatable diseases may live longer.
- The secrets of rationing, which has gone on since the beginning of insurance, will be outed and made transparent.
- Startups can hire talent that formerly couldn't leave large employers because they were shackled by pre-existing conditions and benefit programs for their families.
- People will not have to stay in a job they because of the insurance.
- Large employers can quit insuring their retirees, many of whom "double dip" today.
- Small employers can off their insurance to the exchanges.
My personal opinion:
In short, health care will hopefully not be tied to business anymore. Business will be free to innovate, and people will have to be responsible for their own health and well-being. The "welfare mothers" and fathers who work for government and large companies where they don't add value will be forced to fend for themselves and either make a lifestyle change or buy their own insurance.
I'm hoping the biggest consequence of Obamacare will be unintended: divorcing healthcare from employment.