Obamacare Replacement Won't Drain the Healthcare Swamp

In his February 28 address to the Joint Session of Congress, President Trump called the Affordable Care Act (ACA or "Obamacare") an "imploding disaster."

His references to soaring premiums, contracting choices, and market collapse are all spot on. And of course everybody wants "reforms that expand choice, increase access, lower costs, and at the same time, provide better Healthcare." Trump wants Americans to be able to choose "the plan they want, not the plan forced on them by the government."

But what must we do "first" and "second"? From a physician’s perspective, "first" is to make the diagnosis. "Second" is to remove the cause of the ailment if possible. And that means to drain the swamp.

Unfortunately, Trump’s "first" is to "ensure that Americans with pre-existing conditions have access to coverage" and "second" to "help Americans purchase their own coverage, through the use of tax credits…."

These "popular" ideas emanate from the swamp, percolating up through lobbyists, think tanks, and congressional "leadership." Correctly translated, these mean to abolish true insurance — and the only reason for buying it when healthy — and to force healthy or higher-income people to pay more than their fair share. A "refundable tax credit" is a disguised subsidy, courtesy of present and future taxpayers.

And who are the swamp dwellers? They are the ones who siphon off a huge portion of $3 trillion "healthcare" dollars — perhaps 50 percent or more — before it goes to anything recognizable as a medical good or service received by an actual patient. They are part of the vast growth in the number of administrators compared with physicians. They include the "nonprofit" hospitals that charge up to ten times as much for a surgical procedure as the Surgery Center of Oklahoma does. They include brokers who "re-price" medical bills — getting a 30 percent "discount" from a bill that is overpriced by a factor of two or more and pocketing a cut of the "savings." And they include the code writers, the regulation writers and auditors, the software and hardware vendors, and the data aggregators who are selling your medical record for profit.

Denizens of the swamp are self-identifying, as in a January 25 letter to President Trump and Vice President Pence offering to help implement "value-based" care. The more than 120 signatories include the American Medical Association (whose main cash cow is the CPT procedure codes that doctors must purchase), numerous other medical trade associations (who help doctors learn how to comply with ever-changing rules), insurers, giant hospital systems, pharmaceutical companies, and self-certified "quality" agencies.

The "resources" they plan to save come from care denied to patients, and especially from the 19 percent of medical spending that goes to physicians’ practices. Instead of paying doctors more if they work more ("fee for service") the system will pay for data collection and protocol compliance, and punish doctors if they order more tests or treatments for patients. And of course, all those involved in determining "value" get paid first.

The healthcare planners’ bane is the 10 percent of medical spending that goes directly from the person getting the service to the person providing it. None of this leaks into the swamp, and the value is determined by patients, who are presumably too ignorant to make complex judgments.

Swamp dwellers generate reams of studies about the resources that go to actual medical care — some of which would be exposed as being of limited value if patients had to pay out of pocket for them voluntarily. But such studies avoid mention of the enormous resources that go to "planning," "certifying," "evaluating," "reviewing," etc. — which vanish without a trace into the bureaucracy. Of course, these agencies like to conflate "care" with "coverage": care is a loss, not a profit center. Even if ACA demands a "medical loss ratio" of 85 percent, that means at least 15 percent is diverted from actual care, and 15 percent of $3 trillion is a huge amount of money. If coverage is "comprehensive," third-party managers have access to much more than they would if insurance covered only unpredictable catastrophes.

Trump needs to see through the subterfuge, and drain the third-party ("insurance") swamp before it drains the life out of American medicine — into activities that patients would probably find to be of zero value.

Jane M. Orient, M.D. is executive director of the Association of American Physicians and Surgeons. She also is president of Doctors for Disaster Preparedness, and is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives. She is the managing editor of the Journal of American Physicians and Surgeons. She also is the author of "Your Doctor Is Not In: Healthy Skepticism about National Healthcare." For more on Dr. Orient, Go Here Now.