Obama’s Reform: no cure for what ails us by Drs. Himmelstein and Woolhandler
Ali Thebert
By David U. Himmelstein and Steffie Woolhandler
British Medical Journal, March 30, 2010
As the applause fades for President Obama�s health reform, David
Himmelstein and Steffie Woolhandler fear that the new law will simply
pump funds into a dysfunctional, market driven system
It was a stirring scene: President Obama signing the new health reform
law before a cheering crowd, and a beaming vice president whispering in
his ear, "This is a big fucking deal." As doctors who have labored for
universal health care we�d like to join the celebration, but we can�t.
Morphine has been dispensed for the treatment of cancer � the reform may
offer a bit of temporary relief, but it is certainly no cure.
The new law will pump additional funds into the currently dysfunctional,
market driven system, pushing up health costs that are already twice
those in most other wealthy nations. The Medicaid public insurance
program for poor people will expand to cover an additional 16 million
poor Americans, while a similar number of uninsured people with higher
incomes will be forced to buy private policies. For the "near poor" the
government will pay part of these private premiums, channeling $447
billion in taxpayer funds to private insurers over the next decade.
Unfortunately, private insurers win in the marketplace not through
efficiency or quality but by maximizing revenues from premiums while
minimizing outlays. They pursue this goal by avoiding the sick and
forcing doctors and patients to navigate a byzantine payment bureaucracy
that currently consumes 31 percent of total health spending. The health
reform bill�s requirement that uninsured people buy insurers� defective
products will fortify these firms financially and politically.
Meanwhile insurers will exploit loopholes to dodge the law�s
restrictions on their misbehaviors. For instance, the limit on
administrative overheads will predictably elicit accounting gimmickry,
for example by relabeling some insurance personnel as "clinical care
managers." While insurers are prohibited from "cherry picking" �
selectively enrolling healthy, profitable patients � they�ve
circumvented similar prohibitions in the Medicare health maintenance
organizations (HMOs). The ban on revoking policies after an individual
falls ill similarly replicates existing but ineffective state bans.
Sadly, even if the reform works as planned, 23 million people will
remain uninsured in 2019. Meanwhile the public and other safety net
hospitals that uninsured people rely on will have to endure a $36
billion cut in federal government funding.
Moreover, many Americans will be left with coverage so skimpy that a
serious illness could lead to financial ruin. At present, illness and
medical bills contribute to 62 percent of all bankruptcies, with
three-quarters of the medically bankrupt being insured. The reform does
little to upgrade this inadequate coverage; it mandates that private
policies need cover only 70 percent of expected medical costs. The
president has often promised that "if you like your current coverage you
can keep it." Yet Americans who now get job based insurance will be
required to keep it � whether they like it or not. And many who receive
full coverage from an employer will face a steep tax on their health
benefits from 2018.
Soaring costs and rising financial strains seem inevitable, despite
claims that the reform will "bend the cost curve." Computer vendors have
trumpeted imminent cost savings for half a century (see, for instance, a
video made by IBM in the 1960s, available at http://bit.ly/cckdtB).
Prevention, though laudable, does not generally reduce costs. Windfalls
from prosecuting fraud and abuse have been promised before. The new
Medicare advisory board merely tweaks an existing panel. Without an
enforcement mechanism, stepping up comparative effectiveness research
cannot overcome drug and equipment makers� promotion of profligate care.
Existing insurance exchanges where patients can compare and shop among
private plans haven�t slowed growth in costs for public workers
nationally or in California. And the mandated experiments with capitated
payment systems are warmed-over versions of President Nixon�s pro-HMO
policies and subsequent failed initiatives to fix America�s health cost
crisis through managed care.
Experience with reforms in Massachusetts in 2006 � the template for the
national bill � is is instructive. Our state�s costs, already the
highest of any state, grew by 15 percent in the first two years after
reform, twice the national rate. Moreover, capitated physician groups
had costs at least as high as those who were paid on a fee for service
basis. Meanwhile, after initial improvements in the state, access to
care has begun to deteriorate, and the state has begun to cut back coverage.
Overall, President Obama�s is a conservative bill, drafted in close
consultation with the drug and insurance industries. Its modest salutary
provisions � such as an extra $1 billion a year for community health
centers and the expansion of Medicaid � mirror measures that have been
passed even under Republican regimes. Its central tenet, that the
government should force citizens to buy coverage from a for-profit firm,
was first proposed by Richard Nixon when faced with the seeming
inevitability of national health insurance in 1972. Similarly, Mitt
Romney, a favorite of conservatives, embraced the Nixon approach as
Massachusetts governor in 2006, a stance he has now abandoned.
Democrats, having retreated from their traditional push for national
health insurance, freed Republicans to move still further to the right.
Throughout the reform debate we, and the 17 000 others who�ve joined
Physicians for a National Health Program, advocated for a far more
thoroughgoing reform: a non-profit, single payer national health
insurance program. We will continue to do so. Our health care system has
not been cured or even stabilized. For now, we will continue to practice
under a financing system that obstructs good patient care and squanders
vast resources on profit and bureaucracy.
Passage of the health reform law was a major political event. But for
most doctors and patients it�s no "big fucking deal."
David U. Himmelstein, M.D., is associate professor of medicine at
Harvard Medical School and Steffie Woolhandler, M.D., M.P.H., is
professor of medicine at Harvard Medical School. They are also
co-founders of Physicians for a National Health Program.
Cite this as: BMJ 2010;340:c1778