So Obamacare has some seriously faulty and unusable software that they want us to use, and it peddles a whole bunch of new products that we are supposed to buy with government subsidies, or face a penalty. The products themselves have very complex specifications, many of which are not evident before the buyer pays and attempts to actually use the product. Does this remind you of anything?
The Promise
Meaningful Use – Ultimately, the goal is to reduce the cost of health care. The reason the costs are so high is that providers are not willing or able to provide proper care because they are not using intelligent technology to augment the care process. So the Federal government will create a set of requirements for EHR technology that will ensure that care provided through these certified instruments is evidence based, measurable and cost effective, which should increase the health of populations and decrease per capita costs. And the Federal government will of course subsidize the purchase of private products in a vibrant technology marketplace. The program was said to be entirely voluntary, with only a small financial penalty for non-compliance.Obamacare – Ultimately, the goal is to reduce the cost of health care. The reason the costs are so high is that people don’t receive proper care because they don’t have good insurance. If everybody buys health insurance, the risks will be equitably spread out, and so will the expenditures. Furthermore, the program was designed with all sorts of quality checks and balances (e.g. free preventive care, provider payment reform) so people will be healthier, and this should greatly reduce aggregate costs of care. And the Federal government is going to impose certain regulations on insurance products sold in the marketplace, and subsidize the purchase of these products from a variety of competing private businesses, because free market competition fosters innovation, quality and low consumer prices. The program was said to be mandatory, but only carries a small financial penalty for non-compliance.
The Purchase
Meaningful Use – The Federal government is maintaining a website listing all certified technology products, and information regarding certifiable features for each product. Initially the website was a usability nightmare, impossible to navigate, with incomplete information and practically no ability to compare products. Today, the website is much nicer and provides much better searchable information on thousands of certified and partially certified technology products. Providers who purchase a proper mix of listed products are eligible for subsidies based on their particular business circumstances. Although providers must purchase products directly from private sellers, and not through the Federal website, obtaining subsidies (or incentives) requires registration and attestation on another Federal website (operated by CMS), which has gone from bundle of horrific bugs to fairly usable and streamlined software over a period of two years.Obamacare – The Federal government just launched a website listing all approved insurance products, and information regarding compliance with regulatory components, such as premiums, copay, coinsurance, deductibles and out of pocket maximums. The website is chronically broken and is malfunctioning daily, but this website is infinitely more complex than the technology websites because it combines all three functionalities involved in the purchase of an insurance product: listing of approved products, actual purchase from many private sellers, and verification of eligibility for subsidy. Also, the number of shoppers is larger by several orders of magnitude. Nevertheless, this is just a website, and it is reasonable to expect that in a couple of months, or couple of years, it will function smoothly.
The Product
Meaningful Use – Even before they actually purchased anything, providers complained about inadequacy, irrelevance, overpricing, lack of transparency and government interference. After purchasing certified products, many discovered that products did not work as advertised and hidden costs blamed on regulations kept popping up behind every corner. Providers complained about having to switch from products that were not Meaningful Use compliant to those that are, and having to pay inordinate amounts of money for features they had no use for (e.g. why should a dermatologist have to pay for an immunization interface). Predictably, as providers began using their new technology products, two major problems surfaced at very short notice: the designers gave no thought to usability of user interfaces, and interoperability between products was practically impossible, in spite of it being a certifiable feature.Obamacare – The Marketplace insurance products are set to be activated in about two months at the earliest, but even before anybody actually used any of these new plans, people are complaining about government dictating what type of coverage one should have, how much risk people can safely assume, the unexpected high prices and inability to browse and compare apples to apples. People are irate about having to switch from non-Obamacare plans to the new plans, which may be a lot more expensive, and they complain about having to pay for things they have no use for (e.g. why should a 32 year old guy have to purchase insurance for pregnancy). Predictably, as people begin using their new insurance plans, two major problems will surface at very short notice (particularly since early adopters will be poorer and sicker than most).
- The first problem lies in the financial design of exchange plans, which were built to have deceptively affordable premiums, with very high deductibles and out of pocked limits. Yes, the government will help the poorest of the poor, and yes, those who had some sort of insurance prior to Obamacare, most likely had the same out of pocket problem, but let’s face it, most people who are shopping on the exchange can’t possibly come up with thousands of dollars before the insurance even kicks in. True, preventive screenings come with first dollar coverage, but the free screening does not in and of itself prevent anything, and any treatments for what was found during screenings will cost money people don’t have. An insurance executive, I greatly respect, referred to this emerging group of citizens which will soon include most of us, as the “functionally uninsured”. Obamacare is not addressing this problem in any way, and may even exacerbate it by making these hollow insurance products part and parcel of the law of the land.
- The second problem is the narrow networks. Good luck finding out which doctors and which hospitals are included in your affordable Bronze, Silver, Gold or Platinum plan. This is not just about “keeping your doctor”. This is about access to care, and frankly, it is about access to quality care. The model is spreading quickly and quietly all over the country. In my home town, no serious insurer would dare offer a plan that excluded the local academic health system. Until now. Not only did Anthem (one of the largest insurers in the state) drop BJC HealthCare from all its exchange plans, but to my utter dismay, while researching this blog post, I discovered that BJC HealthCare is being dropped from all individual Anthem plans, on & off the exchange, including the one I have. Just like that, on the QT. Strangely enough, narrowing the network by dropping the presumably expensive academic center, made Anthem more expensive than its one and only competitor on the exchange. Greed is good. Government sponsored greed is better.
The Results
Meaningful Use – Following a slow and rocky start, providers began purchasing certified technology products and attesting to their usage in increasingly larger numbers. The government continued to run a huge marketing campaign to sustain and accelerate adoption. It worked. The agencies in charge of this program began releasing numbers on a monthly basis showing how many providers attested and how much money the government paid out in incentives, as indicators of great success. Health care costs did not decrease, and quality of care did not improve, but we are told that these are coming any day now. As time went by, many providers discovered that their certified products are useless at best or about to go under, and hence a second wave of spending is injecting more money into the health IT industry. As technology improves, and the program is further tightened up, it is expected that the flow of cash from health care services to technology companies will become perpetual to the tune of many billions of dollars each year.Obamacare – Following a slow and rocky start, people who are seeing their existing, and way too cheap, insurance products withdrawn by insurers and/or employers, will be purchasing subsidized products in increasingly large numbers. The government will expand its aggressive marketing campaign to sustain and accelerate adoption. The agencies in charge of this program will begin releasing numbers on a monthly basis showing how many people purchased products on the exchange and how much money the government paid out in subsidies, as indicators of great success. Health insurance costs will not decrease, and quality of care will not improve, but we will be told that we need to give the program time to work and improvements are due any day now. As time goes by, people will discover that their insurance is useless, because all the good doctors and hospitals are out of the “rubble only” networks, and the plan doesn’t really pay for anything until you’re half dead and destitute. Following a public outcry, the government will kill off some of the smallest plans, and people will be asked to buy new and improved products from a shrinking number of mega insurers, which of course will be more expensive because they’re so much better. The already perpetual flow of cash from individuals, and taxpayers in general, to health insurance companies, will grow nicely over the next few decades.
Back in 2008 when this whole thing started with talk about a public option, I said that I would happily pay more for health insurance to ensure that everybody gets quality health care regardless of ability to pay. Five years later, it looks like I will indeed be paying double for health insurance, while ensuring that everybody gets low quality health care regardless of ability to pay, except of course the recession-proof Political-Industrial Complex and its financiers.
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