Wednesday, April 2, 2014

A Quarter of a Loaf is Better Than None

By the Mar. 31 deadline for 2014 health coverage enrollment of 7.1 million subscribers under the Affordable Care Act (Obamacare) has exceeded the original projection of 7 million.  This has happened despite the inexcusable initial problems with the federal enrollment website, some ongoing glitches including on the last day, and fierce Republican propaganda against this program. 

Given their ineptness this should hardly have been "a victory lap of the Obama administration" with Health Secretary Kathleen Sebelius "beaming in the front row during the Rose Garden ceremony".  But at least the administration can heave a sigh of relief, then set about trying to fix the other glaring deficiencies of Obamacare and our health care system. 

Chief among them is the failure to effectively address overpricing which is the root cause of our colossal health expenditure.  A single payer system or a strong public option in Obamacare would have been far more effective in matching the market power of providers with a dominant buyer. Reform opponents that include private health insurers and a majority of the health industry outplayed the Obama administration in 2009 and 2010 and thwarted this.  Provisions under Obamacare like Accountable Care Organizations (ACO) or even the stalled Independent Payment Advisory Board are unlikely to drastically dent costs.

Still, there are other effective ways to slash our prices and bring them close to European levels by using supply side economics (more hospitals and doctors and competition among them).  These steps are not hard as I laid out back in my Mar. 28, '11 post.  The difficulties are primarily political, with the health lobby spending half a billion dollars annually to protect their advantage, and this is just the "official" money changing hands.

There are some encouraging signs.  I have repeatedly stressed the need and ways to expand our doctor supply, e.g., in this Sep. 11, '10 post.  It would be best to remove residency caps for all specialties altogether, but now Obama is at least seeking an extra $5 billion from Congress to train more doctors.  It may be an isolated step or signal the Obama administration is finally turning to fix supply imbalances and foster more provider (not just insurer) competition. I hope it's the latter.  Combined with the enrollment projections being achieved we're still very far from where our health care needs to be, though on a much better track than the Republicans' "Repeal and Replace" mantra.

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