The Supreme Court recently spent 3 days listening to oral arguments regarding the constitutionality of the Affordable Care Act, centering on the mandate that everyone must buy health insurance or face a fine.
This mandate goes hand in hand with the goal of providing health care insurance to everyone, regardless of any pre-existing health conditions. The Court could strike down all or part of the Affordable Care Act, but the requirement to buy health insurance appears to be the most vulnerable feature. Justice Scalia postulated that the requirement that everyone buy health insurance could open the door for the federal government to issue other mandates, such as one forcing everyone to buy broccoli because it is “good” for you.
Proponents of the mandatory insurance mandate hold that it is necessary if insurance is to be offered to everyone, regardless of pre-existing conditions. Without mandatory participation, “freeloaders” could avoid paying insurance premiums until after they get sick. Without universal participation in the insurance plan, only those actually receiving expensive medical care would have an incentive to buy insurance, resulting in very high premiums. An insurance pool needs sufficient members with a full breadth of risk to keep individual costs manageable by spreading costs among the high and low utilizers of the health care system.
L. Samuel Wann
Because most people will eventually consume health care services — whether they plan to or want to — buying health insurance is unlike buying broccoli. You can avoid buying broccoli forever, but everyone eventually gets sick. In the case of health care, those who pay insurance premiums are indirectly paying to care for those who do not buy insurance. Cost shifting, using profits from paying patients to pay for those who do not pay, is a cornerstone of our “non-system” of providing universal health care. The uninsured, often poor, receive much of their care in the most expensive setting — the ED — and often delay care until simple, easily treatable illnesses become serious and costly. Denying essential medical care to those in need because they cannot pay is not an attractive option, although rationing of medical care based on the ability to pay is a reality.
Other ways to provide universal care
The Accountable Care Act has many critics and multiple flaws. There are certainly other approaches to providing more universal access to health care, such as a single-payer system, with the government paying for health care through taxes, not payment of insurance premiums to private companies. The federal government’s constitutional authority to levy taxes to provide health care could also be challenged, but there are numerous precedents supporting this power, such as Medicare and Medicaid. Indeed, some have proposed Medicare be expanded to cover all Americans.
Many of us, cardiologists included, have a libertarian streak, resisting any new mandates from the government, especially when the mandate requires payment to private, for-profit health insurance companies. These companies enjoy about the same level of confidence and trust among the American people as does Congress. To many, it seems that you are damned if you do, and damned if you don’t: mandatory payments for health insurance to private companies or mandatory taxes for the government to provide these services.
There are alternatives to mandatory private insurance or a single-payer system sponsored by the federal government. Rather than placing the federal government at the center of health care financing, the individual states could adopt various solutions based on local needs and resources. This approach might avoid constitutional issues, but it does not address the fact that states do not have sufficient resources to finance more universal access to health care, and they lack the borrowing power of the federal government. Block grants of unrestricted funds from the federal government to the states, leaving it up to the states to manage health care delivery, may help solve the federal budget crisis and allow many creative solutions to providing good health care while reducing expenditures, or such policies could result in huge disparities in health care availability and continued waste.
‘Perfect storm’ mounting
The Supreme Court decision is due in June. Regardless of the outcome, a perfect storm is mounting. MedPac, the influential panel advising Congress, has recommended keeping primary care physician payments flat for the next 10 years while continuing to reduce specialist payments. There still has been no permanent fix for the sustainable growth rate formula, with the potential of a 30% cut in physician payment still looming over our heads. The Obama budget proposal was voted down 414–0. The Ryan Republican budget proposal is austere in the extreme, including measures such as elimination of employers’ tax deduction for providing health insurance and elimination of the home mortgage interest deduction. Neither budget is likely to achieve reality, but both point to the urgency of controlling health care costs and managing the federal debt.
In the meantime, the US health care system continues to consolidate. As more and more cardiologists experiencing increasing costs and declining revenues turn to hospital employment, hospitals are undergoing financial challenges and are also consolidating. Many community hospitals, particularly in inner cities, are operating on very thin margins; many predict that up to one-third of current hospitals may close in the next 10 years. In something of a turnabout, insurance companies have begun acquiring physician practices, hoping to manage utilization and reduce costs by avoiding expensive, unnecessary hospital costs.
Savings and efficiencies resulting from the institution of electronic health records and integration of accountable care organizations have yet to materialize. Although the quality and value of health care delivered are the most desirable metrics, conversion from a fee-for-service system that encourages delivery of an ever-greater volume of care, to a system promoting appropriate, high value, cost-effective care, has yet to evolve. The perfect storm may occur when the current generation of baby boomers enters retirement, entitled to care that we cannot afford. Arguing about broccoli is unlikely to solve these problems.
L. Samuel Wann, MD, is a practicing cardiologist in Milwaukee. He is also Section Editor of the Practice Management and Quality Care section of the Cardiology Today Editorial Board.
Disclosure: Dr. Wann reports no relevant financial disclosures.