Nicholas Pandelidis, MD is an orthopedic surgeon with special training and expertise in the surgical and non-surgical treatment of back and neck disorders. Dr. Pandelidis’s practice is dedicated exclusively to spine care and orthopedics. He has been practicing medicine in the York, PA area for over twenty years.
Part 1: Problems with access and cost – and ObamaCare didn’t help
The House Republican Caucus has passed a budget resolution to roll back major portions of ObamaCare. What should have been a moment of success and optimism in working toward desperately needed healthcare reform has been much diminished by the absence of specific replacement policy.
Just as discouraging are the murmurings of so-called “moderate” (fearful) Republicans who want to “replace” with an ObamaCare lite, keeping the “good provisions.” In particular, maintaining the ACA’s solution for pre-existing medical conditions would continue to further drive up health insurance premiums for all.
The good news for our country, including those anxious Republicans: There is a good and viable path forward.
There were problems before ObamaCare
The repeal and replace discussion has to begin with remembering that there was a healthcare problem before ObamaCare. Reform was needed to address inadequate medical access for the poor and those with pre-existing medical conditions, and the even more critical problem of uncontrolled healthcare cost growth that has increasingly threatened the financial well-being of individuals and families, small and large businesses, and our government at all levels.
Drivers of unsustainable cost growth
The drivers of this unsustainable growth include a 3rd party payment system that is not insurance – protecting one from an unexpected event – but rather a prepayment scheme that disconnects payment for care from consumption of care, thereby encouraging over-utilization on the demand side of the market and discouraging transparency and innovation on the supply side.
Government regulation of the insurance market significantly contributes to unsustainable cost growth. Mandated benefit coverages, restriction of insurance sales across state lines, and restriction of group associations have stifled beneficial competitive forces and increased costs.
Employer provision of healthcare – a consequence of an FDR-era government labor market price controls – involves only a single market interaction for purchasing insurance for all the employees of a given company. Fewer market interactions mean less competition and therefore higher costs. Further, employees are obliged to accept coverage that most likely doesn’t best meet their individual situations. Employer provision diverts capital from growing the business, employment, and the economy more generally. Finally, the tax exemption for employer provided insurance encourages buying more coverage than one would otherwise, and provides the biggest tax advantage to those in the highest tax brackets.
ObamaCare made things worse
ObamaCare was not reform but rather made a bad situation worse. Expanding 3rd party payment, increasing regulation and mandates in the insurance markets, and failing to address the employer provision of healthcare resulted in skyrocketing premiums. ObamaCare’s “solution” for pre-existing medical conditions – guaranteed issue of insurance with no increased premium cost – has resulted in skyrocketing insurance costs for everyone else. We are witnessing the predicted premium death spiral. As older and sicker persons have bought government price-controlled insurance, the younger and healthier have elected not to buy that expensive coverage, leaving behind more high cost persons in the insured pool, further driving up premiums, and the spiral continues. Further, those who have bought insurance – many benefiting from generous tax payer subsidies – have found that they can’t afford the copays and deductibles.
The high cost of ObamaCare’s mandated extensive benefits coverage has consumed more of companies’ revenues, stifling their growth and the economy more generally. Further, as premiums have gone up, wages have stagnated with more of total compensation going to pay for the healthcare benefit. ObamaCare’s employer mandate that penalizes companies with more than 50 employees, and that incentivizes part-time rather than full-time employment has been particularly damaging to medium sized companies and their employees.
Nothing less than complete repeal of these ObamaCare provisions can be the foundation for true reform. However, repeal alone does not repair the unsustainable healthcare market that pre-existed ObamaCare. Real reform must be implemented with repeal.
To be continued in Part 2: Repeal and Replace Must Contain Real Reform
[Ed. Note: Dr. Beth Haynes met Dr. Pandelidis through the Docs4PatientCare Foundation and originally read this article in one of the D4PC newsletters. It is reprinted here with Dr. Pandelidis’s permission.]