ObamaCare’s impact on health costs.

ObamaCare created an unworkable cost-control method when it proposed Accountable Care Organizations to manage care in Medicare. Medicare’s payment board is predicting that they will have negative consequences and is calling for them to be pared back. 

ObamaCare is premised on the assumption that government-run systems lower costs better than patient-centered health care. “Private insurance plans might be better at controlling healthcare costs than Medicare, according to a Health Affairs study released Tuesday morning.”

“Incentives count, it turns out. People will do what they are paid to do. Doctors paid to implant stents will implant stents.
Doctors paid to think long and hard about whether a stent is necessary may be less eager surgeons. This story will not be the last in this genre as incentives settle into place under government-run health care.”

In light of evidence that cost controls in Medicare result in wide disparities between different regions, a study was conducted to see how private insurance fared on that measure. It turns out that medical providers respond differently to pressures in a private, competitive market and private health plans are better able to control costs than government-run plans.

“If ACOs become the only possibility for organizing, financing and delivering care, physicians and patients alike will find themselves in a treatment straightjacket. Thus, government should not give ACOs a competitive edge. If the ACO is such a good idea, let it develop in an open pluralistic market with no subsidy or other government advantage.”

“Liberal consumer groups are aghast to learn that the Obama health team are really monopolists at heart, bent on handing hospitals a cartel in their local markets. Sunday’s New York Times report on this horror confirms what I wrote about in these pages weeks ago… I warned that the creation of ‘accountable care organizations,’ which put hospitals in control of all the doctors in their outlying areas, would lead to concentrated power over the provision of medical care–turning physicians into salaried employees and reducing consumer choices.”

ObamaCare mandates that plans allow children to stay on their parents’ plans until age 26. This raises premium costs, driving many plans to drop coverage for dependents altogether. “One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said.”

“ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.”

ObamaCare is filled with perverse incentives and unintended consequences which will lead to declining patient care. “Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses.”

“My conversations lead me to believe that many people are expecting that the plans offered in the exchanges will be Medicare-like in many ways. I feel like many people think they will have choice of doctor, choice of hospital, and the ability to dictate care. I’m not seeing how insurance companies will be able to offer such products at prices people can afford. As I talk to more and more people in the insurance industry, my thoughts seem confirmed. I may be wrong, but I think it’s worth addressing. Mistaken expectations have been, and continue to be, a real problem in health care reform.”