The Affordable Care Act is not the cause of rising health-care costs. If it were, simple repeal would fix the problem.
The cause is the massive mergers of health-care providers creating an economic and political behemoth.
Many free-market advocates did not support recent reform proposals because they lacked provisions to reinstate a truly competitive health-care market. For example, the certificate of need would have been left intact. The CON is a state law that requires state permission to have competition. It is the opposite of needing approval for corporate mergers which take away competition.
In Kentucky, antitrust laws have apparently been largely overlooked. Now all of Northern Kentucky has a single hospital system, which also employs the majority of doctors. Even approval for a small competitive force, such as a single surgery center in Northern Kentucky, is subject to the process.
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CON laws can form the basis for legal challenges which could last for years. Any reform that fails to address provider oligopolies, even if it brings more insurance companies to Kentucky, may further increase the economic power of providers and weaken that of purchasers.
Insurer Anthem’s recent decision to no longer pay when patients obtain MRI or CT scans from hospital-owned outpatient facilities is a testament to the problem. Medicare now pays most hospital-employed physicians about twice as much as a private physician for the same service. This legal scam escalates costs.
With the massive employment of physicians by hospitals, the person who patients think of as “my physician” is actually a corporate employee who is not always looking out for them and may be encouraged to use hospital-owned imaging centers with exorbitant prices.
The overprescribing of treatments and tests is also all too common. Take, for example, the opioid crisis. The Kentucky legislature had to mandate treatment guidelines to try to bring it under control. It was a sad day for the medical profession when it was unable to self-regulate and set firm standards to confront such a serious and urgent need.
This is a glaring example of how health-care integration has escalated, not lowered, costs. Nonprofits are not nonprofits when CEOs have seven-figure salaries. Without a massive reduction in health-care costs, our system will fail.
Congress is caught in the trap of promising consumers lower costs, but unable to deliver without producing fundamental changes on the provider side of health care. Many reform proposals have been unworkable cost-shifting shell games of high-risk pools, elimination of subsidies and block grants to states.
Kentucky’s legislature has not demonstrated an ability to effectively run a health-care system. Lawmakers rail against government-run health care while leaving expanded Medicaid intact. They also have been ardent supporters of the competition-blocking certificate of need laws and adverse to transparency, such as in providing consumers information about dangerous infection outbreaks in our facilities.
The legislature must implement the forces found in government-run health care or true free-market competition; not doing so leads to anarchy.
The answer to health-care reform is simple. We must lower health-care costs. Either instill true provider competition or give more power to the purchasers with a variation of a single-payer system.
In our present political climate, a pragmatic solution may be Medicare Advantage for All, in which the federal government pays a fixed amount per person to provide Medicare benefits and the patient pays modest premiums.
Health care costs would fall, since there would be an industry-wide fixed Medicare budget, and removal of the insurance company’s profit restrictions would reinvigorate them to control provider costs and not pay for unnecessary tests and procedures. All of this takes place while the insurers and providers compete for patients and policyholders.
Even with its drawbacks, it might pass the conservative litmus test. “Medicare for all” purists should remember that even traditional Medicare and Kentucky Medicaid are administered by private insurance companies. This is not an optimal solution, but with so many lives at stake and so many ideologues in government we must think outside the box.
Kevin Kavanagh of Somerset is a retired physician and board chairman of Health Watch USA.