The Affordable Care Act and USA Healthcare: Reaping the Whirlwind

image1Professor John Frey III is now retired from the University of Wisconsin Department of Family Medicine and Community Health but is still an active teacher, research collaborator, journal editor and ‘faculty whisperer’ about career transitions at all stages of professional life (a free service but you have to buy lunch). He lives most of the year in Santa Fe New Mexico but also part time Madison Wisconsin.

United States presidential elections are ridiculously expensive, far too drawn out, and provide an enormous amount of money for the media consultants to try to convince voters – or more likely scare them – into one position to the other. It is hard to imagine what the initial Republican Clown Car full of candidates must have looked like to the rest of the world. Culling them to a single individual has not helped all that much. Why those who suffer adverse effects from social determinants of health such as poverty, social isolation, family dissolution and low educational achievement continue to vote against their own interests and are attracted to a jingoist real estate developer and ‘small government’ libertarians has been and will be a subject of continuing analysis. Twentieth century history had lots of examples of dangerous demagoguery and likely so will the 21st.

The current situation seems to say “experience and ideas and policy don’t matter, only generalized anger”. Health care always comes up in the Republican debates as “get rid of Obamacare” as I have mentioned previously, with nothing to replace it.[1] Donald Trump infuriates the Republicans by not following the party line on health care and seemingly wants not only to keep the Affordable Care Act (ACA) but improve it in some way that he seems reluctant to describe. But Trump’s daily policy swings assure only that whatever he says he would do will likely turn out to be something else. Health care is more central in the Democratic duo, framed as a ‘pragmatist’ who can get improvements to the Affordable Care Act done versus an ‘idealist’ who advocates a national health system run by government. Having worked hard to help create two Democratic Pyrrhic victories – Eugene McCarthy in 1968 which helped elect Richard Nixon and George McGovern in 1972 which assured a repeat victory by Nixon – I personally am not anxious to stick to the purity of progressive beliefs and bring the world President Trump. Despite different visions of progress in health care, there has been movement, with Secretary Clinton suggesting permitting some people who are still working to enroll in Medicare – the program for elderly and disabled – as an addition to the ACA.

Meanwhile, the ACA moves on to insure more and more people, with the percentage of uninsured now at its lowest point in history. Young people were supposed to be the low risk participants that would offset the high risk pool, and that has happened to a great extent, although not at the levels that the government had hoped. To their credit, young people realize that having health insurance actually frees them to experiment with jobs and careers that don’t carry health benefits. As a result they are busier than ever with entrepreneurial startups and small businesses which are the life blood of society. Not tying health insurance to a job has had a positive effect on what has been labeled the ‘gig economy’ – freelancing and session work controlled by the person rather than the company. If an insured young person in the gig economy breaks a leg, it won’t mean that they have to go live with their parents because they are bankrupt. There has also not been the predicted disconnect between work-related health care as a benefit which has been the foundation of US health insurance. Companies still offer it to most employees, in part because it is a large tax deduction that industry does not want to lose and also because there is renewed competition for workers as the economy speeds up. Private coverage was declining before the ACA was passed but appears to have leveled off. While a substantial victory for the forces of good, the ACA has exposed other problems with the way Americans think about health care and have infused our culture since the mid-20th century.

Two historic cultural problems:

Insurance companies are our friends and protectors

The reforms that had led to a five year leveling off of the cost of health care in the US are now starting to be threatened by two themes that are deeply ingrained in the US psyche: first, the belief that private insurance rather than the government works in the best interests of the people and, second, that getting something for ‘free’ will create an overuse of health services by patients. These two beliefs were sowed in the wind of public opinion back in the mid-20th Century and now the country is reaping the whirlwind. While the rest of the economically developed world adapts health systems to a changing society, the US remains stuck in 75 year old arguments.

The fact that private insurance companies compensate hospitals and physicians and pay for drugs for claims submitted to Medicare always comes as a surprise to the public – and sometimes to physician colleagues. Private insurance companies are contracted as ‘fiscal intermediaries’ for state and federal governments to manage programs like Medicare and Medicaid, for the elderly and the poor. The public has the image of an office building of government bureaucrats in green eyeshades and quill pens in Washington writing checks for over a trillion dollars to health care providers. But these contracts with private insurers limit the percentage of management fees the insurance companies can charge. Allowing ‘only’ a 4% overhead charge to manage Medicare may seem restrictive compared to the up to 20% overhead allowed by the ACA that companies can charge for private plans for the ironically titled ‘medical-loss ratio’ which treats payments for medical care as a ‘loss’ to insurance companies. But because there are more than 55 million of us on Medicare and growing daily, the billions of dollars that insurance companies get yearly to manage a straightforward program with minimal complexity is not so shabby.  But, despite a great deal of research to the contrary,  the public still feels that private insurance companies with high overheads and deceptive practices deliver better quality care than government programs. The Republican Party takes advantage of that belief to denigrate Medicare and Medicaid and the ACA and threaten to turn those programs to the private sector. (Sound familiar?) Not coincidentally the Republicans receive a great deal of money from insurance companies and present no alternative to the ACA other than ‘trust the insurance companies rather than the government’.

On the Democratic side, Senator Sanders picks up on one element of the progressive agenda which started in the late 1940s with President Truman and dwells on the ‘single payer’ mantra which, like so many other sound bites, is not really understood even by those who advocate for it.[2] The problem with ‘single payer’ is that, unless there is a rapid realignment of payment toward primary care and a change from the fee-for-service, production model which dominates US health care, it really would rapidly bankrupt the system. Ontario, in the Canadian single payer system, has moved most of its primary care to a capitated model and salaried service in part because of the strains of fee-for-service care but even with that change, continues to struggle with the right governance and accountability.[3]

In many ways, the whole debate for this presidential election threatens to be a war of sound bites, ‘single payer’ on the left vs. ‘end Obamacare’ on the right with neither party having the skills or the American people having the patience to actually understand what those phrases mean. And no one is discussing the 30 million Americans – the young, the low income families, and the undocumented workers who remain without health insurance.   While ‘universal coverage’ may mean what it says, it may have an asterisk next to it saying “except the 11 million undocumented workers who live here now and who we would like to ignore”. No one wants to have a serious conversation about immigrants at any level.

Being insured yet with ‘out of pocket’ expenses:

I have a photo from a collection from the National Archives of photos taken during the 1930s that shows a general practitioner sitting at his desk with a stern look on his face and a sign that reads ‘Consultations: Cash Only’. While one might be amused by the 80 year old photo, offices and hospitals are more subtle about it now but still demand payment from the patient, even if the patient has health insurance. ‘Co-pay’ and ‘deductible’ are the terms used these days for the portion of the bill patients must pay and are among the more maddening aspects of US health economics. Patients who have to make frequent visits may have $40 charges for each visit in addition to their insurance and so patients with chronic diseases which require frequent monitoring can quickly run up bills that keep them away even though they are ‘insured’. Drug costs are another example. I am on an anticoagulant for which I had a ‘co-pay’ of $15/month for the past year but my most recent refill said I had to pay $50/month for the same drug. The pharmacist gave me no reason and the health plan gave me no warning. All insurance products carry what is termed ‘deductibles’ which is the amount of money patients must pay before the insurance actually pays. The tiers of the ACA have decreasing deductibles with increasing cost of overall insurance. Patients still roll the dice when they are ‘covered’. A recent study reported that two thirds of Americans could not cover a $500 emergency and health insurance deductibles are ‘limited’ to $6850 under the least expensive plan in the ACA market! Such reliably conservative sources as the Wall Street Journal and Forbes have written about how the cost of health care for the average family is rising, even as more people gain insurance, and this cost is creating delays in getting care or receiving appropriate preventive screening. Bankruptcy from lack of insurance is being replaced by bankruptcy from deductibles. What is going on??!!

Underlying all this is the peculiar US cultural belief that if you get something for nothing, you will both over use the service and not value it. When, in the 1980s,  Health Maintenance Organizations (HMOs) made it possible for visits for preventive care and chronic illness to be free, the use of services saw an 18 month uptick but then settled into a predictable pattern of use. Nevertheless, the country has been furiously backpedaling away from the idea of free-at-the-point-of-service care, adding co-pays and other costs to patients to try to steer them away from, for example, emergency rooms or certain medications. It reminds one of the airline industry where what appear to be inexpensive trips suddenly become expensive because of add ons like paying for bags, paying for a seat with leg room, or paying to get on early, all of which add billions of dollars of revenue that was not planned by travelers.

So there continues to be a dance that insurance companies, employers, state and federal government and citizens engage in that keeps health insurance from being simple to understand and that gives energy to the call for ‘single payer’ without having to deal with the insurance companies and their deductibles. The problem with that approach, sadly, is that the largest single component of the US Gross Domestic Product is unlikely to go through a radical change without resistance from those who stand to lose – including doctors, hospitals, Pharma and insurance companies. And if the NHS, with a long history of being widely accepted as the way to do medical care right, continues to struggle with history, economics and a changing world, one can imagine what lies ahead for the Affordable Care Act, which the Republican congress wants to undermine rather than fix.

A colleague, Paul Gordon MD MPH, a Professor of Family Medicine at the University of Arizona, is on sabbatical bicycling across the United States listening in small communities to people’s opinions and thoughts about Obamacare and writing and recording these stories. It is literally a ground level view of what is happening. (You can read Paul’s stories on his blog: ) He reports the ambivalence and lack of clarity about the ACA that shows how far the country has to go to get it right. However, the percentage of people who see the ACA as positive is climbing and the percentage of those who are negative is dropping and the lines are likely to cross with the next presidency. But that may not happen if the forces of deception, greed and world class dissembling continue to dominate US politics. Paul Starr’s opening line from his landmark book on the history of American medicine, “the dream of reason did not take power into account” summarizes what lies ahead whatever happens in the US elections.[4] Perhaps a corollary to Starr’s comment is that the dream of reason did not take mindless demagoguery into account, either.


[1] Frey JJ 3rd. Is Obamacare working? Br J Gen Pract. 2014 Jul;64(624):360-1. doi: 10.3399/bjgp14X680653.

[2] Oberlander J. The Virtues and Vices of Single-Payer Health Care. N Engl J Med.2016 Apr 14;374(15):1401-3.

[3] Marchildon GP, Hutchison B.  Primary care in Ontario, Canada: New proposals after 15 years of reform. Health Policy. 2016 Apr 23. pii: S0168-8510(16)30087-2. [Epub ahead of print]

[4] Starr P. The Social Transformation of American Medicine. 1982. p 3. Basic Book Inc. New York

The British Journal of General Practice and BJGP Open are bringing research to clinical practice. BJGP Life is where we add the debate and opinion to help ensure everyone benefits from that research.

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