Anyone afraid of big government has plenty of reasons to dislike the “Obamacare” healthcare reforms likely to become law sometime early next year. Like any massive program or policy, here however, the revisions of the American healthcare system that the House and Senate have passed will create winners and losers. The new legislation has plenty of downsides but an honest look at it from a conservative, free market perspective reveals a few bright spots too. Five that stand out follow:
1. Electronic medical records will become more widespread.
Everyone who deals with healthcare—left, center, and right—agrees that medical record keeping needs serious improvement. Nearly two decades after every other industry computerized its databases, most medical records still get kept on paper in filing cabinets. Those computer systems that do exist usually can’t exchange data. As a result, many patients fall through the cracks. Literally millions of unnecessary tests get run each year simply because nobody can find records. Drug prescription errors, likewise, kill thousands. Entities like the Department of Veterans Affairs’ system, Utah’s Intermountain Health, and Kaiser Permanente that make widespread use of electronic records tend to get better results. Dated anti-trust statutes and recalcitrant medical professionals have delayed widespread electronic medical records standard setting for too long. Along with money from the “stimulus,” however, the new healthcare laws should speed the long-overdue adoption of electronic medical records.
2. More people will pay something for medical care.
The current American medical system encourages freeloading and, in some respects, this may decline under the new laws. Plenty of people—including many who probably don’t need them—will get taxpayer subsidies under the laws. Even if the total number of people receiving explicit subsidies increases (it will), many people who don’t currently pay for medical care will find it attractive to start paying something to buy a basic insurance policy under Obamacare. (Hardly any of the new subsidies provide entirely “free” care.) As individual mandates and subsidies reduce the number of people without any insurance, hospitals and doctors have more resources to go after those individuals that still genuinely want to freeload.
3. Medicare Advantage subsidies, a form of corporate welfare, will shrink.
Since 1997, Medicare has encouraged beneficiaries to pick “private” plans through a program now called Medicare Advantage (Medicare Part C in the statute) as an alternative to “plain vanilla” Medicare. This sounds good in theory—and probably benefits some of the individual participants—but a noble experiment has turned into a corporate welfare bonanza. While they provide only minor additional benefits like (e.g. routine dental coverage), a variety of “private” taxpayer-financed plans receive larger subsidies than the “plain vanilla” Medicare. If these nominally “private” plans provided better care, then maybe one could justify this. But there’s no hard evidence that they do and some that they don’t. The current law’s numerous restrictions on private decision making—the participating providers have very limited ability to design their own benefit packages—probably lies at the root of its problems. But there’s still no excuse for the size of the subsidies. If it’s to accomplish its goals, Medicare Advantage needs an overhaul. The big subsidies need to go and, under almost any circumstances, they’ll be cut significantly.
4. More people will get health insurance away from the workplace.
Employer-based health coverage is a bad idea. It discourages anyone from taking responsibility for healthcare costs, decreases choice, and sometimes leads people to stay in jobs they’d rather leave simply to keep the benefits. New “employer mandates” in House and Senate bills seem likely to keep this broken system in place at least in the short term. But even if not a single employer decides to drop coverage, raise wages, and encourage its employees to shop for insurance in the private market, new “exchanges” and mandates will almost certainly increase the absolute number of people buying insurance on their own. Significant problems (particularly price controls) exist with the mechanisms the legislation uses to encourage private health insurance purchase, but if individuals end up getting better care and being more satisfied than those who receive care through their employers, it may result in a shift away from workplace provided care on a broader scale. And that would be a good thing.
5. Moderately sick people will be better off all-around.
The American medical system is probably the best in the world for two groups of people: the well and the very sick. Well Americans can find primary care doctors without much trouble, get all sorts of expensive tests if they feel a bit down, and do it all without a lot of waiting around or bureaucracy. They rarely pay more than a little out of pocket. Very sick Americans, on the other hand, can rely on quick access to high tech diagnostics, no waiting lists for new, high-tech treatments, and hospitals that treat them pretty well. While overall costs may be high, even those without insurance can almost always sign up for a public program (Medicare or Medicaid) or get charity care.
People with moderate problems—everything from a serious but not-life-threatening physical injuries to chronic diabetes—don’t get a very good deal under the current system. People with any sort of chronic condition often find coverage virtually unavailable in the private market. Since the hospital system focuses mostly on the well and the very sick, furthermore, people with moderate problems often get shunted aside, wait too long for necessary care, and end up with very hefty medical bills if they don’t have insurance. The changes to the healthcare system may very well hurt care for the well and very sick. At least in the short term, however, the moderately sick will probably get better care and pay less for it.