Entries Tagged as 'health reform'

T-Paw: Don’t Ask Me About Pawlentycare

June 14th, 2011 at 5:59 pm 9 Comments

Tim Pawlenty has been on the offensive about Mitt Romney’s healthcare record.  But even as he derides “Obamneycare,” Pawlenty continues to delay the release of a plan to replace Obama’s healthcare reform and has said little about his own record on the issue.

The reason for this is simple: it’s not very good, especially next to Romney’s.

T-Paw and Romney both assumed office in 2003, at which point 7.4 percent of Massachusetts residents and 7.2 percent of Minnesotans lacked health insurance. Both rates were well below the national average.

By the end of 2008, the proportion of uninsured residents in Massachusetts had dropped to 2.6 percent and has since fallen to 1.9 percent. Granted, Romney left office in January 2007, but almost all of the drop can be attributed to his healthcare reform. Minnesota is a different story: in 2009, 9.1 percent of the population was uninsured, a substantial increase.

Now, T-Paw does have slight edge in ideological purity, as a smaller proportion of Minnesota residents are enrolled in some form of public healthcare and there is no individual mandate.  In 2009, 30.3 percent of the insured in Massachusetts were covered by a public plan, including Medicare, whereas the same proportion was 28.7 percent in Minnesota. However, Minnesota is more directly involved in the administration of healthcare than Massachusetts.  Minnesota owns 29 percent of all hospitals in the state, while Massachusetts owns just three percent.

The most important differences between the two former governors’ healthcare records lie in their states’ reactions to the recession.  As unemployment skyrocketed in 2008 and 2009, unemployed Minnesotans simply flooded the public healthcare rolls.  In Massachusetts, where the jobless rate reached an even higher peak (9.1 percent to 8.9 percent), employers actually covered an increasing proportion of the insured (66 percent-67 percent).  Romney’s system actually deflected some of the costs of covering the newly insured away from the government while continuing to extend coverage.

What did Pawlenty do in Minnesota? Well, as more Minnesotans lost their jobs and the associated employer-provided healthcare, they became a burden on the state budget. So T-Paw simply ended a low-income healthcare support program.  After a prolonged battle with the state legislature, Pawlenty eventually signed a bill reinstating a stripped-down version of the program, but this approach revealed his overall healthcare strategy.

Romney is right to worry about his reform being linked to Obamacare, but he should not be bashful about his record on coverage and cost-control. Romney enacted a system that allowed unemployment-stricken Massachusetts to maintain near-universal coverage without busting the state budget. T-Paw allowed a wasteful status quo to persist until it eventually reached unsustainable costs and he was forced to cut instead of reform.

If Republican voters want a President with a credible replacement for Obamacare, they would be wise to vote for record, not rhetoric.

Sweden’s Health Care Pays Off

David Frum June 10th, 2011 at 11:12 am 29 Comments

More casual Swedish empiricism:

The people of this industrial town look much better cared for than their US or UK counterparts. I haven’t seen a single obese person in 24 hours of walking and running through this small town. Some of the young people wear tattoos, but none have slashed and studded themselves with the piercings and disfigurements you see on British working class youth. Nobody seems to have the idea of using clothing to assert membership in some subculture, or to stand out from the crowd, or even to seem alluring or sexy by local norms. The girls’ clothing is as formless and drably colored as the boys’. The teenage girls wear the same easy-care hairstyles as the grown women.

Lots of kids, lots of strollers, not infrequently pushed by men, but almost always pushed by people who look older and grayer than the stroller-pushers in an American industrial town would be.

On the verandah outside the senior citizens center, the old people do not push oxygen tanks or support their bulk on motor scooters.

Consumer money visibly appears to be lavished upon cars, which are newer and larger and more numerous than you’d see in an industrial town in southern Europe.

What Swedes Really Think About Their Health Care

David Frum June 10th, 2011 at 7:55 am Updated38 Comments

The audience at the conference is about half Swedish, half not. The Swedish attendees are as you would expect drawn from the more elite strata of Swedish social life. Interestingly, when asked about the Swedish healthcare system, they express generally positive views – with specific comments that sound very similar to what equivalently positioned Canadians would say about Canada.

Summary:

  • if a Swede gets very sick, he or she can expect a very high degree of care.
  • everyday care (the strep throats and twisted ankles that send parents to the pediatrician twice a year) is done adequately, if with more waiting and fewer prescriptions than affluent Americans would expect
  • the real gap in the system is the care of the chronic ailments of older age: delays for hip replacements, eye surgery, etc.

But even affluent Swedes of mostly right-of-center views find it shocking that a society could abandon a seventh of its population with no guarantee of care at all. And the thought of spending 17% of GDP to buy such leaky coverage seems to them just utterly irrational.

Swedish politics are shifting very subtly to the right. The country has what here counts as a conservative government, with avowed intentions of opening more space for private initiative, lowering taxes, and decentralizing.


UPDATE:

An answer to commenters:

Since 2008, I’ve posted numerous statements of the reasons that have led me to revise some of the opinions I held 20 years ago, for example here and here.

Is it really too much to ask commenters to do a 5-minute Google search before complaining that I have offered no such explanations?

Posted at 10:49am

The Right’s Coming Romneycare Defense

David Frum June 2nd, 2011 at 9:00 am 82 Comments

Here’s an interesting exchange: NRO’s Kathryn Lopez and radio host Hugh Hewitt walking back from their ardent support for Mitt Romney of 2008.

LOPEZ: Is Romney the best man in the field?

HEWITT: There are lots of good men (and soon to be at least one woman) in the field. At this point it seems clear to me that Governor Romney is the most electable, though Governor Pawlenty is very close on that scale.

On the other hand, if Romney does prevail, give Hewitt credit for being among the first to articulate the rationalization that will allow talk radio to swing back into line behind Romney next year:

LOPEZ: Can Romney overcome what is conventionally, universally considered his health-care problem?

HEWITT: Yes. I gave a speech on this to the Federalist Society earlier this year, emphasizing the core values of federalism and state sovereignty, and I expect more and more conservatives as they focus on the race will discount Team Obama’s attempt to confuse the Massachusetts plan and Obamacare.

LOPEZ: Is it unfair to consider it the precursor to Obamacare?

HEWITT: Yes, but that is a powerful narrative for Team Obama to spin and their friends in the MSM have picked it up. Among the many huge differences: The Massachusetts plan was constitutional and Obamacare isn’t. The Massachusetts plan was a negotiated compromise between two branches and two parties while Obamacare was a one-party jam down. Obamacare raised taxes and cut benefits massively and Massachusetts care did neither. The list goes on and on.

Romney: No Apologies For Romneycare

May 12th, 2011 at 2:52 pm 64 Comments

Here is a link to Romney’s power point slide.

Here is where he defends the mandate:

For some, Romney’s ability to defend the mandate with a power point slide is either a great sign of his business sense, or just another reason to dismiss him as a technocrat who doesn’t view the world with a conservative ideological lens.

2:53pm:

Romney wanted the majority of his speech to focus on his plan to repeal the Obama healthcare law, but he knows that most commentators are watching this speech to see how he defends his mandate. He ended up defending the Massachusetts mandate passionately. Some would say he gave a stronger defense of why mandates work then Obama ever did for his own healthcare plan.

The problem Romney faces is that conservatives believe that the individual mandate is an unconstitutional infringement of liberty. Thus, the Romney solution to provide affordable healthcare in Massachusetts is thus:

-liberty killing

and

-and a template for Obamacare.

The Romney’s defense had several parts. While they made logical sense. They will likely not serve him well in the GOP primary.

1. Romney argues that since it’s a state-level policy, then a mandate in Massachusetts is ok. By this logic, President Romney would be ok if Vermont embraced single-payer, and a more conservative state decided to give no healthcare.

2. Romney also defended the mechanisms of the mandate itself. In this part of the speech, Romney clearly understood why a mandate makes technocratic sense. He understands the free rider problem that the mandate is meant to defeat.

3. Romney also tried to play down the mandate’s importance to his overall plan. He argued that the mandate didn’t really affect that many people in Massachusetts, arguing that 94% of the population was already insured so it was only meant to help 6%.

4. Unlike the Wall Street Journal, Romney thinks that 6% of people without insurance is a problem! “6% sounds small, but it is a half a million people.” Romney noted that being without insurance is “a frightening experience”.

5. And Romney ultimately will not apologize for providing insurance. He is aware that “that explanation is not going to satisfy everybody”.

And the ultimate reason he won’t apologize? “It wouldn’t be honest. I in fact did what I think was right for the people of my state.”

He later reiterates this during the Q&A session: “Am I proud of the fact that we did the best for our people and got them insured? Absolutely”

2:44pm:

Romney says he will introduce his own Medicare plan “but it wont be identical” to the Ryan plan.

This is big and counts as news. It means that Romney will not be running on the GOP budget.

2:30pm:

Romney is putting the issues with the Mandate front and center. I’ll post my extended notes on this soon, but the short preview is this: it won’t satisfy his critics, but at least Romney defends his mandate.

2:25pm:

It’s starting late, but Romney has begun.

A few quick notes: this is a presentation with power point slides. Not a speech with flags like his “Faith in America” speech.

2:06pm:

While we wait for the speech to start. CNN has live feed here. C-Span is also supposed to be carrying the speech but it hasn’t started yet.

—-

At 2pm ET today, Mitt Romney will give a speech about healthcare at the University of Michigan. Healthcare has been a millstone around Romney’s neck since his signature achievement as governor of Massachusetts: legislating universal coverage for all citizens by having an individual mandate to compel the purchase of insurance.  This policy is also at the center of Obama’s own healthcare law and one which Republicans have decided is an unconstitutional infringement of liberty. The challenge facing Romney is clear, is there anything he can say to put this issue to rest?

Romney has given various answers when asked about the similarities between his healthcare law and the president’s. When asked about it at the Republican Jewish Coalition’s meeting in Las Vegas, Romney said that if the president’s and his healthcare policies were so similar, then “why didn’t you [Obama] call me? Why didn’t you ask what was wrong? Why didn’t you ask if this was an experiment, what worked and what didn’t?”

However as we’ve noted at FrumForum, Romney himself hasn’t been clear about what has and has not worked with his own plan. Romney is certainly trying hard to convince Republicans that he is with them on the healthcare issue and will say that he thinks the law is unconstitutional. But Romney still defends what he did in Massachusetts. This contrasts with Pawlenty who is begging for forgiveness from the GOP electorate for his old support for cap-and-trade.

Romney has offered a preview of the health reform proposals he will run on in USA Today. If his speech stays close to the material in the op-ed, then we might get a lot of ideas on what Romney wants to do going forward, but few apologies for how he handled healthcare in Massachusetts. FrumForum will track the speech to see how Romney makes his case.

Follow Noah on Twitter: @noahkgreen


A Health Care Race the U.S. Shouldn’t Win

April 30th, 2011 at 11:20 am 12 Comments

A new study by the Kaiser Family Foundation comparing U.S. healthcare costs with the rest of the world is providing ammunition to both sides in the health reform debate.

The headline from The Hill’s report highlights how the study is being reported in the press:

Report: U.S. healthcare costs growing faster than elsewhere

The initial reaction by many is likely to be that the blame lies with the insurance companies and their outrageous profits. Wrong. The major rate of growth in costs is in those in the Medicare system over the age of 75 with an increase 8 to 12 times greater than those aged 50-64 as found in earlier studies by the National Bureau of Economic Research.

It’s true that private health insurance premiums have risen at essentially the same rate as the growth in total national health care expenditures.  The problem though is not exclusively in private or employer sponsored insurance but is attributable to all elements of the U.S. healthcare system, generic and particularly to Medicare. This point is emphasized by the fact that public spending on healthcare in the U.S. rose faster as a percent of GDP than in any other developed country according to OECD data.

One of the key talking points for the left on Obamacare is that is preserves Medicare, sovaldi supposedly unlike the Ryan plan.  These data points though are really bad news, as preserving “Medicare as we know it” is unsustainable.

To make matters worse for the single payer gang, the percent rate of growth in healthcare costs in Spain, Belgium, Sweden, The Netherlands, and Great Britain were all greater than in the U.S. Of course, we start from a dramatically higher baseline, mostly attributable to much higher prices in the U.S. Nonetheless, simply adopting a government-run health care system didn’t solve the problem in those five nations.

Certainly, the published assessment of the data is always open to further analysis. The Hill’s headline that the growth of costs in the U.S. is greater than any other country is totally predictable given our much higher baseline costs. This is the power of compound interest: If you have a higher baseline, equal per cent increases compared to other nations will lead to ever higher absolute dollar cost increases. Moreover, these data require complex adjustments for currency exchange issues as well as the underlying growth rate of the entire economy in each nation.

However, regardless of how one approaches health care reform the study makes one thing clear: cost control has to be addressed.


Cut the Bloat From Obamacare’s Insurance Markets

April 26th, 2011 at 1:26 pm 9 Comments

For some, much of everything in the Affordable Care Act – referred to as Obamacare – is problematic.

My friend and colleague Paul Howard is hardly a fan of the President’s efforts, and has been sharply critical of the final legislation. Paul, though, has done us a favor in his ongoing analysis of American health care: he’s looked at the post-passage landscape while acknowledging that there are deep and significant problems with health care in the United States to begin with.

Those deep and significant problems include the individual insurance market in many states. New York, where Paul lives and writes, is a case in point. If you are not covered by your employer, the options for health insurance are few and far between – and feverishly expensive. Part of the problem, obviously, is the way in which health insurance is organized; part of the problem is the clunky reforms New York State has experimented with over the past decade and a half.

So dire is the situation that, in New York City, tens of thousands have joined the Freelancers Union, which allows the self-employed to essentially opt out of the individual market, giving them more choices.

For the record, New York small businesses may be spared some of the worst regulations those in the individual market face, but nonetheless are subjected to incredible administrative costs (some estimates suggest as much as 20 cents on the health insurance dollar goes to administration).

Obamacare calls for health-insurance exchanges to be established in 50 states by 2014, allowing individuals and small businesses to choose from competing plans in one state-wide “marketplace” of insurance. The idea itself is clunky – a last minute compromise that saw the original idea (a national exchange fashioned after the insurance that federal employees have) replaced with state-based exchanges.

Opponents of Obamacare have been fiercely critical of these exchanges, suggesting that they will lead to more bureaucracy, more regulations, and more subsidies, without fundamentally increasing options. States like Florida have decided not to establish the exchanges (and thus forgoing the federal dollars that come with participation).

Paul takes a more measured approach. In an excellent new paper, “Building a Market-Based Health-Insurance Exchange in New York,” he weighs the opportunities and pitfalls of such exchanges.

He considers the state-based health insurance exchanges already in existence. Yes, of course, that includes the Massachusetts Connector – the widely-known centerpiece of the 2006 health-reform legislation forged by Massachusetts’s then-governor Mitt Romney, a Republican, and the Democrat-controlled state legislature. It also includes, though, the exchange established in Utah.

The two experiments could hardly be more different. Massachusetts is rich in regulations and cost; the entire Utah exchange is overseen by just two state employees and functions something like a Hotels.com for insurance options.

The Affordable Care Act gives states some flexibility and much in the way of subsidies. Paul closes with some recommendations for New York as it pulls together its exchange.

A summary:

Open Competition among All Qualifying Health Plans. The exchange should primarily be a clearinghouse for insurance competition… As in the case of Medicare Part D and the FEHBP, flexibility in insurance design is critical to reducing health-insurance costs to taxpayers and consumers. The state should also resist mandating additional essential benefits for exchange plans.

Flexibility in Insurance Design. Policymakers should reform regulations… as needed to allow greater variation in co-pays and deductibles—including allowing HSAs and other high-deductible plans to be sold outside the exchange. They should also allow more limited benefit plans to be sold, allowing consumers to find more affordable coverage options.

Affordable Insurance Options for Younger and Healthier Enrollees. Although the ACA allows New York to maintain its current pure community-rating standards, this regulation is one reason that the state’s individual insurance market has become unaffordable for many uninsured individuals and small businesses. By expanding the state’s age-banding rules to the ACA allowed 3-1 premium ratio (a reform that would require legislative action), many more affordable policies would become available inside and outside of the state’s insurance exchange.

Freedom from Political Influence. The exchange should not have responsibility for reviewing the reasonableness of plan rates or for blocking exchange entry to otherwise qualified health plans.

Defined Contribution Plans for Small Businesses. A defined contribution option (as in the Utah and HealthPass exchanges) for small businesses, combined with a premium aggregator function, should help many more small businesses and their employees find affordable health-insurance options. To save on exchange implementation and operation costs, the state should consider designating one or more private regional exchanges (such as HealthPass) as the state’s small-group health-exchange option.

Paul’s paper is focused on New York, but his ideas would be sound in other states, whether or not Obamacare is implemented or repealed in the coming years.


What Medicare’s Boss Can Learn from Ryan

April 26th, 2011 at 12:23 pm 11 Comments

You have to give the administration and congressional Democrats credit for talking point consistency. They’ve hammered away at one message: “Paul Ryan will kill seniors and the poor with a defined Medicare and Medicaid benefit plan.”

Don Berwick, Administrator for the Centers for Medicare and Medicaid Services jumped into the fray yesterday as well.  As Politico reported:

The man Republicans have derided as the “rationer-in-chief” charges that Republicans’ own budget proposals would end up rationing care to millions of Americans on Medicare and Medicaid.

‘It is paradoxical really that with all this talk of rationing, the proposal we hear about how to fix American health care is to take it away from people. That’s from the very people who are crying rationing,’ Don Berwick, the administrator of CMS, said in a wide-ranging interview with Politico. ‘If you look at the proposed withdrawals of support to Medicare beneficiaries and Medicaid, it’s withholding care from the people who need the care. You tell me what that is?’

But let’s compare the two approaches in a bit more detail. As reported in Politico, “Obama’s budget proposal calls for $480 billion in savings from Medicare and Medicaid through 2023 and an additional $1 trillion in savings in the following decade.” How this occurs is unclear but Dr. Berwick points to eliminating waste, fraud, and abuse to do the job. Right

Ryan’s plan has been pretty well demagogued, including by Dr. Berwick above, but actually calls for growth in Medicare and Medicaid spending to be capped at average costs in 2012 and then allowed to grow at the rate of the consumer price index. To claim that Ryan calls for withdrawal of support for Medicare and Medicaid is just plain wrong and quite surprising coming from such an eminent individual as Dr. Berwick. I guess this is the face of partisanship.

Medicare is bankrupting the country. It doesn’t matter whether the polls show the public not wanting any changes in Medicare. It doesn’t matter whether Republicans or Democrats win or lose the next election. Medicare’s bankruptcy is coming and the only way to avoid it is to spend less — a lot less. The demagogues may win this round but in the end, the system will either radically change or completely collapse.

The reason Ryan’s plan calls for the lower percent of GDP spent on healthcare in 2050 is that he proposes slowing the growth of Medicare from a 6-7% increase each year to an increase that tracks CPI while at the same time projecting quicker economic growth.

Moreover, Ryan counts on health insurance companies to manage the system and control utilization. The current government plan calls for a central Independent Payment Advisory Board (IPAB) that will decide payments for healthcare and approve use of various programs. The proof that this approach will work simply doesn’t exist. Moreover, even Democrats in Congress are very uncomfortable with the idea.

Many have been outraged that health insurance companies would even have a role in the new system much less actually administer the whole thing. The typical meme here is that the insurance companies bleed the system, make too much profit, are too inefficient and too intrusive.

You can try to figure out how to reduce costs in a central office in Washington or you can simply give individuals a fixed amount of support, allow them to seek out the best deals for how to spend that money, and shop around for arrangements to maximize the value they receive. Ryan understands that the health insurance companies are actually the best means of implementing this market based approach. Take for example United Healthcare Group’s, recent study: Federal Health Care Cost Containment –How in Practice Can it be Done? Options with a real world track record of success.

This company, the largest health care insurer has actually achieved on a broad scale involving many patients and hundreds of thousands of physicians many of the hoped for reforms Dr. Berwick’s previous project, The Institute for Healthcare Improvement, sought to accomplish on a much smaller scale. United Healthcare makes a convincing case that they could actually accomplish the $540 billion dollars in savings of federal health care expenditures over the next decade if the programs they already have in place could be implemented widely in Medicare.

Dr. Berwick advocates an incremental approach to Medicare reform:

He pointed to health systems that are making improvements in readmission rates or prenatal care, such as Denver Health and Parkland Health and Hospital in Dallas. The challenge for CMS, he said, is to learn from successful programs and expand them nationally.

His approach, to have the federal agency enforce a nationwide approach to care, is a fantasy. Interestingly, he points to industry to model the proper approach to healthcare:

We afford to do it the way every other industry has done it, doing things right in the first place and by removing waste from products and services and reinvesting the harvest of smart waste reduction.

Here he’s correct. Industry can manage this sort of thing. Not the government. Just compare the Postal Service with FedEx.


Mitt Romney’s Achilles Heel

David Frum April 21st, 2011 at 10:27 am 47 Comments

The Onion identifies it:

“Every day I am haunted by the fact that I gave impoverished Massachusetts citizens a chance to receive health care,” Romney told reporters Wednesday, adding that he feels ashamed whenever he looks back at how he forged bipartisan support to help uninsured Americans afford medicine to cure their illnesses. “I’m only human, and I’ve made mistakes. None bigger, of course, than helping cancer patients receive chemotherapy treatments and making sure that those suffering from pediatric AIDS could obtain medications, but that’s my cross to bear.”

“My hope is that Republican voters will one day forgive me for making it easier for sick people—especially low-income sick people—to go to the hospital and see a doctor,” Romney added. “It was wrong, and I’m sorry.”

According to Romney, if he could do things over again, he would do everything he could to make certain that uninsured individuals got sicker and sicker until they died.


The Health Cost Fix Obama Won’t Accept

April 21st, 2011 at 7:31 am 20 Comments

The Patient Protection and Affordable Care Act (PPACA) — Obamacare–  is coming under new attacks as the constitutionality of the individual mandate nears the Supreme Court. In particular, there are new questions about the president’s preferred cost control mechanisms. Yet, the one possible solution for the president’s health cost worries is still off the table.

The new criticism has focused on two particular mechanisms from the PPACA: the Independent Payment Advisory Board (IPAB) — the group affectionately known as the “death panel” — and the Accountable Care Organizations (ACO). (It’s imperative that any complex government program has an array of acronyms, preferably three letter ones, or TLA’s.)

The President has recently proposed that the IPPB be expanded and empowered to determine the payment for and nature of medical care provided to Medicare recipients. This board would have incredible and essentially unregulated power and require a supermajority of Congress to overturn its mandates.

Democrats in Congress have objected to its independence and lack of accountability to the electorate. Republicans have objected to the overwhelming likelihood that this group will be the implementers of rationing and would look to control the costs of healthcare through price controls (which never work). Moreover, the claim that this unelected group would be immune to political pressure is another example of the triumph of hope over reality.

ACOs, the other cost control proposal, are described in the health care bill as “groups of providers of services and suppliers meeting criteria specified by the Secretary [of Health and Human Services who] work together to manage and coordinate care for Medicare fee-for-service beneficiaries.”  The bill’s language goes on to describe the financial hope that “ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings.” Previously, the ACOs were pretty much universally praised but lately important deficiencies have become more widely noted.

First, as I recently pointed out, demonstration projects conducted as preludes to ACOs were praised by Dr. Donald Berwick head of CMS (Centers for Medicare and Medicaid Services) as proof of cost-saving success.  In fact, analysis from Robert Berenson of the Urban Institute shows that there were no real savings in the entire demonstration project, merely more clever data  and diagnostic coding manipulation.

Furthermore, as pointed out by Michael Millenson writing in the Kaiser Health News, the new rules CMS is imposing on the ACOs make it almost impossible that the program will succeed. Participants will be forced to report on 65 various quality measures, get approval for any marketing materials, follow highly complex risk adjustment schemes (to prove that the sick patients are really sick), and have payment plans that may require the Madoff backroom to keep track of it all.  The organizational complexities imposed by the governmental bureaucracy will overwhelm the model, a problem which still undercuts many aspects of Obamacare.

ACOs have also come under attack from the right. Rita E. Numerof of the Heritage Foundation draws attention to more deficiencies: First, there’s no component that empowers consumers to be stakeholders in their own care. In fact, patients may not even know they’ve been assigned to an ACO for their care and that they may go to whichever physician or hospital they like. They certainly won’t have an economic stake in choosing one delivery group over another. It’s the lack of market discipline applied to healthcare that increases complexity and reduces the likelihood of efficiency.

Second, the current ACO model doesn’t really encourage provider accountability since it maintains the fee for service payment system. The impetus to be efficient is the possibility of a bonus later, rather than a true financial risk although risk may be incorporated into the payment system at a later date.

Finally, ACOs will require a highly sophisticated organization with costly infrastructure (for example, electronic health records). This feature will favor very large groups.  Numerof fears that ACOs could actually create an unfair competitive advantage for large organizations which could lead to a consolidation of market power in these groups and hence further drive up health care costs.

In case these three observers aren’t sufficiently intellectually or politically pure, John Kastor, a professor of Medicine at the University of Maryland writing in the New England Journal of Medicine also has doubts that academic medical centers — the dominant health care systems in many if not most urban centers — will succeed as ACOs because of many of the issues cited above and the long-standing culture of independence that characterizes the American medical workforce. There aren’t enough economic incentives in the ACO model as envisioned by Secretary Sibelius to overcome these cultural barriers.

The secret that dare not be discussed by the administration is that current large, managed care organizations are really the enterprises that could monitor and administer ACO-like models. In fact, the staff-model HMOs like the Kaiser Permanente system have already shown that they can provide less costly, high-quality care with high patient satisfaction. Such enterprises have the systems and organizational structures to manage risk.

Rather than acknowledge this reality and anger the physicians and hospitals systems that see such organizations as the “enemy”, Obama continues to vilify the insurance companies and to demean Paul Ryan’s proposal for considering the possibility that such a managed care model could work.

The president’s demagoguery of the health insurance industry may be good election year politics but it may also result in him failing to successful implement his signature program.