This morning at 5 a.m. my 11 year had a bad case of croup and had trouble breathing that wouldn’t respond to all of the traditional home remedies, so we took a visit to the local ER. That trip, as experienced through the eyes of a physician who became a healthcare consumer shows why Obamacare will fail miserably. It’s biggest issue is that it has placed the world’s most expensive machine ever devised by man for delivering medical care right at the heart of the cost savings equation-the American hospital.
To understand what I mean, you first have to recognize that one of the major cost savings measures of the Affordable Care Act (ACA or Obamacare) is that the American hospital will be at the center of a new revolution in cost savings. Now, no sane person who has any experience with hospitals would ever make the mistake of confusing the American hospital with a cost savings vehicle. This is like giving a shopaholic a new credit card! Let me explain.
First, let me start by saying that I voted for Obama in 2008. Second, most Americans don’t know that the ACA places hospitals at the center of it’s cost savings measures in healthcare by creating “Medical Homes”. These are centers that will be run by hospitals that will manage all aspects of patient care. Why will this approach fail? To understand that, you have to experience the American hospital through my 5 a.m. E.R. visit.
By the time we arrived at the E.R., my son’s “seal bark” cough and stridor (unable to breathe without labored sounds) had started to resolve, but we were there, so I decided to take him to be seen. The first thing that struck me was that a one person job instead took two nurses, a respiratory therapist, and a doctor. So right away, what would have been accomplished in an outpatient office by a one doctor and maybe an assistant, was amplified by 2-3X in a hospital E.R. Then came the tests. He had no fever and and no prior medical history so it would have been obvious to any third year medical student that all he needed was a simple nebulizer. Ha! Not in the American hospital! Two different rapid screens were done (I’m sure running $200 each), one for strep and one for flu. In addition, the rapid strep was sent for culture and sensitivity (a $400 test that may tell what bacteria was growing in his throat). None of this was of course necessary, since pretty much all croup is viral and it would be extraordinary unlikely that he had a strep throat that would cause breathing problems without a high fever. They also wanted a chest x-ray, but that’s when I stepped in as a physician and said there would be no $300 chest x-ray tonight, as this kid didn’t have a pneumonia. So just in the first few minutes, what should have been a $200 office visit for a nebulizer to help him breathe was turned into a $1,000-$1,500 extravaganza. Why? The American Hospital has grown up and matured in a system where medical care is delivered to a consumer who isn’t responsible for paying the costs, as this is handled by a third party insurance carrier. Hence, getting more tests or using horribly expensive care has become the norm.
For every action there is an equal and opposite reaction. So like Newton’s third law of physics, the hospital centric ACA has had unintended side effects. One of those has been a dramatic rise in hospitals buying physician practices getting ready for round 1 of Obamacare. This has had the effect of creating mini local monopolies. Hospitals now own the physicians and can therefore set whatever prices they chose, gaining the kind of leverage over insurance company contracts that in other sectors of the economy would amount to illegal antitrust violations. This is happening because Obamacare has so many physicians running scared that working for the hospital seems like their only option. Don’t take my word for it, here’s a piece from NBC news on the topic of how the ACA is raising costs through consolidation. So not only are hospitals the most expensive places on earth to deliver care, but the ACA is forcing insurance companies to pay them more for that same overpriced and bloated care.
The upshot? Placing the American hospital at the center of a cost savings revolution is like giving a shopaholic an American Express Black card without a limit. It’s a horribly dumb idea. What we have fueled instead is an unprecedented growth in local monopolies that will dramatically increase the cost of delivering healthcare. While as a doctor it’s wonderful to see more patients with coverage and no pre-existing condition exclusions, to get there we’ve regrettably created major tectonic shifts in the system that will bring it all crumbling down in a orgy of spiraling prices. I guess the only saving grace is that at least my kid’s croup is better!