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Obamacare's payment reductions & price controls aren't the answer

To The Daily Sun,

Six years ago, BHO (Barack Hussein Obama) said, "Every single good idea to bend the cost curve and start actually reducing health care costs (is) in this bill." He projected that his version of health care reform, with the "investments" in health information technology, health care delivery and payment reforms, would translate into big cost reductions for individuals, families and businesses. The man said that the "typical" family would see a yearly $2,500 savings in their health costs.

Those family cost savings have not materialized. Even with lower than anticipated enrollment in the health insurance exchanges and the refusal of 21 states to participate in the law's Medicaid expansion, the health care cost curve is still on an trending up fueled by increases in both public and private health care spending. Obamacare's cheerleaders have allowed their exuberance to let their alligator mouths overload their hummingbird butts. Pre-implementation the ACA's advocates touted the law as "bending the cost curve down and reducing the deficit" while in the same sentence crediting it with expanding coverage to more than 94 percent of Americans. None of which turned out to be true.

Obamacare did not deliver the impossible. Courtesy of the Affordable Care Act (ACA), public spending is outpacing private spending. For 2015, the Congressional Budget Office (CBO) reports that the federal government spent a total of $936 billion on health programs, a 13 percent increase over the 2014 level. For 2015, CBO reports that Medicare spending increased almost 7 percent, the fastest rate of growth since 2007; and, over the period 2013 to 2015 they also report that Medicaid spending alone jumped by 32 percent.

Medicaid is the fastest growing component of America's welfare system. Many ACA advocates applaud the government's increasing role in American health care as an indisputably good thing ... but it does not bend the "cost curve" downward nor does it guarantee value for the dollars expended nor does it cover those it said it would.

Health-care delivery and payment reforms, value-based purchasing, pay for performance, accountable care organizations (ACOs), are among several strategies enacted in the Affordable Care Act to bend the cost curve downward. But in 2010, the CBO declared that most of these initiatives would have little if any effect on health spending, and in 2012 they completed a more detailed evaluation found limited success, and most of the "value-based" initiatives to be largely unimpressive as sources of savings. They were more effective as political rhetoric.

In operations to date, only about half of the Medicare accountable care organizations (ACOs) have yielded savings. From roughly 2003 through 2013, there was indeed a general decline in health spending. But Obamacare didn't deliver that; the economic slowdown did. Concerning the recent slowdown in Medicare spending, the CBO observed that: "... very few of the ACA's provisions had been implemented in any substantial way, making it difficult to attribute much of the slowdown to the effects of specific provisions of that law."

Looking forward the law calls for sustained payment cuts to the Medicare Advantage program. It also has scheduled some big Medicare payment reductions over the next 10 years for hospitals, nursing homes, home health agencies and even hospice care programs. The Medicare trustees report that, if these Affordable Care Act provisions are implemented, 50 percent of America's hospitals, 70 percent of the nation's nursing homes and 90 percent of the nation's home health agencies will be operating in the red... This will jeopardize seniors' access to and the quality of care.

The Affordable Care Act's payment reductions and price controls are not the right solution to the health care cost problem. They never were. Congress and the next administration will have to deal with the continuing problem of rising health care costs. They should take steps to level the playing field; harness the benefits of real market competition among plans and providers to control costs. They should also unleash genuine consumer choice to secure real value for health care dollars. It is not possible to control costs, secure better value and higher quality care through bigger bureaucracy and central planning. Our political decisions are likely to speed the deaths of many of us. Happy birthday Obamacare.

Marc Abear


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I cannot figure out where Mr. Wiles is going; English please

To The Daily Sun,

To Mr. Russ Wiles:

It's pretty obvious that you know your left from your right, but this belief that everything is based on some kind of conspiracy has clouded your sense of direction. I don't think anyone can figure out where you're going with all of your letters. English, please.

Todd Welch


  • Category: Letters
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