Fatal flaws in Obamacare: 2 important new pieces by AEI's Scott Gottlieb

In two just-published pieces, American Enterprise Institute (AEI) physician and health care expert Scott Gottlieb, MD highlights the disarray of the Affordable Care Act (commonly known as Obamacare) and explains how Obamacare's Medicare reforms are degrading the practice of medicine.

Obamacare crumbling:

  • Risk pools failing: The temporary "high risk" pools, created by Obamacare created to provide a way for those with pre-existing health conditions to get insurance immediately, are undersubscribed yet way over budget.
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  • Long-term care gone bust: The CLASS Act, which was supposed to provide consumers government-financed long-term care insurance has been abandoned, blowing an $86 billion dollar hole in Obamacare's cost estimates.
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  • Unwieldy Accountable Care Organizations (ACOs): The crown jewel of Obamacare's effort to contain healthcare costs, the creation of ACOs, is so unwieldy that major provider groups said they won't participate.
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"Obamacare isn't even in full swing, and at every turn, the program is crumbling."

Click here to read the full piece

Medicare reforms harming care:

  • Shifting financial risk leads to rationing: Obamacare's medical practice arrangements are forms of 'capitation', where doctors are paid fixed sums to care for patients. When doctors spend more money on patient care, it hurts their bottom line. As a result, subtle rationing occurs. Most patients are not aware of the options that doctors never offered them.
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  • Salaried medical employees are less productive: The premise is that once doctors are staff members of hospitals, it is easier for Medicare to regulate the institutions that employ doctors. Yet, studies show productivity declines as doctors become employees of hospitals and health systems.
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  • Capping spending decreases access: Obamacare caps Medicare spending at GDP growth + 0.5%, and empowers the Independent Payment Advisory Board (IPAB) to reduce reimbursement rates for drugs, devices and providers. Yet as Medicaid's experience shows, as reimbursement rates fall, so does patients' access to care.
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"There’s plenty wrong with the way that doctors are paid for providing medical care and the imprudent incentives that patients have to overuse it. The president’s solution is to put Medicare’s regulators more firmly in control of decisions. These schemes are already degrading the practice of medicine in America."

Click here to read the full piece

Scott Gottlieb is a practicing physician and resident fellow at the American Enterprise Institute. He was deputy commissioner of the FDA and a senior adviser at the Centers for Medicare and Medicaid Services. He is available for interviews and can be reached at [email protected]

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