We will soon be heading for a medical cost fiscal cliff

Now that President Obama has won a second term, discussions about healthcare have seemingly disappeared from the public’s radar.

Big mistake – although I do understand the public’s shifting interest in the General’s sex life and, much more serious, the heartbreaking tragedy of the renewed hostilities between Israel and Gaza.

I do expect that healthcare costs will be back on the radar fairly soon as discussions about the fiscal cliff intensify – and Medicare and Medicaid costs become critical to any long-term solution of “debt and deficit.”

And over the next year, as healthcare premiums for private insurance start to rise again, the subject will become part of hallway and water-cooler conversations.

So do I think the provisions in the Affordable Care Act (ACA) will succeed in reeling in the rising costs of healthcare? Honest answer: Not really.

There are some provisions that could be helpful. One such notorious proposal is again under attack by Republicans — the Independent Payment Advisory Board. The board will be composed of 12 members representing all parts of our healthcare enterprise including doctors, patients, industry advocates, financial analysts, etc. Its charge is to monitor Medicare costs and advise how to keep them from exceeding the general inflation rate. The board is specifically prohibited from any specific attempts to ration care or restrict benefits.

But opposition politicians have falsely smeared the potential work of this board by saying it will “come between you and your doctor” in deciding what care you can get.

And the Republican majority leader in the House of Representatives, Erik Cantor of Virginia, is now leading the fight to repeal this provision of the Affordable Care Act. The House will fall in line and vote the party line so Cantor is trying to convince some Senate Democrats who are facing re-election in two years to join Senate Republicans in a repeal vote.

But, of course, President Obama will veto any such attempt – so ultimately, this is all about politics not substance. Surprise, surprise!

As you know from my earlier columns, I have reluctantly come to believe that the political process is emotionally unable to make the hard decisions that would cut unnecessary costs from American healthcare. So I do believe that it is precisely some system of outside experts that will “come between patients and doctors” that is required.

We patients have come to believe that the newest technology (drugs, devices, scans, etc.) are what we need and deserve. And the “medical-industrial complex” is constantly coming up with new technology to feed that belief.

And Congress, for obvious reasons, is incapable of making the necessary hard decisions about what is really needed.

So my sad prediction is that if we don’t make these hard decisions, we will be heading for a medical cost “fiscal cliff” within 5 to 10 years – at which point the rest of my prediction is that the federal government would hold an emergency meeting in Washington, much like the banking crisis, and vote to expand Medicare to cover all Americans in order to get the leaking financial pipeline in one place (a single payer system).

Timothy Johnson trained as an emergency room physician but switched careers in 1984 when he joined ABC News as its first full time Medical Editor. Although he retired from that role in 2010, he continues as Senior Medical Contributor.  He blogs at Timothy Johnson, MD: On Health.

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  • John Henry

    Single payer is not the answer when the recipient of the services rarely knows or cares about the cost.

    Repealing the cap on balance billing imposed in 1986, which unrealistically imposed price controls regardless the true costs of services would be a fair and reasonable start. If the administration wants to relatively reward cognitive activity, they can more robustly pay for 99xxx coded services.

    Generally, when things can’t go on, they don’t. We are there about now. If the 27 or 30 percent automatic cuts go through as they are scheduled, it will be all over for part B but the shouting.

  • JPedersenB

    Yes, we are indeed very close to that cliff! A few things that would help but that are very unpopular are: 1. Reduce executive compensation in the hospitals and insurance companies.
    2. Suspend the building programs for hospitals until we see what is actually needed.
    3. Reveal costs before services are rendered.
    4. Reform malpractice.
    5. As patients, take greater responsibility for our own health.

  • cynholt

    Medicare for All. The sooner the better. What politicians are doing
    now is playing off one interest against another – the drug monopoly
    cartel against the insurance monopoly cartel against the AMA against
    struggling small businesses and even against big corporations. We are
    all disgusted with the health “care” industry. No other country on the
    planet allows health care to be profiteered like this. We have
    politicians to thank for this mess.

    • John Henry

      “Medicare for all” will not address over-consumption, and access will suffer–badly–if price controls are imposed. Beneficiaries will have to be restricted, by age, by diagnosis and by fiat to control utilization, especially in the costly late life consumption. And there will be no borrowing our way with this. Get ready for European-style taxation to support your European-style social welfare benefits: 18-20% VAT, fuel taxes that raise gasoline to $6.00 per gallon, 60+% marginal tax rates in real “middle class” income ranges–not the firy-tale make-believe world where $250K/yr is “middle class.”

      • http://onhealthtech.blogspot.com Margalit Gur-Arie

        People are paying insurance premiums today, whether directly or partially through an employer in lieu of wages, that if paid in taxes will address the problem once and and for all. The only folks that stand to suffer-badly are those third party and administrative “stakeholders” who are enriching themselves within this perverse system.
        There are plenty of European models where there are no draconian restrictions, no lack of access and no lack of quality. One of those should be adaptable to work fine here as well.

  • http://cognovant.com/ W Joseph Ketcherside, MD

    Health care is the next economic bubble. The costs are becoming unsustainable. When the bubble bursts, it will make the last financial crisis look like a burp. The massive reforms to the entire market that are needed – cost transparency, quality transparency, individual responsibility – are so opposed by one interest group or another that the only way out will be complete collapse.