Healing Health Care

January 29th, 2017

The President is looking at unraveling the Affordable Care Act (the ACA, commonly referred to as Obamacare) and replacing it with something that is less expensive and at the same time giving citizens more options in their health care.

Less expensive is key. Since the ACA was passed in 2011, health insurance costs have soared and are heading higher still. As of last November premiums were set to rise an average of 25% in 2017, in the 39 states served by the federal market.

While many will receive subsidies to help pay that increase, subsidies will mean that the taxpayer will ultimately foot the bill. And you can be certain that some of the bill we be dropped into next year by raising the deficit.

Before going any further, it might help to consider a few simple concepts.

When this began, there were some 250 million Americans covered by some form of health insurance. When the ACA was passed, that number jumped. The goal was to reach 280 million, leaving about 10% of the citizens uninsured. Without going into whether ordering people to buy health insurance is Constitutional or ethical, someone should have seen a problem.

The problem is this: if you have a health care system providing care to 250 million, and you add 30 million to it, you have less health care per person when you are done. It doesn’t matter how you get there, you have less per person.

How bad? While the overall ratio of doctors to citizens is staying roughly the same, that trend line appears to be in part due to doctors remaining in practice longer, with more doctors practicing medicine well past age 65. However, there is a trend of more doctors entering into specialized healthcare and fewer into general practice. That translates into fewer doctors providing basic healthcare, meaning more “rationing” of doctors, and higher costs – to be met with higher insurance rates.

Perhaps this shortage can be met by expanding the role of nurses in primary health care?

Certainly, except for one minor point: the shortage of nurses is expected to reach roughly 1 million in the next 5 years, with roughly 2 million nurses in practice in the US  (the need is for roughly 3 million, measured in ‘Full Time Equivalents.’)

In short, no matter what’s happening with the efforts to unravel the mess caused by the ACA, and no matter what steps are taken to address health insurance pricing, none of that is going to matter unless we address the question of supply: the United States needs to expand the “supply” of doctors and nurses.

Practically speaking, that can’t be done in the short term except by “robbing” from someone else. Even as we sit and debate the rules for immigration, the US will need to find ways to attract more doctors and nurses to this country over the next 5 years. Options to provide incentives seem limited: a special tax category perhaps for a medical professional who moves to the US.

To address the long-term problem, any health care program needs to provide some mechanism to expand the “production” of doctors and nurses. What that means is more graduates from medical and nursing schools, but that really translates into more medical and nursing schools. Simply putting more students in any class will in the end dilute the “product.” The real solution requires more schools.

But it doesn’t end there. The other shortage is in residency programs. The residency programs need to be expanded now if we are to meet the needs of a population that will reach 400 to 450 million by 2050. The government needs to identify both incentives for new and expanded medical and nursing schools, and new residency programs, as well as eliminating institutional roadblocks to expansion. And these programs should include planning and sizing to meet the need for that future population growth so that we don’t repeat this problem in another 30 years.

Government planning and interference in health care has been at least partly responsible for the increase in costs over the past decade. The government now has an opportunity to take another look at the health care industry, and working with the industry, academia and the citizenry, chart a different course, one that actually steers us around the problems generated by previous administrations.