One Way the Affordable Care Act Went Wrong

OK, there are probably lots and lots of ways that the ACA went wrong, but since I’m not an expert at designing health care systems, I need to limit the scope some.  Also, I blame TXRed and Joseph Moore for both putting up posts about health insurance/the ACA this week.  Finally, the standard disclaimer about this being me ranting about an issue, rather than speaking on behalf of my employer, applies.

To my mind, one way the ACA went wrong, actually, the fundamental way the ACA went wrong is that it confused means and ends.  This is exactly what Joseph Moore at Yard Sale of the Mind is getting at in his post:  if you want affordable health care, you should design your means to reach that end.  The ACA, in spite of its title, seems to me more of a health insurance law, rather than a health care law, which is TXRed’s point.  Health care and health insurance are not, actually, synonymous, even though most people, including, it seems, our legislators, think it is.  Health care is what doctors and nurses do.  Health insurance is what actuaries (and their support staff, and their management, and so on) administer to help you pay for said health care.  Or at least, that’s the idea, or what I thought was the idea.  Instead, health insurance is now more about someone in another industry entirely second guessing your medical provider to decide whether or not you really need that blood test to make sure a medication you’re on isn’t killing your liver.  Just be glad they decided to pay for the medication.

I can see why health insurance regulation might have needed some adjustment.  Rather than requiring everyone to buy it, and dictating what needed to be included, it probably should have gone the other way to get insurance companies out of the doctor-patient relationship.  A while back, we found a doctor who didn’t take insurance.  Any, at all.  He was a one-man practice, so didn’t have the back office staff to file the claims.  Instead, he’d take payment (much cheaper than you’d otherwise find) and give you the receipt with the treatment code on it so you could file for reimbursement with your insurance company.  It worked great for us, since our health insurance is used to getting claims for reimbursement (usually from overseas, but the processing path is the same) rather than always being directly billed by the provider.  If we didn’t like what the doctor did, or wanted a second opinion, we could get one–we weren’t tied to the practice by an immense bureaucracy that dictated which providers were allowed and which weren’t.  Also, since we had to pay upfront and wait for reimbursement, we were careful to make sure we actually needed the check-up or treatment, rather than the doctor ordering lots of CYA procedures for legal and insurance purposes.  Fewer unnecessary procedures keeps costs down all the way around.

Getting the insurance out of the medical relationship would also force insurance companies to compete on their customer service, rather than on their network of providers.  If a company routinely turned down requests for reimbursement for legitimate and cost-effective treatments, they would quickly go out of business.  Likewise, if the company approved too many, they would go bankrupt in short order.  The remainder would have to compete based on how well they treated people when they denied a claim–do you get a cogent answer?  Is it one you can live with, even if you don’t completely agree?  Do you still feel like a valued customer?  If so, fine, you may want to keep your insurance company.  If not, there would likely be several other companies waiting to pitch their services to you.

Everyone wins, and, most of all, I suspect that the quality of care would go up, while prices for medical care went down.  You’d still have to do something for catastrophic coverage (not too hard to sort out since it’s been around for a while) and handle existing conditions (much, much harder, and I haven’t a clue how, beyond maybe niche insurance companies coming into existence that handled particular conditions, or a suite of conditions), but I’m not sure it would be much worse than what we have to deal with now.