The lobbying campaign of device makers such as the Minneapolis-based Medtronic, whose practices Brill carefully dissects, shows what healthcare sellers do when they don’t like some rule or regulation or tax. Time’s piece describes how device makers are trying to rid themselves of a 2.39 percent excise tax on medical devices called for by Obamacare. Their arguments are the usual ones—the tax would reduce sales so much that the industry would lose some 400,000 jobs, they say. The press, for the most part, has passed along the gloom and doom scenarios from device makers, who Brill calls “superstar performers in a booming medical economy,” without questioning their numbers.
Brill did question them, and found the Affordable Care Act, which imposed the tax to help fund subsidies for the uninsured, would barely hurt the industry. He cited a 2011 McKinsey report, showing that Medtronic “delivered an amazing compounded annual return of 14.95 percent to shareholders from 1990 to 2010.” If the tax were so disruptive that it would kill sales, why, Brill asks “would the industry pass it along to consumers as a price increase? It hardly has to given its profit margins.”
Flaws in Obamacare: “With Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay,” Brill asserts. That’s an important observation, and one that was brushed aside by many policymakers in the haste to pass health reform. As CJR has pointed out, the media, too, may have helped oversell what the law is to accomplish.
Brill analyzes what the law does this way: Obamacare, he says, tinkers at the edges of the system but does not address the core problem. It does improve the claims appeal process, for example, and makes some insurance terms available in plain English. While such changes are positive, he writes, “none of it is a path to bending the healthcare cost curve.” That gets to the heart of the debate over the affordability (which CJR recently addressed in an Exchange Watch piece about the efforts to set up Connecticut’s Obamacare health exchange).
Brill observed the “exchanges could raise costs, not lower them.” Indeed, three of Obamacare’s best provisions—prohibiting exclusions for preexisting conditions, ending annual and lifetime caps on coverage, and restrictions on copays for preventive care, will most likely raise insurance premiums, Brill tells readers.
Unfortunately, Brill doesn’t fully explore the affordability conundrum. Many of the people whose misery he described owned “limited benefits policies,” which don’t cover much if someone has a catastrophic illness. Obamacare eliminates such restrictions.
Yet patients could still find themselves in the same financial boat when series illness strikes. Because insurance in the state insurance exchanges, as Brill argues, may well still be expensive, consumers faced with the mandate to buy coverage are likely to choose the cheapest policies—and those are designed to cover only 60 percent of the costs. Families might still struggle to pay the remaining 40 percent. Medical bills that seem like monsters from outer space will not disappear for many Americans—even with Obamacare.
An official of a firm who helps people untangle their medical bills and negotiate with providers tells Brill that most of the firm’s clients are middle or upper-middle people with insurance. That tracks with studies by CUNY professors Steffie Woolhandler and David Himmelstein and Elizabeth Warren (now a US Senator from Massachusetts), who found it was mostly middle class people with insurance who declared medical bankruptcy. Brill’s predictions about rising premiums and rising medical costs may not change this picture.
Brill’s solutions: A big omission in Brill’s remarkable tour through the American health system is a serious critique of the doctors. Although the piece devotes a brief section to the doctors’ role in creating this mess, he gives their complicity short shrift. To bolster this notion of what he calls “over-doctoring,” Brill seems to generalize from an 89-year-old patient named Alan A., who got 33 visits in one year from 11 doctors who, according to Brill, “had nothing to do with his recovery from the heart attack or his cancer.” While noting there’s been some progress toward weaning the docs from fee-for-service payments to salaries, he doesn’t directly address the question of whether US physicians, particularly specialists, are paid too much, a subject policymakers have been reluctant, for decades, to address.
Nor does Brill discuss Congressional efforts to limit inflation in doctors’ fees through the 1997 Balanced Budget Act, and the doctors’ mostly successful efforts to thwart its mandated cuts in Medicare reimbursements. Failing to discuss the “Doc Fix” campaigns by physicians’ professional organizations leaves the impression they have no role in the high cost of care. They do.