“What Has NOT Changed” – A Critique of the Affordable Care Act: John P. Geyman, MD

Last Updated on April 17, 2022 by Lee Burnett, DO, FAAFP

We gratefully acknowledge the sponsorship of the Presbyterian Intercommunity Hospital of Whittier, California for funding the transcription and editing of this section of the Proceedings of the Twenty-Fourth National Conference on Primary Health Care Access:

The following transcription is of the second plenary session of the 24th National Conference on Primary Health Care Access, held April 8, 2013, at the Grand Hyatt Kaua’i. This session follows 24PHCA “What Has Changed” – Sundwall Keynote Reactor (Wilke) and Q/A Session.

Ana Bejinez-Eastman, MD (Moderator) [Dr. Bejinez-Eastman is a Senior Fellow of the National Conferences on Primary Health Care Access]. Our next speaker is Dr. John Geyman; whom we’ve been anxiously awaiting, and Dr. Chuck North who will react, as usual.

John Geyman, MD, the University of Washington Emeritus [Dr. Geyman is a Senior Fellow of the National Conferences]:  Thank you it’s great to be here. This is always a special meeting. And as Kevin Haughton indicated at the session’s start, change is all around us.

Where is primary care going? Where is the health care system going?

Change includes all of our personal lives. My wife Gene died a year and a half ago. I worked through that.

Emily Reed, who is here in the audience, will be my new wife, starting next month. We’ve navigated that. We have a new chapter. And we need a new chapter in healthcare.

I tend to focus on the basics. I tend to ask pretty basic questions. Then I tend to track them.  I’ve been out of practice now since, golly, 1997 on San Juan Island in Washington’s Puget Sound. What I do mostly is ask the basic questions and track where we’re going.

In this talk, which I first gave at the University of Missouri Columbia several weeks ago, for Dr. Jack Colwill’s department, I asked the basic question of the Affordable Care Act [ACA], is it going to lead us somewhere we really want to go, or not? Well, we’ll get started!

These are the big four problems that health care reform has to address – uncontrolled healthcare costs, unaffordability, restricted access, and variable quality of care. Everyone here knows them.

As David Sundwall already has indicated – and I agree with him – there’s no real cost control in the ACA [“What Has Changed?”: Health Reform in the U. S. A. – David N. Sundwall, MD]. In Massachusetts, the state in which ACA was modeled, health care costs are a big problem.

ACA has a few good points. It will extend insurance. We bicker about just how many people coverage will be extended to, but maybe 32 million more by 2019. That’s a long way from now. We’ll subsidize all that.

Parents will be able to keep their kids on their insurance until 26 – that’s good!

There is an expansion of Medicaid for 16 million people, but what a battleground that is. We will see underfunded Medicaid all over the country, with all kinds of variations by state as to what coverage is.

Yes, there is some new funding for community health centers and for a few – just a few – preventative services without any cost-sharing imposed. There are some very limited reforms in the health insurance industry. Then there is PCORI, the Patient-Centered Outcomes Research Institute, which hasn’t really gotten started yet. But these things are there on paper.

But I think we have to say, now that we are three years after the bill passed, that corporate stakeholders hijacked the whole political process to protect their markets.

That market failure wasn’t recognized as the wellspring of system problems. The essential problem is the health insurance industry is failing. It lacks enough value to justify its bailout by the federal government

We had a middle-of-the-road approach by Democrats and the Obama Administration. There has been a total unwillingness by political leaders, including in our own medical organizations, to admit that the incrementalism of the past 30 or 40 years hasn’t worked. There was flawed framing from the start of the healthcare debate. I agree with David Sundwall that the rhetoric on both sides is just absurd.

Here’s why I think the bill won’t work; I really like Herb Stein’s Law “If something cannot go on forever, it’s going to stop.”

The health costs are what are bankrupting us. “Incrementalism” hasn’t contained costs in the past at all. Why do we expect it to do so this time?

Private insurers are on a death march without subsidies. ACA will bail them out for a little while.

Employer-sponsored insurance continues to decline. It now accounts for less than 60% of those insured and is trending downwards towards 50%  Many employers are looking at self-insuring, which exempts them from the provisions of the ACA, but they’ll cover less and less. They’ll cut out retirees, of course. Meanwhile, the health care “safety net” gets a little more tattered all the time.

Let’s consider the basic “20-80 rule”. Twenty percent of the population accounts for 80% of healthcare spending.

The healthier half of the population spends just three percent of total spending, and the sickest five percent account for nearly half of all spending.

Of course, the insurance industry has all kinds of games, and will continue to, including through the “accountable care organizations”. They will try to enroll the healthiest parts of the population and offload sicker patients to the public sector.

Here’s why the ACA makes no sense to me. There are no cost or price controls.

The supposed reason for mandatory insurance is to subsidize the high users of health care services with the revenues received from persons.

However, the 20-80 rule will make it impossible to cover the costs of providing care to the highest cost 20% of the population without outsized shifts in costs to the healthy or big increases in government subsidies to the plans, or both.

As these higher costs materialize, driving insurance premiums higher, there will be Increased numbers of underinsured and uninsured.

There are studies that have demonstrated that compared with traditional Medicare, which simply reimburses providers for covered services, the “for-profit” insurance plans have less efficiency and less quality. They also increase waste and bureaucracy, both within the insurance companies and the government agencies that oversee them.

The Increasing consolidation of the insurance industry will further eliminate the choice of providers and access. The total impact of Obamacare will be to further erode the safety net.

Some of the architects of the ACA and related approaches to health care reform assume and try to make us believe that information technology will fix everything.

I was at the University of Wisconsin in September, where Epic Systems Corporation, the leader in market share for electronic health records has a big campus right there in Verona, nearby Madison. Three hospitals in Madison – Children’s Hospital, University Hospital, and a private hospital – all use the Epic EHR, customized to each place. If you’re a doc covering two or three hospitals, you have a different EHR for each hospital, because those three systems don’t talk to each other! That’s how it works, even in Madison, Wisconsin.

Disease management, consumer-directed care, Pay for Performance, Accountable Care Organizations, managed care, risk management. Even though several of these ideas have been implemented, some in many different places, none of them have proven to contain health care costs.

We’re going to have more consolidation of the corporate stakeholders. This will lead to surging prices and profit.

Let me digress to show one of the ways that this will happen. There is a Catholic hospital in the nearby town of Bellingham, Washington; which is now the only hospital in the region. The Peace Health System, which ranges from Oregon to Southeast Alaska, now operates that hospital. Peace Health put in a rural, critical access hospital with ten beds that have been operating for six months. We probably don’t need such a service on the island, which is only 10 miles by 20 miles.

As an example of the care they have provided, a patient came into their emergency room with a little bit of abdominal distress. The doc said, “I don’t think you have anything serious here, but let’s get a CT scan to make sure.” It’s the first time we’ve had a CT scanner on the island.

After a three hours wait and a bill for $5,800, the patient has a CT scan. The patient is sent home, with the instructions to take some fluids, and is told that no follow-up appointment is necessary. I mean come on! But this is happening all over!

So inflation of healthcare costs continues. That is what is going to break our system, Inadequate access, the frayed safety net, and subsidized underinsurance will all contribute to uncontrolled costs.

Wait until we see what really is going to get covered and not covered through these exchanges. If you think we have a huge bureaucracy now, there is much more to come – all totally unaccountable and unsustainable.

We are already seeing insurance premiums going up all over.

Facility fees for hospital system services are being tacked onto medical bills – anything connected in a clinic facility, even a mile or two away, becomes part of the facility fee for the hospital system.

it chains are putting pressure on physicians to admit patients. There is both overdiagnosis, and overtreatment, especially imaging for every symptom like low back pain.

We will see a lot of “out of network prices”. There will be huge, insurer surcharges for exchanges, The exchanges are already trying to protect themselves from those charges.

So we will continue to have access problems, with 30-34 million uninsured, and an unwillingness of docs to see Medicare and Medicaid patients. That statistic will be going up.

There will be a shortfall of 30,000 primary care docs by 2015, with increasing cost-sharing, and decreasing affordability.

Eight million are expected to lose employer-sponsored insurance [ESI], Increasing a shift to part-time workers, because, under ACA, below a certain percentage of full-time employees, employers don’t have to provide insurance. That’s a big trend.

There are no federal subsidies when ESI is unaffordable for family members. There is also a recent trend of employers choosing to self-insure so as to be exempted from the law.

There is an epidemic of underinsurance. Only 27 million instead of 32-34 million projected are newly insured with ACA.

There are low actuarial values in those who are newly insured. The revenues from this group are estimated to cover only 60 to 70 percent of their costs.

You watch! What will finally come out is that the actuarial values will mostly be around 60%. This will require sharply higher out-of-pocket costs for everyone, while many essential services will remain uncovered.

The health insurance exchanges and many of the employer-sponsored plans will have very skimpy networks, and these will have penalties for out-of-network care. Many of the plans have become high-risk pools that are running out of money. You had one in California that went bankrupt, right?

So, what is happening to the safety net? The feds have become very liberal with their waivers.

What will Medicaid really mean state by state? Governor Rick Scott in Florida has agreed to take Medicaid for two years with the federal government subsidizing it 100%, but let’s see how it goes after those two years. He has not been a big supporter of a safety net.

There will be decreased access to docs for Medicaid and Medicare patients and increased cost-sharing of up to 5% of out-of-pocket costs. In a number of states, denial of services to Medicaid patients is permitted. Nor has there been any fix in ACA for the gaps in coverage of long-term care and mental health.

Let’s look at the battlefield. Docs are fighting against hospital systems and insurers; insurers against hospital systems and government, employers versus federal requirements, states versus the feds; and, overall, the business “ethic” versus the service ethic.

I’ve quoted Steven Brill who authored the Time Magazine article on American healthcare costs, which I understand at 36 pages is the longest article in the magazine’s history.

I thought he was really good at identifying the problems, although he was really poor at proposing the solutions. I think in the end, he really wimped out on what should be done.

Brill wrote: “unless you’re protected by Medicare, the healthcare market is not a market at all, it’s a crap shoot. People fair differently according to circumstances they can neither control nor predict. They have, they may have no insurance, they may have insurance but their employer chooses their insurance plan, and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or given the different standards of the 50 states, be poor enough to be on Medicaid.

“If they’re not protected by Medicare or they’re protected only partly by private insurance with high copays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they’re billed for even if they somehow know the prices before they get billed for the services.

“They have no idea what their bills mean. And those who maintain the charge masters couldn’t explain them to them if they wanted to. How much of the bills they may end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice in the drugs that they have to buy or the lab tests or scans that they have to get, and they would not know what to do if they did have a choice They are powerless buyers in a sellers’ market where the only sure thing is the profit of the sellers.”

We have a microcosm of what Brill is describing right here on San Juan Island. But we’re having an effective local grassroots response. A retired hospital administrator with 40 years’ experience is leading our effort to make our critical access hospital and clinic more accountable to the community for access to affordable health care.

I also want to quote Paul Craig Roberts, who was Assistant Secretary of the Treasury for Economic Policy in the Reagan Administration, He was a co-founder of “Reaganomics” and a former Associate Editor of the Wall Street Journal.

Roberts writes: “What Obamacare does is to divert Medicare and Medicaid monies to the profits of private insurance companies. Instead of providing medical care to those in need, the taxpayers’ money will provide bonuses for insurance executives and profits for their shareholders. It’s the height of folly for Obama worshipers to defend a law written by the private insurance companies that use public revenues to provide insurers with 50 million more customers and to add yet another layer of profits to the costs of American medicine.”

So, some, like Roberts, on the political right and in the business sector get what is happening.

Here is how I tie it up. We still have a market-based system. This is how markets fail patients – through predatory pricing, perverse incentives for profit, consolidation and market power, inefficiency and bureaucracy, inadequate quality control, volatility and unreliability, unethical practices, and, at times, outright fraud.

We need a shift towards patients and families at the center of the system, in a service-oriented system.

We have to get rid of the multi-payer system.

Look at this chart (that has been in my books) comparing alternative financing systems and American values.

If you look at efficiency, choice, affordability, value, fiscal responsibility, equity, accountability, integrity, and sustainability; a single-payer system such as national health insurance would do all that.

The United States is a real outsider in the civilized world Western Europe, Scandinavia, Canada, Australia, and many other countries around the world have some form of a single-payer public financing system.

We need to organize for single-payer financing by abandoning the multi-payer system, demanding that we base alternatives on credible, documented health policy science and experience; not on ideology. Obviously, what we actually practice should be based on evidence-based science and on cost-effectiveness.

We need to change how docs are paid, with practicing physicians receiving a salary practice along the lines that Dr. Arnold Relman has been calling for years and years.

We have to rebuild the primary care workforce, although you can’t really do that until you change the system. We’ve been going uphill for 30, 40 years. Now we are trying to build primary care, but until we can make the system more conducive to primary care practice, it will not be as effective as we want.

Emily and I were just in Buenos Aires, Argentina the last week. A colleague there translated my book Breaking Point into Spanish. There is an organization of 350,000 primary care docs in Latin American countries.

Many Latin American countries have a version of universal access. In Argentina, they have universal access and have had it for years. They still have many hierarchal subtleties in the system, but you go to medical school there, that’s free. If you become a lawyer, law school is also free. It’s amazing.

We need to get more active. As I said this morning in our breakfast breakout group, I think family docs know more about the system than anyone else in medicine, and yet our organizations wimp out on the bigger questions; like how to finance care.

This chart shows the advantages of a single risk pool. On the right side of the chart, you can see the “Fear factor” arguments that some people use against the single-payer system, such as “who wants government in our medicine cabinets?”

But the best way to allocate resources for the benefit of everyone, given the 20 80 rule, would be a single risk pool.

Which the VA does, and the military does (as Dr. Lee Burnett here knows from his long experience in military systems), you have a single-payer system. We have a lot of studies in the VA about the quality of care in VA hospitals being better than a whole bunch of private hospitals in the country.

What are the alternative scenarios that we might see In 2020, only seven years out now?

Until we get a single-payer system, the way ACA is being implemented, we’re not going to have universal access in 2020. We sure would if we could get a bill like HR 676 through one of these days – or years.

Cost containment is out of control now, and it will stay out of control with ACA, I’m quite sure. Affordability is getting worse in this multi-payer system. ACA will not provide comprehensive benefits. We will have more tiering taking place. I think most people will end up with probably 60% actuarial value in their health plan if they have one; which is way short of what they need.

Free choice of providers is going down the tube also. Both hospitals and the networks of doctors can be changed overnight for whole groups of patients.

Quality of care will not get a whole lot better with this very complicated system.  We already have a lot of bureaucracy now, it’s going to be a lot more as ACA is fully implemented. Equity is terrible within ACA.

It may take us five to seven years to agree that ACA is unsustainable, but it’s not going to work.

If we are looking for some optimism, where can we find it?

“Stein’s Law” gives me some hope. What we’ve enacted is going to fall apart. It will stop.

We will have to see more public backlash over cost and affordability and access. Hopefully, we’ll see a backlash from business one of these days. We’re not going to be able to continue all these subsidies to insurers.

I’ve cited before a survey of 2200 docs from all specialties in this country. Of that group, 59% supported a single-payer system. Support is out there. But we’re totally not mobilized.

We could have a liberal, conservative convergence for real reform if the system gets so out of whack on costs.

And we could have more social action from the grassroots. I think each of us, in our own situation, could be much more politically active in the interest of the patient and our community and go beyond the position of our American Academy of Family Physicians for just better reimbursement. I’ve been a member of the Academy for years and years.

But what might have been 110,000 docs in this country mobilizing for real reform along single-payer lines instead has produced a document that supports keeping the multi-payer system here and wimps on the basic questions.

Bill Moyers, a hero of mine; “This is a perilous moment. The individualist, greed-driven, free-market ideology that both our major parties have pursued is at odds with what most Americans really care about. Popular support for either party has struck the bottom, as more and more agree that growing inequality is bad for the country; that corporations have too much power, that money and politics have corrupted our system, and that working families and poor communities need and deserve help because the free market has failed to generate shared prosperity. Its famous unseen hand has become a closed fist.” I always liked that quote.

I still like what Churchill said a whole bunch of years ago about the US. “Americans will finally figure it out to get it right, but first they exhaust all the alternatives.” And this ACA is just one more alternative.

Thank you.

This session is followed by: What has NOT Changed – Reactor Session: Charles Q. North MD and Q/A Session.