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Obamacare: The Uncanny Valley of Healthcare

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As a young person, I always believed that our country provided healthcare for the poor and indigent.  When I became a medical resident, I found out that this wasn’t really true.  There was a medicaid program, but the financial qualifications were so stringent that as far as I could tell the only people that actually qualified were the disabled, women who were pregnant (or 6 weeks postpartum), or single mothers of multiple children.  Men of working age seemed left out no matter what, and women were left out if they were not pregnant or with young children.   In many cases the uncovered had jobs, but made too much for Medicaid to cover them but far too little to afford commercial insurance.

In the same year, I had great insurance.  In fact, I had a plan so good that as long as I stayed within the system where I was a resident, my medical care was 100% covered with no out of pocket expenses.  And given that the medical school I worked for was a tertiary center, there was basically no medical care under the sun that I didn’t have access to for free.   That seemed pretty just to me, since I worked 110 hours a week, and it seemed fine that in return the medical system I worked for would provide for me if I needed it.

At the same time, it seemed quite unjust that the vast majority of the very poor people I took care of had no insurance at all, even though they were quite poor.  But that was the nature of Medicaid in the state I was in.

Basically this was true all over the country.   Working people of reasonable incomes had insurance with small out of pocket expenses, with common deductibles of 300 or 500 dollars and out of pocket maximums of 1500-2000 dollars or less.   The poor only got healthcare through emergency departments and public health clinics, or not at all.  So good for some, and very bad for others.

Obamacare tried to change this.   With Obamacare, for the first time if you were a poor person below the poverty line, you had 100% coverage of everything.  And if you had up to 300% of the poverty line in income, you would get substantially subsidized healthcare.   So that seems great on paper, as the poor were being taken care of.  And indeed, this was a great justice for the poor.

The problem was how it would be paid for.  The idea was that a tax would be levied on the most wealthy, which was an extension of the medicare tax that charged about 3% of income over 250,000 dollars.  Because the rich don’t need their money!!!  Well when you make 250,000 and you have huge medical school debt, a mortgage, and kids to put through college, let me tell you one doesn’t feel all that rich, but that’s another story.

But that’s not the issue.  Let’s just assume that this approximately 3% tax on the rich was a just and good thing, and it would pay for the poor to get their care.  Sounds great, and I could totally get behind that.

But in reality, it didn’t really work like that.  In fact, what really happened is that in order to pay for healthcare for the poor, Obamacare levied a massive tax on the middle class.  Now the Dems in congress will say “there was no tax on the middle class!!”, but in reality there was.  Because in order for all the math to work on all the new policies, the healthcare afforded to the middle class and wealthy would have to change dramatically.  Anyone that has a job today that had a job 10 years ago knows exactly what I am saying.

A decade ago most people had 500 dollar deductibles and 1500 dollar out of pocket maximums.  These days most people have 2500 or 3000 dollar deductibles and 5-7,000 dollar out of pocket maximums.  And on top of that, their employers pay more to buy these inferior policies than they had to pay to buy the better policies in the past.  Some of this is because healthcare got more expensive, but a lot of it is just the mathematics of the markets created by Obamacare rules.

So when Trump says Obamacare is crumbling on itself, in a way he is right.   Obamacare was wonderful for the poor, but it was absolutely terrible for the people who had decent healthcare before Obamacare.

And you might say “hey you have a job, you can afford to pay a higher deductible”. The reality is that in many cases that’s not true.

Recently I had a patient that needs a very important surgery.  I asked her to pay the deductible and copay that her insurance company would require for me to do her surgery and she couldn’t.  She has insurance, but really she can’t afford to use it.  It may prevent her from going bankrupt if she has a major catastrophe, and it pays for routine care, but a major surgery is out of reach.   The thing is that she will get her major surgery because I will do it and in the end I will be the one holding the bag when she can’t pay me what her insurance doesn’t pay after copays and deductibles.  And in reality thats a substantial portion of what I’m owed.  So in this type of case if its serious enough I’ll still do the work, but don’t I deserve to get paid for what I do?   Sometimes this kind of thing turns into some kind of righteous battle that a doctor should work for the love of the job, but come on.. is there one place in society where people do services for free?   Of course my staff expects to be paid even if my patient doesn’t pay me, as does the landlord for our office.  Its an aside of course, but its a problem that has been created by the deductibles and out of pocket maximums in the Obamacare system.

So if the middle and upper classes really lost in Obamacare, who won?  Well, as I said the first winner was the lower income class who went from uninsured to insured.

But the biggest winner from Obamacare is the hospitals.   Because in the past, hospitals had to eat the cost of providing unfunded care to all the poor people who didn’t have medicaid.  But now all these people are insured with very low deductibles.  So when they come to the hospital, now the hospital gets paid.  It does not go unnoticed that the publicly traded stocks of large hospital groups are up 400% or more in the last ten years.

So the poor won, the hospitals won, and really the rest of us got screwed.  We pay for something that doesn’t benefit us at all, either though a tax on high earners or because our healthcare policies don’t provide us the benefits they used to.

And that is what makes Obamacare so hard to swallow for so many.  If you are middle class or wealthy, you are paying a lot for this law.  But unlike a socialized healthcare system, where at least you would get access to government funded healthcare in return for your outsized contribution to the system, you get nothing at all.   And that doesn’t feel good.  Its makes people angry.

Obamacare is the uncanny valley* of healthcare.  It isn’t quite socialized medicine, and it isn’t quite capitalist medicine.   And in that uncanny valley is a very uncomfortable experience for most of us.

So in 2017 Trump is basically trying to tear apart Obamacare.  And the reality is that if he succeeds my health policy could get a lot better, as could the policies of a lot of middle class and wealthy people.   But at the same time, the injustice that was non-coverage of the poor would return, which seems like something the country doesn’t want to return to (and probably shouldn’t.)

I think in the end we have seen what doesn’t work about totally capitalist healthcare, and we have seen what doesn’t work about some kind of zombie hybrid healthcare.   To climb out of this, we are going to have to actually join the rest of the world and institute a real socialized healthcare system.  It’s high time for it.   The wealthy would complain at first but in the end I think the social justice that would be produced would be appreciated by all.

I think there is an opportunity to create a socialized system that is uniquely American.   The Canadian system has its problems, and I think they come from the fact that there is no way to buy healthcare outside of the system.   This promotes very long waits for healthcare, and lack of advancement in technology.   I’d rather see a hybrid system where everyone is guaranteed access to basic healthcare, with an ability for people of more means to buy higher levels of care.  Some people may call this unjust, but I think we better should think about which system is least unjust, rather than complaining that any idea is unjust and not moving forward at all.

One of the injustices of a pure socialized system is that there is very little incentive to become a true master of one’s craft.  If there is no financial rewards to become one of the best doctors in the country, then there will be less incentive to actually achieve such levels of talent.  Such systems tend to breed mediocrity and sameness across all providers.  I think we see this in systems such as Kaiser, which provides decent care but also has trouble enticing the best physicians in the area to work for them.  Most people who are part of Kaiser say they get decent care, but nobody raves about their doctor and most people feel like they are part of some kind of herd of patients.

I think an optimal system would be a hybrid system, where physicians could see patients on both the public system and the private system.  A physicians who comes out of training accept 100% of their practice from the public system.   They have no reputation and no particularly advanced skills, so there is no reason anyone would pay more to see them, which makes their 100% public practice make sense.  As such a physician gets more senior and has greater reputation, they can start devoting a percentage of their practice to the private setting, where they would charge supplementary fees for higher service.  This would allow a true market economy to continue to function.  If a physician though they could hack it in the private world, the dollars would show them if they were right.  If they increased their fees to 50% over public coverage and had business, then the market said they were worth it.  If they increased to 200% of public and nobody wanted to see them, they shot too high.  Over the years they could probably increase fees.

For someone like me, who is a national level expert in endometriosis care, I could probably charge significantly over public and have a brisk practice.   But when I was just out of residency, I would have had to accept 100% of public as full payment.

What’s important about such a system is that the public system still needs to pay their full fee schedule to a doctor whether they are working in the public sector or private sector.  So if a doc says “I’m worth 150% of public”, they still get 100% of fees from the public system and the patient has to pay the other 50%, either in cash or through private insurance policy.

I think it would even be reasonable to require all doctors to see at least 20% of their patients for 100% public fees.  This way, all people would have access to all doctors, they just may have to wait longer to see a very senior expert physician than they would to see a less experienced doc.  I think that medical schools that teach residents and students would likely accept 100% public funding for even the most advanced care, ensuring that there would be ready access to high level care for all.

Some people call the system I suggest unjust, and that it would provide a different level of care for the poor than for the rich.  Well, yes.  And that’s ok.  It is a little unjust, but also it is just.  I would call it reasonably unjust.  And this is what we need to shoot for – some kind of balance between just and unjust.  Because I think there is no system that will be just for all.  Everybody should feel like its a little unjust – then we are probably in right place.

Obamacare overshot the mark.  Pre-Obamacare was very unjust for the poor.  Now we are probably unjust for the middle class and wealthy.

We have to find a happy medium.   I hope we do it soon.

 

 

 

* the uncanny valley is a term coined by computer graphics experts, referring to computer generated copies of people that look a little too real to look like cartoons, but not real enough to be believable as people.  The uncanny valley is very uncomfortable to look at.   Obamacare is the uncanny valley of socialized healthcare.

 

One side of the valley (obviously a cartoon):

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Comfortably real:

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Deep, DEEP in the uncanny valley:

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And the classic uncanny valley, The Polar Express.  A kids movie that actually gave kids nightmares, and they had no idea why they hated it so much.  Uncanny valley is why:

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** A nerd’s second note:   Avatar is actually only able to be across the valley because the Na’vi are not real.  They look really really good, but since they are fictitious we don’t have a perfect reference for what they should look like so we accept them as real.  In reality, there has yet to be a successful traverse of the uncanny valley for a human being.  Some people think that Tarkin from Rogue One was across the valley:

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But for me, I realized that he was fake immediately and I HATED IT.  But apparently some people didn’t realize that this guy is fake.  Perhaps for the people who really benefited from Obamacare, it feels to them like this is really Tarkin, and that Obamacare is a godsend.  But in reality this is a CGI abomination and they really should have just gotten a different actor for Tarkin.  And Obamacare needs be fixed.  And don’t get me started on Leia.

  1. Ion
    October 20, 2017 at 3:02 am

    You are right in many ways.
    The system you describe is really going in the direction of the Germany’s health care system, which has “private” patients who pay either through private insurance or just out of their pocket. Private patients may get better services, such as single hospital rooms, wait significantly less for next appointment, etc.
    Perhaps, instead of inventing the wheel again and again we should just analyze and make better the one(s) already in existence.

    With great respekt,

    Like

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