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WSJ: ObamaCare 'cost controls' haven't, don't and won't



ObamaCare, officially known as the Affordable Care and Patient Protection Act, is a good example of how names politicians give to things often have little or nothing to do with the actual substance of the thing. You'd think from the name of the law - and from much of the Democrat rhetoric in support of the law - that it cuts costs and saves people money. Anyone who has seen what's happened to health insurance premiums knows that's not true. But if you still were holding out hope that ObamaCare would save money in some obscure corner of the world, please be advised: Even the government's own controlled laboratories for cost-cutting under ObamaCare are not cutting costs:
ACOs were supposed to be a new paradigm for health care, with hospitals, primary care physicians and specialists working in teams to be more efficient and coordinate patient treatment across providers. In 2011 HHS introduced this business model as a new federal regulation, so providers that reduce spending according to a formula are paid a bonus that is a portion of the savings. If participants boost spending over this benchmark, they pay a penalty. The Medicare “Pioneer” ACO project originally featured 32 experienced health systems hand-selected by HHS because they had already made progress toward the ACO model. Thirteen—or one-third of the program—have since dropped out as they spent more than the old status quo. In year one, spending increased at 14 sites and only 13 of the 32 qualified for a bonus. In year two, spending increased at six of the remaining 23 and 11 received a bonus. Spending did fall somewhat overall, driven by a few high-performance successes. After netting out the bonuses and penalties, the Pioneer ACOs saved taxpayers a grand total of $17.89 million in 2012 and $43.36 million in 2013. All in, per capita spending was a mere 0.45% lower compared to ordinary fee for service Medicare. Yet the upfront start-up investments for the pioneers (in administration, compliance and information technology) ran to $64 million, so at best the program is a wash. More to the point, the Medicare budget for 2013 was about $583 billion and these are supposed to be the most experienced providers. If most of them can’t succeed, what about the community hospitals that need the most improvement?

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No one should be surprised by this. ObamaCare is a proposition that could not, by definition, cut costs. Why? Because it presumed to do what is impossible to do without blowing costs through the roof, which is to extend care to everyone regardless of their health or age, and without allowing insurers to factor individual risk into the pricing equation. That cannot be done - not without blowing spending so sky-high that the system overall is spending far more than they used to, and getting far less in return. That's why people are getting stuck with networks that don't include their own doctors. That's why people are suddenly discovering their prescriptions are no longer covered. That's why premiums are going up. That's why you're seeing five-hour waits in California emergency rooms. That's why doctors are leaving the profession rather than except paltry Medicaid reimbursements that don't even allow them to break even on their costs. ObamaCare is a disaster conceived on a total misunderstanding of health care finance. The problem in health care was not that too few people were "covered" by insurance. It was that people had become too dependent on insurance for every tiny thing they could and should pay for themselves, and that drove up the cost of insurance to the point where it drove just about everyone out of the market if they couldn't get their premiums paid by their employers, who were getting a tax break in exchange for paying it. ObamaCare doubled down on that mistake and added an unhealthy dose of government control and economic ignorance to the equation. That's how we got where we are. No one is saving money - not doctors, not patients, not taxpayers, not insurers. No one. ObamaCare may be the single worst piece of legislation ever passed in this country. If it is truly "here to stay" as liberals insist, then all that means is that this country has passed the point where it has any hope of reclamation. We're too stupid.


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Dan Calabrese -- Bio and Archives

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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