[Editor's note: This story originally was published by Real Clear Health.]
By Kendrick Johnson
Real Clear Health
The body is complex and pretty much every time we attempt to "fix" something we also cause problems. But, as a doctor, we understand the pros and cons, we warn the patient that there could be long-term effects, and when it isn’t an emergency we give them the option to take it or not. The healthcare system is also complex, and politicians continue to address the symptoms of our failing market, but they keep missing the real problems – they also seem to be causing more problems than the problems they are attempting to solve. They should have to provide warnings.
While I was working in the Emergency Room, basically every time someone came into the ER with the signs and symptoms of a whole system infection called sepsis, I gave them a drug called vancomycin. Vancomycin is "a great drug." Patients almost always want you to use the biggest gun possible to kill their infection and vancomycin is one of the biggest guns there is because it kills a bacteria that few other drugs can kill. The bad part about "big guns" is collateral damage. Vancomycin kills bacteria, but it also kills kidneys. I hated having to tell people that we stopped their first problem, but we also gave them a very big new problem. Some of them would have kidney damage for life.
Similarly, there is currently a systemic problem with healthcare – prices are increasing without providing increasing value. It doesn’t have to be that way, and there are plenty of examples of how to fix this correctly, but like doctors in the ER politicians often pull out the “Big Guns” to fix problems because voters like seeing them make these big gestures.
But, like the big guns in the ER – these large gestures have side effects too.
An example of this is the 80/20 rule that was a part of Obamacare. The rule says that insurance companies cannot profit more than 20 cents off of every dollar of insurance premium they charge to the "customer." The logic behind this is pretty simple. The government didn’t want insurance company executives to run away with huge profit margins so they just made a rule that makes it so they can't. It seems like a pretty good idea at first glance – The government thought that insurers were making too much, so they just limited how much insurers can make.
At least that was the idea of their top-down approach, but there are side effects. Now that insurers can only profit 80 cents on the dollar, the only way to increase their profit is to spend more dollars!
So, assuming that businesses are incentivized to make money – which was the admission of the law to begin with – the 80/20 rules is just a law that essentially mandates the cost of healthcare to go up in order for insurance companies to increase profits? And, as the NY Times pointed out last year – insurer profits are soaring – as are our healthcare prices.
Like healthcare, public policy is complex. But the answer usually relies on choosing a route that eventually leads to the patient not needing me – instead of needing to see me more often. Perhaps, if the government was to adopt this method and start backing out of healthcare instead adding more band aids to fix a market that they have already broken then it is more likely that the market would correct sooner rather than later – and again we have examples of this already happening in the market.
For now, all public policies should come with their own “Black Box” warning: Bad public policy risks fewer doctors, higher prices, and less access.
Dr. Kendrick Johnson D.O. is a family physician and founder of Ark Family Health Direct Primary Care in Phoenix. Follow him on LinkedIn https://www.linkedin.com/in/kendrickjohnson/
[Editor's note: This story originally was published by Real Clear Health.]
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