There is one nefarious consequence of the Affordable Care Act, Obamacare to most, that is not mentioned as much as it should be: the damage to eyesight to anyone actually trying to read even a small portion of the act. For example, consider one relatively modest item under the act; reforms to the Medicare payment system. This entails moving from a fee-for-service reimbursement scheme to a bundled-payments reimbursement scheme. While fee-for-service is reasonably self-explanatory, try wrapping your head around the tantalizing concept of a bundled payment reimbursement scheme: the reimbursement of health-care providers on the basis of expected costs for clinically-defined episodes of care. Essentially, it is a middle ground between fee-for-service and lump-sum payments per patient treated. And those clinically defined episodes of care are usually complex and expensive procedures like heart surgery, obviously important in age-based schemes like Medicare.

The concept started in Texas apparently back in the mid 80’s and various projects since that time claim to have saved HMO’s money, did not cost hospitals money, and paid the surgeon and his or her crew, if you will, additional money. The question is, where did the savings come from? Or more precisely, who lost out on some of that cash? Into whose pocket were those systematic inefficiencies going that bundled payments miraculously moved to all the good guys? Did the insurance companies lose out? Between private insurance, HMO’s, PPO’s, specialists and staff, and patients themselves, not to forget attorneys and their litigation, the collection of players – each with their own strategies and often conflicting goals around literally life and death situations – means healthcare’s complexity is overwhelming and continually increasing. Oh, and that additional player not listed just now, the government. Imposing regulations, handing out subsidies to level a playing field that’s really a dense thicket of data, policy and regulations, and opinions.

Behind all this lurks the economic concept of pooling: Based on your predisposition to certain illnesses as well as your age and other health factors, an insurance company may price your risk and associated payments beyond any reasonable capability for you to pay. The opposing concept is moral hazard and the risk that people will take advantage of any subsidies and demand unnecessary treatments. And any trade-off between these two is essentially a political choice, aside from any real inefficiencies that are actually weeded out by, in this case, a bundled payments system. However, there is a third factor and that’s the ever-expanding technologies, including prescription drugs, that are coming on the market. On the market, meaning the billions, or trillions, spent on R&D have to be recouped. Does this factor get gamed as well? Undoubtedly, but making sure all have fair, (not even Obama’s policy advisers are quite going as far as suggesting equal, as of yet at least), access to healthcare still hits the wall of having to pay for the subsidies both to patients and sometimes to providers and others.

And that means asking how much bang for the buck is Obamacare producing? The CBO projects that over the next decade, Obamacare will increase insurance coverage by a net of around 27 million patients. The cost is projected to be around $ 2 trillion in total for the same time period. That’s slightly more than $74,000 per added patient over a decade. That’s a 2015 Ford F series truck plus a slightly used Toyota Corolla. Or a very nice downpayment on most homes between California and New York City. A not insubstantial amount. Is it worth it? For some, clearly yes. For others, it’s a further invasion of big government in their lives, whether they actually are forced to enter the scheme or merely have to pay for it through their taxes. And remember, we’re talking about a government office estimate. It could be better, or it could be a whole lot worse in 2025.

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