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November 6, 2013

Why it's easier to fix your phone than your body

By: Jason Hagey   Comments: 6
John C. Goodman, president of the National Center for Policy Analysis. Photo: Dan Brunell/AWB
If something happens to John Goodman's cell phone, he knows he can get it fixed quickly.

"There are a dozen shops I can walk into with no appointment and get high-quality, low-cost repair," Goodman said Wednesday during the keynote address at AWB's Health Care Forum in Seattle. "There's even a national chain: iHospital."

But getting an appointment with a doctor is another matter.

The average wait to see a new doctor in the U.S. is three weeks, Goodman said. In Massachusetts, which adopted a health law similar to the Affordable Care Act, it's three months.

So why is the market so kind to Goodman's phone and unkind to his body? Cell phones are bought and sold in the real market. Health care, on the other hand, has been disconnected from the market for so long that no one knows what it really costs.

"We're not that much different than Canada," Goodman said.

Goodman, known as the father of the Health Savings Account, is president of the National Center for Policy Analysis and the author of a popular health care blog. He is also the author of the new book, "Priceless: Curing the Healthcare Crisis."

He outlined what he believes are the biggest problems with President Obama's Affordable Care Act, as well as some possible solutions.

Long wait times and difficulty accessing a doctor can actually be more of a deterrent to quality health care than the fee a doctor charges, Goodman said.

One way to make it easier for low-income people to see a doctor, he suggested, is to use the same sort of system that's used for food stamps.

"You never hear that low-income folks don't have access to supermarkets," he said, and yet one of the biggest problems they encounter in health care is finding a doctor who will take Medicaid.

The heart of Goodman's presentation, however, was his list of the six biggest problems with Obamacare. They are:

  1. The mandate that requires everyone in the country to buy something that's increasing in cost at twice the rate of income growth. The rising cost of health care isn't Obama's fault, Goodman noted, and yet requiring people to pay for something that's rising so much in cost means "eventually it will crowd out everything else you buy."
  2. A bizarre system of subsidies in which people with equal are treated differently. "It's causing havoc in the business world," he said.
  3. Exchanges with perverse economic incentives. The way the health benefit exchanges are set up, they need to sign up healthy people and avoid the sick, Goodman said. And it doesn't stop with enrollment. Once people are in their plan, there is an incentive to over-provide  to the healthy and under-provide to the sick.
  4. Perverse incentives on the demand side. Because of the relatively low fines for failing to buy insurance and an IRS that lacks serious enforcement power, healthy people don't have much reason to enroll. Combine that with a system that's difficult to use and it creates a real problem. "The only people who persevere are the ones with serious problems," he said. This is why Goodman thinks a "death spiral" is possible. Premiums will go up as more sick people sign up," he said.
  5. Obamacare over-promises. It promises benefits that it can't pay for and does nothing to address rising demand, Goodman said. That will result in a rationing problem. Lines will get longer, hurting the most vulnerable while those with the money to pay for them will begin hiring "concierge" doctors.
  6. The so-called "senior" problem. The Affordable Care Act takes money out of Medicare, a problem that no one is talking about but will eventually mean that senior citizens will have a harder time getting into a doctor. When that happens, seniors will put pressure on Congress. "Seniors vote," Goodman said, adding "and they switch parties."
So what's the answer?

The first steps, Goodman said are to:

  1. Get rid of the individual mandate
  2. Adopt a system of subsidies that treats everyone the same.
"If we treat everyone alike, tons of problems go away," Goodman said, noting that's exactly what Sen. John McCain, R-Ariz., proposed during his presidential campaign.

At the moment, no one in Congress or the White House is talking about how to fix the serious problems with the Affordable Care Act, Goodman said. Republicans just want to abolish the law, while Democrats don't want to admit fault.

So for now, Goodman is talking with business leaders and other organizations in Washington, D.C.

Eventually, though, Goodman believes Congress will be forced to make major changes. The problems are just too big and too numerous not to.