No time for complacency after two years of Obamacare

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This article originally appeared in Washington Examiner, 3-22-12 

This week marks the two-year anniversary of the Patient Protection and Affordable Care Act of 2010, otherwise known as "Obamacare." 

While we eagerly await the U.S. Supreme Court decision on the constitutionality of the law, we should reflect on the impact this legislation has had on the U.S. health care industry. 

Regardless of the Court's decision, Obamacare has heralded a new level of bureaucracy (approximately 2,700 pages worth) only adding complexity and cost to a system desperately needing reform. 

While Obamacare took on the insurance sector and attempted to create "access" for uninsured Americans and coverage for pre-existing conditions, it did so at great cost -- yet didn't deal with the fundamental issues of delivery and payment reform that are so central to the current situation. 

Until we address fundamental business model changes in healthcare -- focused on transparency, accountability and market-based innovation centered on the consumer -- nothing will really change for the better. 

Everyone agrees on two things... the system is broken... and someone else needs to fix it. 

Part of government's "grand plan" to fix health care, embedded in Obamacare, was the Accountable Care Organization (ACO), which proposed in some vague fashion to make providers more accountable for the care they provided. 

The concept has provoked a massive yawn from providers. Ironically, more accountability is needed -- but it's up to us as business leaders, patients and consumers to demand it -- to become engaged, to ask the questions that matter to us about economic and clinical value provided by the drugs, diagnostics and therapies we receive, regardless of whether or not we're paying for them directly. 

I discuss this in greater detail in a April 2011 Heritage Foundation policy paper on ACOs, "Why Accountable Care Organizations won't deliver better health care -- and market innovation will." 

The ACO model piles regulations and oversight onto the existing system, which only exacerbates its patently obvious shortcomings. When we add layers of complexity, we only continue to add costs. The piecework payment process avoids any real accountability and significantly, by encouraging larger and more complex organizational structures, the ACO model creates an environment that is even less hospitable to a market-based orientation than what we have now. 

Transparency, better health outcomes, and the issue of value are almost guaranteed to be lost in the politics and hierarchy of an unproven organizational experiment. 

The last thing we need now is additional bureaucracy and unmanageable regulations, which ultimately limit our ability to reduce costs and improve outcomes. 

Only fewer rules and better judgment will help us get out of this healthcare mess. The tome we know as Obamacare -- including ACOs -- means well, but doesn't offer the proven results we need. 

Adding layers of regulation only creates confusion and compounds our dire financial situation. The problem certainly doesn't go away when it's buried in red tape. 

Healthcare is an industry in transition -- globally. It faces sweeping changes in regulation, competition, technology and market expectations. Adding more levels of complexity to the current system will only degrade the status quo further... and that isn't working well already. 

What we need now is innovative companies challenging basic assumptions about business -- their consumers, the products and services they offer and how they go to market. 

This is how we can implement real change and reduce costs while improving outcomes. Whatever happens in the Supreme Court, we need to finish the job and do it right. 

Rita E. Numerof, Ph.D., is president of Numerof & Associates, Inc., a strategic management consulting firm, a regular contributor to the Manhattan Institute's Medical Progress Today blog, and a senior fellow with the Center for Health Transformation.

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