The Supreme Court’s June 28, 2012 ruling has “put to bed” the constitutionality of the Patient Protection and Affordable Care Act (ACA) or “Obamacare” as it has come to be known. The nearly split 5-4 opinion of the court, authored by Chief Justice Roberts, upheld the constitutionality of the ACA’s central features, i.e. the individual mandate and the expansion of Medicaid. (With the exception, however, that states which refuse to expand Medicaid will no longer forfeit their existing Medicaid funding. These states will only forego the receipt of additional federal monies.)
What does the Court’s holding really mean for Americans moving forward and does it impact the future of health care? Certainly from a constitutional law and insurance regulation perspective, the Court’s holding was historic. Beyond that, however, the Court’s final determination was to some degree irrelevant to the changes that are already occurring within the fabric of health care in the United States. Many changes have already been occurring within health care while the nation has been focused on the political fight surrounding Obamacare.
During the research and writing of my new book, The New Health Age: The Future of Healthcare in America, several “eye opening” trends and transformations became abundantly clear, regardless of the ACA. The dynamic flow changes outlined in the book will continue to drive dramatic changes to America’s state of health and our health care system as a whole. The changes ahead may in fact accelerate subsequent to the Court’s holding, but the trends are irreversible nonetheless.
First, America’s per-capita spending on health care when compared to other industrialized nations in the world is the highest (nearly 18 percent of GDP). In the 1970s, the average American consumed approximately $400 a year on health care. Today, it is approximately $8,000. These costs are crippling the public and private sectors and significant changes are occurring to bring down health care spending.
Second, when analyzing America’s population as a whole, the return on the nation’s investment for such high spending is far from impressive. Let’s examine just one example. Increase to the chronic disease rates in the U.S. is startling. For instance, the rate of new cases of type 2 diabetes has nearly doubled in the U.S. in the last decade. These new cases mirror the increase in America’s obesity rates (nearly two-thirds of Americans are overweight), and obesity is a leading cause of the blood sugar disease. Even more alarming is that childhood obesity has risen to such a level that some health officials predict that the current generation of kids may enjoy shorter lifespans than their parents. This fact is eye-opening and counters any claim that our disease rates are tied to an aging population. The issue goes much deeper.
Third, there are less economic drivers in the health care system to foster superior efficiencies and higher payments to the top performers when compared to other marketplaces. Throughout the 20th century, few payers of health care services paid physicians or other health care providers for keeping Americans well or for preventing disease – the best ways to ultimately drive down costs. The old model was to pay physicians for the treatment of disease and for sickness versus paying doctors for prevention and wellness. The models of the future will focus on health management and prevention, regardless of the ACA.
Today, for the most part, the top performing health care professionals get paid the same as the low performing professionals. Name one other free market business sector where top producers earn the same as low producers. Imagine a baseball player batting .100 getting paid the same as a .333 hitter. Do you think the players union would tolerate that? Physicians should not either and will not have to down the road. Those who produce higher quality results in health care will earn more in the years ahead, regardless of the ACA.
On the efficiency side of things, when Americans want access to their financial information, nearly every banking location in the country can pull up personal data for their customers. Is this the same for health care records? No. Medical records can hardly be shared electronically within a local community, much less across the country. The increased connectivity and availability of health care information will transform health care in countless ways in the future.
So while the Supreme Court’s ruling is profound by constitutional law and by insurance regulatory standards, it is far less relevant to the future of health care because so many changes are and will continue to occur despite the ACA or Obamacare.