What Would Happen if Obama’s Healthcare Reform Were Repealed?

Posted by Brian Buntz on January 15, 2012

The Patient Protection and Affordable Care Act (ACA) has an unclear future. The Act’s insurance mandate provision remains controversial and it is possible that the Supreme Court will find it unconstitutional. If a GOP candidate is elected to the White House, the ACA legislation could face further challenges. It will be difficult, however, for legislation to be repealed altogether unless, Republicans win 60 additional Senate seats. Still, House Budget Committee Chairman Paul Ryan (R-WI) remains confident that the ACA will be repealed and he predicts that will happen in 2013.

clipboardBut even if that prediction comes true, it wouldn’t matter all that much in the long run. Healthcare reform, of some flavor or another, is coming and medical cost cutting is practically guaranteed. And to address that issue, there will need to be new strategies to find less expensive ways of treating patients that are the most expensive to treat. As an article in The Atlantic points out, 5% of Americans make up approximately 50% of U.S. healthcare spending.

And, for instance, electronic health records (EHRs), which Obama has strongly supported for its cost cutting potential, are expected to become more prevalent no matter what happens with the ACA. The majority of hospitals that lack EHRs plan to get them in the near term. And while EHRs have their detractors, many believe they could prove useful in improving patient care and reducing costs—at least in the long run. 

The cost savings made possible by the ACA are, perhaps, more debatable. Medicare actuary Richard Foster estimated last year that the legislation would triple the growth rate of net insurance costs. Meanwhile, the Congressional Budget Office predicted that repealing ACA would cost $210 billion between 2012 and 2021.

Everyone seems to agree that the main problem with U.S. healthcare, all along, has been directly related to costs—and the fact that healthcare is unaffordable to many in this country.

In its mission to improve healthcare in this country, however, the ACA calls for a number of new taxes and other funding sources. In essence, more than targeting cost cutting per se, it looks to reshuffle healthcare-related costs—reducing costs for some and raising them for others. To name but some of ACA's funding sources, the ACA legislation would boost the Medicare tax for the rich, will impose the much-discussed 2.3% device excise tax, create a sales tax on indoor tanning, a new tax for the so-called "Cadillac insurance policies," and create an annual fee on insurance providers. College students also would contribute by paying for interest on their student loans.

Saving Cash through Decentralization

5% of Americans make up approximately 50% of U.S. healthcare spending.

As Harvard business professor Clay Christensen points out, healthcare could be made more affordable through decentralization. And as the digital revolution continues, and telehealth begins to make good on its promises, this is bound to happen. As a result, patients will continue to become more empowered. Doctors can tap the power of technology to deal with a greater number of patients. And, with technological breakthroughs, physicians can be increasingly precise in the care they deliver. In addition, as consumers become more involved in their own healthcare, there is a lot of potential for change outside the healthcare delivery system. As Leslie Saxon has pointed out before, many people check their e-mail compusively. What if they were able to use technology to frequently monitor their vital signs and stress levels?

In terms of the broad trends, we've already seen decentralization at work in the computing industry. Decades ago, computers were rare—they were mainframes that required serious funding to afford. You had to be a specialist to use them. Now, practically everyone carries an impressive amount of computing power (that is relatively easy to use) with them in the form of a smart phone. And computing technology, while it isn't cheap, is always getting less expensive and more powerful. Now, computing power isn't centralized at all; it's pervaded practically every facet of our lives.

It's about time we harnessed the power of computing to help cut costs in healthcare, which, in many respects, is resistant to change. So what will this decentralization mean for an average patient? While he or she isn't ever going to be able to perform laparoscopic surgery with a cell phone, you could in the not too distant future, perhaps use a smart phone to diagnose an array of diseases and to help monitor a disease they already have. 

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