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As perhaps another 32 million people are added to the Medicaid or private health insurance systems—the purported goal of the ACA—without a commensurate increase in the number of health care providers, one can expect wait times for physician appointments to only grow longer, and emergency rooms and urgent care centers to grow more crowded. The experience in Massachusetts after its health care reform of 2006 (upon which the ACA is largely modeled) tells us what to expect.
If Canada’s experience serves as any guide, one can expect the one-tiered system in the U.S.—where anyone, regardless of socioeconomic status gets the same quality health care by the same physicians in the same hospitals with the same promptness—will slowly evolve into a two-tiered system, whereby those who can afford it will get state-of-the-art, prompt, courteous, consumer driven health care, while everyone else waits on line.
In fact, right before our eyes, it is already happening. The advent of “concierge” or “boutique” medicine was just a harbinger of things to come. In 2009, Dr. Keith Smith, anesthesiologist, managing partner and co-founder of Surgery Center of Oklahoma, took the radical step of posting online the list prices for 112 common surgical procedures. This includes the surgeons’ and anesthesiologists’ fees. They operate their clinic in a cost-effective, customer-oriented manner, and are able to provide their services for a small fraction of what a hospital would charge. They are attracting the business of increasing numbers of employers who provide health care coverage and are trying to rein in costs, as well as individuals with high-deductible insurance. Because of their competitive prices, they are attracting an increasing number of “cash pay” clientele.
In 1997, Vern Cherewatenko, MD of Tacoma, Washington founded SimpleCare, a patient and physician cash only provider network. According to a 2009 USNews.com article:
Medical practices that participate in SimpleCare's network agree to charge no-hassle, discounted prices to the organization's members. Patients pay a predetermined fee based on whether their visit is minimal length (five minutes), brief (10 minutes), short (15 minutes), medium length (20 minutes), long (30 minutes), or extended (60 minutes). Fees vary depending on the medical practice, but a good rule of thumb is $50 for a minimal visit to $300 for an extended visit. Cherewatenko says he isn't advocating that people go without insurance; indeed, SimpleCare accepts practices into the network that use the flat-fee structure for members but also take patients with insurance. But he does think it's a good idea to choose a high-deductible health plan and seek routine care through direct-pay providers who charge discounted rates.
The demographic cliff has been reached. With increasing numbers of Medicare and Medicaid beneficiaries stressing state and federal budgets—and future liabilities impossible to fund, provider reimbursements will continue to drop. Add to this the piling on of regulatory compliance costs, from electronic health records, to complex coding requirements, and we can expect to see more and more doctors unable to survive in private practice. The current trend of private practice consolidation and corporatization will only be matched by doctors closing their practices and becoming hospital employees. The old model of the private physician or small group practice giving personalized, one-to-one patient care will soon fade from memory.
Concurrent with the end of the physician as independent agent we see a shift in work incentives. Therefore, one can expect a decrease in physician productivity. Decreased physician productivity only exacerbates the physician shortage, which is, in turn, exacerbated by the sudden influx of Medicaid and privately insured patients. Wait times, a form of stealth rationing, will only get longer. It is worth remembering the adage: “Just because you have health care coverage doesn’t mean you will receive health care.” Ask any Canadian on a waiting list in the government-run system.
As the situation worsens, look for the growth of private, cash-only, clinics, specialty hospitals, and surgical centers across the nation—and perhaps some closely offshore. As part of the deal to get the American Hospital Association’s endorsement, a feature of the Affordable Care Act denies Medicare certification to physician-owned hospitals other than those already in existence. However, physicians can still build and run their own hospitals if they are not interested in participating in the Medicare system. Therefore, look for groups of physicians to organize consumer-driven hospitals—not unlike Lasik or cosmetic surgery centers—that take no insurance and no Medicare. Finance companies already exist to help clients of cosmetic surgery centers finance their surgery, and it would be easy for these companies to expand into the growing niche of private direct-pay clinics and hospitals.
If the healthcare systems of the UK, the European continent, and now Canada provide any glimpse into America’s future, look for a future where the affluent and the connected get state-of-the-art personalized, prompt health care, while the masses wait in line for delayed, impersonal, and often substandard care.
As PJ O’Rourke once said, “If you think health care is expensive now, just wait until it’s free.”
This article originally appeared in the Spring 2013 Issue of AZ Medicine.