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Zeke Emanuel Hammers Obamacare Again

Obamacare’s best frenemy, Dr. Ezekiel Emanuel, and his colleagues at the Center for American Progress, gave up on Obamacare last year. In yesterday’s Wall Street Journal, he and Topher Spiro emphasize that Accountable Care Organizations, which Obamacare established to co-ordinate care and lower costs in Medicare, are failing to achieve either goal:

The Obama administration recently announced a laudable goal: 50% of Medicare payments will be made under new payment models by 2018. But to reach this goal, the administration must change tactics and use the authority given to it under the law to rapidly expand payment reforms.

While many reforms are being tested, the administration’s main focus has been on creating “accountable care organizations.” ACOs are groups of medical providers that are rewarded for achieving savings on their total spending while improving quality.

A cost-control strategy that relies on expanding the number of ACOs won’t be successful. Before it is too late, the Obama administration must focus on a reform that can be scaled. Medicare should lump together physician services, hospital costs, tests, medical devices, drugs and rehabilitation services related to common ailments—such as broken hips, heart stents and cancer treatments—into a bundle. It could then pay a medical provider a discounted amount for the whole array of services.

(Ezekiel Emanuel and Topher Spiro, “The Coming Shock in Health-Care Cost increases,” Wall Street Journal, July 8, 2015)

I am not quite sure what they are getting at, because Medicare did establish bundled payments in 2013. It is not clear what Dr. Emanuel and Dr. Topher believe the current model lacks. Here’s my summary of the difference between government-dictated “accountable care” and “bundled payments”: The former is for healthy patients and the latter is for sick patients.

Anyway, this invites the question: If current bundling and accountability, as determined by the federal administration are failing, then why would we expect the Obama administration to do a better job? Why would we expect a future administration to do a better job?

In which other line of business would we expect an insurer, a third-party, to determine what should be bundled and what should be sold independently? Do auto insurers decide whether radios should be standard in cars? Do homeowners’ insurers decide whether homes should be built with kitchen appliances included?

The only way to ensure that bundled care is bundled right is to let patients control the dollars and let providers experiment with collaborating on different bundles of care. That would mean turning Medicare into “some kind of voucher,” as President Obama has put it.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

John R. Graham is a Senior Fellow at the Independent Institute.
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