Proceedings of the 22nd National Conference: Thought Provocateur Session #1 (John Geyman MD) – "What Will Not Work: The Fundamental Errors in PPACA"

We gratefully acknowledge the sponsorship of the Cascades East Family Medicine Rresidency Program/Sky Lakes Medical Center/Oregeon Health Sciences University (Doctor Rob Ross, Program Director) for the transcription and editing of this section of the Proceedings of the Twenty-Second National Conference:


Mark E. Clasen, MD, Ph.D. (moderator), Wright State University, Dayton, Ohio: Our next thought provocateur is Dr. John Geyman, professor emeritus at the University Washington. He’will talk about “What Will Not Work, the Fundamental Errors in PPACA”. John.

John P. Geyman, MD; University of Washington Emeritus Professor

John P. Geyman, MD, University of Washington: Thank you Mark. it’s great to be here. it’s great to be anywhere.

I have a couple of comments to Dr David Sundwall about the “senior” thing (referring to the previous session’s award of a Senior Fellow plaque to Dr Geyman.) I’m also a UFO. There’s a group of 300-400 pilots in the world who are United Flying Octogenarians. I just became a UFO when I turned 80, which was two months ago.

Obviously this is a geezer up here. A little more disclosure. I was born a Republican and it took me about 65 years before I saw that wasn’t a very good idea. Then I thought about being a Democrat, and it took me another few years before I saw that wasn’t a very good idea either. So then I became an Independent. Now I call myself a progressive. So, that will color what I’m going to say here.

Anyhow it’s great to be here. This is a great group of people who I would like to see a lot more of, so this is a special meeting. It always is. Some comments were made earlier in the last half hour about the implosion of this law. Well that’s not the big deal. The system is imploding. Right? If I could say two words that would summarize this talk it would be “market failure”. Whatever politics or ideologies are prevailing, it is supposed to be the market that will fix things – whether it’s in public programs, privatized Medicaid and Medicare, or the private sector. Right? But that’s baloney!

Now let me go through these slides and I’ll tell you why I think this law just won’t work and markets will continue to operate as they have as this law is implemented. The stakes are a lot beyond the law, and deal with the whole system.

The Problems that PPACA is Supposed to Address

I’m fairly simple minded, so I like to go back to ask what are the problems? And they’re obvious we all know them: the soaring costs, the increasing unaffordability, the restricted access, and variable quality of care. But PPACA isn’t going to fix these four problems!

The Problems

PPACA’s Good Points

The bill does have some good points. We all know them, so I’ll try not to spend much time on this. Yes, 32 million more people will be  insured by 2019; there will be a subsidy to help lower income people to afford coverage, good! Parents are able to keep kids on their policies until age 26, good!

What’s good!

There will be an expansion of Medicaid to include 16 million people, starting in 2014; new funding community health centers, good, but still not enough; preventive services without cost sharing, good idea!

There’s limited reforms of the health insurance industry, but not too much impact on them. We’ll come back to this.

A non-profit Patient Centered Outcomes Research institute (PCORI). That sounds really good, right? Wrong! I’ll explain that in a minute.

PPACA’s Bad Points

It’s also got a bunch of bad points.

What’s bad!

There is zero cost containment. There are no price controls.

Where’s the cost containment?

There’s continued unaffordability for tens of millions of Americans.

No real attempt to address health care affordability!

There’s no universal coverage. The issues of access are largely unaddressed, and, much of the increased access that is promised is in the future and is preceded by deep cuts.

No universal coverage!

There are bonanzas for industry. Perverse incentives for overutilization of services remain in the system

Perverse incentives remain in system!

Although there is waste through new layers of bureaucracy, there is no effective reform of the insurance industry. This reform system will not be sustainable. This is not rocket science!

What didn’t change!

What Went Wrong

Senator Max Baucus with Catherine McLaughlin, member of the Citizen’s Health Care Working Group, at a public meeting in Billings, Montana

Where did it go off track? Corporate self-interests dominated the politics. There was poor framing of the issues, and excess caution by the Democrats and the Administration.

The Citizen’s Health Care Working Group conducted public meetings all over the country, and most of the meetings came up with the idea of the “single payer” for health care, but when the group’s final report came out, the idea was not even mentioned.

There was distortion, disinformation and deception throughout the whole debate, with a complicit role in the media. (General Electric owns NBC, and GE paid no taxes last year. Ha! Wow! They outsource like mad, and disregard public opinion.)

What went wrong?

What can we learn from what happened? Corporate stakeholders hijacked the process to protect their markets,

There’s a big problem with the “middle of the road” approach by the Congressional Democrats and the Obama Administration. You get run over in the middle of the road.

There was an unwillingness of political leaders to acknowledge the failure of incrementalism. That unwillingness is rampant.

Don’t look back at the last 30 years that we’ve tried markets. Do health care markets work? No! Well how many more years are we going to have to continue this before we agree they don’t work? There was flawed framing from the start.

What we learned!

The market failure of the health insurers was not recognized as the wellspring of system problems. The failing insurance industry lacks enough value to justify its bailout, yet, through PPACA, we have bailed them out!

I like the economist, Herbert Stein, who said: “If something cannot go on forever, it will stop.” Stein’s law applies to private insurers. Without subsidy, they’re on a death march. They’re really looking for the PPACA subsidies. Wait till we see what the bill for these subsidies will be. Wow!

Employer sponsored insurance continues on a downward trend. iIncrementalism hasn’t contained costs in the past and won’t this time. The “safety net”, it’s just going to pot.

What won’t work!

Gaming PPACA

The health insurers are playing a shadow game right now.  They are trying to maximize their Medical Loss Ratio [MLR], and to avoid having to cover a longer list of essential services. You notice that the list of essential services has not been reported out yet, right?

There’s a lot of game playing behind the scenes, but they still like that individual mandate and the 32 million people, right. They’re playing it both ways.

How will insurers game the new law? They will seek a broad definition of medical loss ratio, to include all sorts of stuff that isn’t direct patient care, right?

There will be a continued escalation of premiums. California saw a 39% increase last year and some states saw 50% increases. The state by state rate setting commissions tend to be pretty liberal in granting rate increases and seem to be pretty much in the hands of  insurers and their lobbyists.

Grandfathered Employer Sponsored Insurance (ESI) plans are exempt from regulations until 2018! How about that one? There was intense lobbying by the insurance industry for minimal benefit requirement rules. I mean they’ll market all these crummy plans, whose actuarial value is down to 60%. There will also be a coordinated pushback against state regulators.

The Next Try at Health Care Reform

So, it seems to me that there are a couple of alternatives for 2020. Consider a chart where the multi-payer system is on the left – that’s what we’ve have now – and a single-payer with universal coverage is on the right. On the left there will be a series of “noes”. There won’t be universal coverage. There won’t be cost containment, nor affordability, nor comprehensive benefits. On the right, yes we would have all of that.

How about choice of physician and hospital? Not with the multi-payer systems. These ACO’s are going to get us more consolidation, so there will be less choice, in more restrictive networks. Quality of care will be highly variable. The bureaucracy will have greatly increased.

Will there be health care equity?  No! disparities will increase even more. Is the system sustainable? No; there will be widespread system collapse! That’s what we will see on the left side of the chart. And if you look at the present trends, that’s what they tell me versus what we could have on the right (i.e., single payer universal health care).

Why gaming will continue!

Let me propose a nine point approach to real healthcare reform, organized for single-payer public financing. Abandon the multi-payer system that is dominated by a failing and private insurance industry. Let’s demand that policy alternatives be based on credible, documented health policy science and experience, not on ideology, wishful thinking or a corporate bottom line. Ideology, wishful thinking and the corporate bottom line is really what’s running things.

Let’s recognize that healthcare resources are limited – we won’t deal with that debate yet, will we? – and must be stewarded for care of the whole population. Let’s establish an independent, nonpartisan, science-based national commission. Well, PCORI is an attempt, but in that book, it’s prevented by law to deal with cost effectiveness or to recommend, or to really  guide coverage decisions or reimbursement policies.So that’s not going to be a strong course.

We’ve got to change how docs are paid! (We spent an hour and a half in our breakfast group [April 18, 2011 Group One] and we didn’t come up  with anything. Well, Lee Burnett, our scribe, who’s working on 24 words or less, where are you, Lee? Oh yeah, have you got those done yet that are pithy, the kind that really guide the future on how to pay physicians? Yeah, well Lee’s working on it. We were all over the place over breakfast and didn’t get very far.)

This audience (that attends the National Conferences), especially knows we’ve got to rebuild the whole primary care workforce. I have one more book that’s just coming out later this year which deals with that and with a 50 to 75 year view of primary care in this country and where it’s going. We need to lead so the President will follow. Let’s do something about the filibustering in the Senate, mobilize popular support for single-payer and build a social movement for real healthcare reform. So that’s pretty easy to say and put in a slide, but pretty hard to do, but we have to do it.

What to do!

Why can we be hopeful that we can fix this problem? Well Stein’s law: this is not going to go on forever, we’re imploding the system.

I don’t care so much about PPACA, because it isn’t going to work. I think we’ll start to get some public backlash. It’s amazing to me there’s not more yet. Access, choice, affordability: they’re all going the wrong way!

I still expect more backlash from business, and I’m still amazed that they haven’t woken up yet. The subsidy amounts are going to be a big shock. They’re not going to be sustainable. There should be growing support among docs as a matter of course. A study done a few years ago showed that  59% of all but three specialties favored single-payer national health insurance.

I hope that we will get a liberal-conservative convergence gathering support for real reform. We don’t see much of that yet. But I will hope so. We need the power of social action from the grass roots, of course.

Why real reform can happen!

Here’s one of my heroes, Bill Moyers. Here’s what Moyers had to say just a year ago: “This is a perilous moment. The individualist greed driven, free market ideology that both our major parties have pursued is at odds with what most Americans really care about. Popular support for either party is rock bottom, as more and more agree growing inequality is bad for the country, that corporations have too much power, that money and politics has corrupted our system and that working families in poor communities need and deserve help because the free market has failed to generate shared prosperity. Its famous unseen hand has become a closed fist.” I think Moyers is right on.

Putting things in perspective!

That just summarizes what I think is going on, why there isn’t more outrage and why we can’t get solidarity across the political spectrum as the system implodes and more and more people can’t get care and the safety net falls apart even more. In Las Vegas the University hospital closed its oncology service last year. I hope that generates a little outrage.

Thank you for having me!

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