By Dr. Paul Kempen
If there is one constant I have experienced in my 35 years as a practicing physician, it is the inexorable increase in the cost of health care on an annual basis. Health insurance, in particular, has been skyrocketing for many years.
I have had many long conversations with my patients about why this is the case. More often than not, they want to direct their anger at physicians like me, hospitals and health centers, and, most of all, their health insurance companies.
But the fact of the matter is that we are all working in a system that we can’t control. We’re responding and reacting to a massive bureaucratic apparatus that starts — but by no means ends — in Washington, D.C.
Let me be clear: This problem existed long before the Affordable Care Act, also known as Obamacare. But that law increased the bureaucratic burden more than any other health care law, regulation, or mandate that I have seen in my lifetime.
This has been a key driver of the major premium hikes, deductible hikes and co-pay hikes that have dominated headlines in recent years and are set to do the same between now and the end of the year.
It’s worth explaining the cause and effect in detail. At its root, Obamacare is really an empty vessel that was supposed to be given meaning by a vast bureaucratic state. The law itself created nearly 160 new agencies charged with interpreting and implementing the law. They do this by issuing little-known rules and regulations that dictate what health insurance companies, medical doctors and other providers, and patients may or may not do.
The exact regulatory burden is unknown — and unknowable — but it is a telling fact that it was 11,000 pages long in 2013. That was three years ago, before the law was even implemented.
The biggest burden falls on health insurers, who now have to navigate a complicated — and constantly changing — system of plan pricing, coverage mandates and more. This is not a cheap proposition. It can only be done with the help of lawyers, human resource specialists and countless other non-physician staff who cost a pretty penny but don’t improve patients’ health outcomes. Put another way, the federal bureaucracy’s growth has required a corresponding increase in health insurance bureaucracy.
The numbers bear this out. A study last year found that Obamacare’s bureaucracy-related costs have led to $270 billion in new costs for insurers. In 2013, 10 cents of every premium went to administrative support. Today, that number has grown to 22.5 cents — an increase of over 100 percent.
Insurers aren’t the only ones affected. So are physicians and providers. Have you ever wondered why there are so many people — and so many files — behind the check-in counter? The larger federal bureaucracy spawns a larger insurance bureaucracy, which then leads to a larger bureaucracy at your local doctor’s office, neighborhood clinic or hospital. They have to keep track of the ever-shifting regulatory landscape, too.
Which leads us back to higher costs. A lot of factors go into higher premiums, deductibles and co-pays, but one of the biggest contributing factors is all that red tape. And as the red tape gets bigger, the hikes grow faster. Last year, the average premium spike for Obamacare plans was 8.8 percent. Looking at 2017, some of Ohio’s largest insurers have proposed hikes that range as high as 13, 24, and even 39 percent.
I understand that it’s easy to blame insurance companies and doctors when we see these numbers. But we’re operating within a system that is beyond our control. Whether it’s Obamacare or any of the other examples of federal laws or regulations dictating how health care looks and works, the sad fact is that bureaucracy is to blame. Rolling it back is the best bet to reverse the trajectory toward ever-higher health care costs.
Paul Kempen, M.D., is a physician in Weirton, W.Va. and was an anesthesiologist at the Cleveland Clinic from 2008 to 2013.