Having Your Cake and Eating It Too

Have you ever wondered how anyone could possibly think that the Patient Protection and Affordable Care Act (PPACA) would lead to less health care spending?

Consider that the act is expected to (a) insure more than half the uninsured, (b) push most people with private insurance into more generous plans and (c) give just about everyone more generous preventive care. Doesn’t more insurance always mean more spending?

A big part of the answer is a little known change in PPACA on its way to final passage. In an obvious effort to keep the bill’s cost under control, lawmakers zeroed out all the funding for new doctors, nurses and other paramedical personnel. It doesn’t matter what extra benefits are promised if there is no one to deliver on the promises! Hence, the CBO’s low-ball spending estimate.

The problem is that groups with a special interest in health care — particularly the elderly and the disabled — noticed this sleight of hand and became alarmed. With a severe doctor shortage in the making, if your plan pays well below market rates you’re at risk of being pushed to the end of the waiting lines. And this has created a political hot potato for the White House.

The Obama administration picked up on this problem quickly. Ever since the passage of PPACA, it has been going to great lengths to assure anyone who would listen that it was leaving no stone unturned in an effort to create more medical providers — with or without the approval of Congress.

But hold on! You can’t both give people tons of extra health care and at the same time claim you’re holding down costs. It’s A or non-A, but not both. If the administration succeeds in creating more doctors, more health care spending is inevitable. My guess is we will be somewhere in between. We’re going to get some more providers; they are going to deliver more care; and spending will go up as a result. But we are not going to increase supply enough to prevent substantial shortages — much worse than we have today.

If government estimates are correct, as many as 34 million uninsured people will acquire health insurance. If economic studies are correct, these 34 million people will try to double their consumption of health care. In addition, another 70 million people or so are likely to acquire health insurance substantially more generous than what they have today. Moreover, most of the remaining 200 million people will be entitled to preventive services without copayments and deductibles they pay today. They are going to expect annual physicals, mammograms, Pap smears, prostate cancer (PSA) tests, colonoscopies and other services they -are not currently getting.

How can this increased demand possibly be satisfied? More than one in five Americans already lives in an under-doctored area. Moreover, a Duke University study implies that if all Americans get all the free preventive care promised them under the Affordable Care Act, family doctors will have to spend all their time on these tasks alone — leaving no time left over for all of the other things doctors do.

In response to this problem, a government Web site claims there will be 16,000 new providers by 2015. Yet Congress has never appropriated the funds to do that.

Apparently, Health and Human Services Secretary Kathleen Sebelius plans to use $250 million targeted for “prevention and public health” in the PPACA to instead train 500 physicians, 600 physician assistants and 600 nurse practitioners. Also, she plans to use an additional $500 million of “stimulus” money available under the American Recovery and Investment Act. Yet even if Congress allows these decisions to go forward, the additional supply will still fall way short of the 16,000 figure (which appears to count students who are already in medical school and will largely replace doctors who are expected to retire).

Meanwhile, the Association of American Medical Colleges predicts a 21,000 primary care physician shortfall by 2015. The Health Resources and Services Administration estimates a short of between 55,000 and 150,000 physicians by 2020 — and that was before health care reform passed! The state of Texas is predicting a nurse shortage of 18,000 by 2015 in that state alone.

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis.  He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system. Dr. Goodman’s Health Policy Blog is considered among the top conservative health care blogs on the internet where pro-free enterprise, private sector solutions to health care problems are discussed by top health policy experts from all sides of the political spectrum.