The Death of Health Insurance?

If a Kinsley Gaffe (as defined by journalist Michael Kinsley) is a truth told accidentally, then perhaps an Emanuel Gaffe is a lie revealed belatedly, after the damage is done.

Consider the recent New York Times essay by Ezekiel Emanuel, bioethicist, professional idea man, and former adviser to the Obama administration during the health reform deliberations that eventually became the Affordable Care Act.

His thesis: that "by 2020, the American health insurance industry will be extinct," replaced by accountable care organizations (ACO). Since ACOs are groups of providers who'll take the risk of covering thousands of lives, he argues, and will do so by accepting capped payments per-patient, the insurance industry and the fee-for-service model it administers will quickly become obsolete. ACOs "will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures," he writes, and they'll be paid directly by employers and Medicare.

Perhaps, but how much money will they make? More or less money than they make now, under fee-for-service? If less, what is the incentive for hospitals and health systems to form and maintain ACOs, since there is no requirement that they do so? If more, how does that "bend the cost curve down," as reform is supposed to do? Moreover, can ACOs succeed in forming equitable models for distributing revenue among their own providers, which will be necessary for their cohesion? Is it even possible for them to "keep people healthy," as Emanuel says they will, given that health is mainly a matter of patient (not doctor) behavior? And how does this idea of a world without health insurance companies square with President Obama's repeated claim that under his plan, anyone who likes their current health plan can keep it?

Indeed, Emanuel's hyper-confidence in ACOs' ability to solve all of our healthcare problems is Pollyanna bordering on laughable, and his cavalier prediction of the extinction of the entire American health insurance industry (within just eight years!) betrays an abhorrent disregard for an honest democratic process.

When reform was being debated, many critics were skewered for positing a Trojan horse theory: the idea that the reformed model would look (at first) like the current employer-based system, while stealthily designed to destroy it. At the time, that allegation struck me as a stretch. If you're trying to destroy an industry, force-marching millions of Americans into buying its products is a funny way to go about it. In fact, the reason I opposed the ACA is that it locks the hopelessly anachronistic employer-based insurance model in place forever, by requiring everyone not already covered by a government plan to purchase one on the private market.

And yet Emanuel's essay indicates that the Trojan horse theorizers may have been right all along: Even if the ACA won't destroy private insurance, Emanuel suggests that the reform's authors and backers (most especially the president) are hoping and expecting that it will. Conveniently, Emanuel makes no mention in his essay of his old boss's promises about keeping what we like, nor does he say whether he privately predicted then what he's publicly predicting now. In any case, had Emanuel mentioned this theory publically before the reform bill was passed, it would have undoubtedly jeopardized its chances by illuminating its true purposes: the death of private healthcare. Wisely, and cynically, he waited.

Bob Keaveney is the editorial director of Physicians Practice. Do you think health insurance is going the way of the dinosaur? Tell us about it at bob.keaveney@ubm.com. Unless you say otherwise, we'll assume that we're free to publish your comments in upcoming issues of Physicians Practice, in print and online.

This article originally appeared in the March 2012 issue of Physicians Practice.