Life in the Petri Dish

In anticipation of what might be thought of as the official kickoff of ObamaCare on October 1, there are several articles out there with latecoming realizations about the implications of the law. Chad Terhune, writing in the LA Times, observes:

The doctor can’t see you now.

Consumers may hear that a lot more often after getting health insurance under President Obama’s Affordable Care Act.

To hold down premiums, major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state’s new health insurance market opening Oct. 1.

New data reveal the extent of those cuts in California, a crucial test bed for the federal healthcare law.

These diminished medical networks are fueling growing concerns that many patients will still struggle to get care despite the nation’s biggest healthcare expansion in half a century.

Consumers could see long wait times, a scarcity of specialists and loss of a longtime doctor.

“These narrow networks won’t work because they cut off access for patients,” said Dr. Richard Baker, executive director of the Urban Health Institute at Charles Drew University of Medicine and Science in Los Angeles. “We don’t want this to become a roadblock.”

Read the whole thing for the quantitative rather than just the qualitative implications. The editors of the Las Vegas Review-Journal are concerned about the same thing:

As reported by the Review-Journal’s Jennifer Robison on Sept. 12, Nevada’s insurers are expected to control the costs of dozens of coverage mandates by slashing the number of doctors and hospitals they contract with, creating what local employee benefits consultants call “skinny networks.”

If you like your doctor, and your doctor isn’t in your new skinny network, then guess what? You will not be able keep your doctor. Period.

Ms. Robison noted that it’s still not clear how skinny those networks will get, because plan designs won’t be available until Oct. 1, when the Silver State Health Insurance Exchange starts selling policies. That’s just 12 days away. And Nevada isn’t alone.

I don’t think they’ve realized the full set of implications. Assuming that the plan is successful, access to healthcare will increase. That, after all, is the purpose of ObamaCare. Physicians don’t have a lot of slack capacity. If anything, they’re overworked. If you increase access without an increase in capacity, it will result in price increases or some other form of rationing. It may also, as suggested in the linked article, actually reduce the supply of physicians, a perverse result if there ever was one. Crank in the “skinny networks” and you have the makings of a real crisis.

That’s been my concern about healthcare reform since it was being so hotly debated back in 2009. There’s an argument that the greatest problem in our healthcare system is excess demand but I think it’s inadequate supply and, sadly, healthcare reform as it was enacted into law did nothing whatever about supply. Except, possibly, decreasing it as the preceeding articles suggest.

Well, we’ve got a real-life experiment to test the hypothesis. Life in the Petri dish is fun, isn’t it?

20 comments… add one
  • ...

    Life in the Petri dish is fun, isn’t it?

    This is what you voted for, as I recall. So don’t start complaining now that you’re getting what you demanded at the ballot box.

  • jan

    There are anecdotal stories seeping out of people, businesses, doctors all finding ways to escape the implementation of the ACA. Early physician retirement and family medical offices turning to proprietary care are creating small voids here and there. Then you have small businesses firing or not hiring to keep their staff below 50, and big businesses such as Boeing, Trader Joe’s, IBM, Xerox, Land’s End cutting loose of supplying employee HC. Large hospitals, like Cedars Sinai in Los Angeles, are shunning Obamacare involvement entirely, while insurance companies such as Aetna and United Healthcare are leaving places like CA and simply refusing to become a part of the exchanges.

    These are but a few snippets being reported (not on MSNBC or the MSM, of course) that are tearing at the fabric of our healthcare system, leaving a greater population with ultimately less care. However, when you add them all up, there can’t help but be a shortage of both medical personnel and quality care available to the public. The rich will not be effected, because they can afford to go out of the mandated system in seeking costlier but more efficient healthcare. The middle class and poor, though, will be stuck with government care, along with eventual rationing and long waiting periods for appointments, surgeries and medical procedures.

    Basically, a crystal ball is not needed to predict the future when you take in the entire picture of what is happening to circumvent this continuing unpopular legislation.

  • sam

    “Large hospitals, like Cedars Sinai in Los Angeles, are shunning Obamacare involvement entirely”

    That’s false. It’s not Cedars doing the shunning, but the insurance companies — Cedars is too expensive.

    “while insurance companies such as Aetna and United Healthcare are leaving places like CA.

    Aetna and United are not leaving California, only the individual health insurance market in Calfiornia. Aetna and United will continue to sell Medicare, dental, and group plans in California. Aetna has a small footprint in the California individual health insurance market, about 49,000 subscribers. United’s footprint is even smaller, about 8,000 subscribers. These withdrawals don’t seem to me to be that big of a deal.

    As for large companies rearranging their provision of healthcare to their employees, that was going to happen anyway. The costs to companies are just to great. To suppose that this is happening because of Obamacare is a misperception of the situation.

    Finally, if Obamacare fails, as you fervently expect it to, I believe the next stop will be single-payer, with US companies in the vanguard of those demanding that “government do something.”

  • This is what you voted for, as I recall.

    Not exactly. I voted for Obama in 2008, largely on the basis of foreign policy (in which I’ve been somewhat disappointed). I don’t recall his running on a platform of never negotiating with the other party and passing major social legislation along strict party lines. If he had, I doubt I would have voted for him.

  • ...

    In 2008 Obama ran on the ideas of passing health care reform and in having been against invading Iraq in 2003. (Well, that and that unlike John McCain he didn’t want to go to war with EVERYBODY. Has McCain come out in favor of invading Canada yet?) I don’t recall him making a point, other than the usual pro forma “I’ll reach out across the aisle” BS, of passing healthcare reform legislation only if he got Republican votes.

  • I think that I and a lot of other people read it as much, much more than “pro forma”. Which would explain one of the reasons I didn’t vote for him in 2012.

  • ...

    Has there been a winning Presidential candidate in the last, oh, fifty years who DIDN’T promise to reach across the aisle? It’s about as hoary a campaign position at this point as being in favor of Mom and apple pie.

  • jan

    Ok Sam,

    Cedars is expensive, and a world class hospital as well. And, it will not be covered in Obamacare exchanges. This is true of ‘expensive’ doctors as well. In fact Blue Shield has said, it will have only 36% of it’s regular physician network available for the exchange plans in CA. I think in any other jargon this would be called medical austerity, or cutting back of doctor choice, wouldn’t it?

    I cited Aetna and United HC as pulling out of the exchange programs, which they are, dealing with people’s individual HC plans. Isn’t that what was being discussed? Cigna is also joining these two in Covered California federally mandated exchanges. Aetna has recently declared it is pulling out of NJ too. As the ACA unfolds, I think it will be unraveling at the same time, no matter how you want to parse it.

  • sam

    “I cited Aetna and United HC as pulling out of the exchange programs, which they are, dealing with people’s individual HC plans.”

    You wrote:
    “insurance companies such as Aetna and United Healthcare are leaving places like CA”

    Which they are not.

    “Aetna has recently declared it is pulling out of NJ too.”

    Which it is not.

    Aetna Inc. has withdrawn from the insurance exchange marketplace in New Jersey that was set up under the Affordable Care Act…

    In a statement last week, [Aetna] said the decision was part of its “ongoing review of Aetna’s overall company strategy, including the impact of the Coventry [Health Care Inc.] acquisition which closed in May, after the original exchange filings were submitted for both companies.” It stressed that it was “by no means leaving the NJ market, and will continue to sell plans to all group sizes as well as individuals outside the exchange.”[Source

    I understand that precision in expression is difficult for you, but try and make the effort.

  • Red Barchetta

    “I don’t recall his running on a platform of never negotiating with the other party and passing major social legislation along strict party lines. If he had, I doubt I would have voted for him.”

    I’m not trying to pull rank, or pick a fight, but this seems sanitized. I evaluate horseflesh for a living. Discounted cash flows, risk analysis, competitive dynamics….the manufacturing footprint. Blah, blah, blah. Its management talent. Its the people.

    This commenter, at least, saw this guy for what he was, and called it out during his 2008 run. No Monday morning QB here. I hate it when I’m right. (A famous line in our firm.) I’m surprised, Dave, you did not. We both reside in IL. We know he was a pedestrian backbencher in the IL Senate, and Emil Jones’ bagman. We know how a messy divorce paved his way to US Senate victory. We know he did almost nothing in the US Senate……except run for the next office. No executive experience or talent. In fact, the perfect corporate ladder climber, what lefties claim to all hate. A good smile, reasonable intelligence, a smooth tongue, a good deflector of responsibility and collector of credit……. and slobbering backing from the media (Heh. Sorry, Hillary) and there you have it.

    I have issues with pols both Repub and Dem, but my god, we have to do better than this. Otherwise, you get ObamaCare and nearly complete shambles in governance.

  • Andy

    It’s not Cedars doing the shunning, but the insurance companies — Cedars is too expensive.

    I think we’ll be seeing a lot more of that and I think it’s a consequence of Dave’s point about a lack of capacity. Our rising income inequality with soon be matched with rising healthcare inequality.

  • Hierarchy of values, RB. McCain was just too darned bellicose. Still is. I didn’t have the choice between the perfect candidate or Obama. I had the choice between McCain and Obama and my evaluation is that issues of war and peace over which we don’t have a lot of control after they’re under way outweigh domestic issues over which we have at least a little control.

  • CStanley

    I’m not a fan of bellicosity either but the way I see it, the MiddlenEast will probably blow up before Obama’s second term and we’ll be dragged into it anyway, despite or possibly because he is nearly the opposite of bellicose.

  • Red Barchetta

    “Hierarchy of values, RB.”

    Before and after I wrote my comment I thought about that and wondered what your response might be. And that’s how I thought you might.

    McCain, I admit, is and was a tired and angry old man, with foreign policy views I simply find, uh, mixed. What a fine mess.

    I have a more robust view on what the president can do domestically. Witness this blogpost: ObamaCare.

    But I don’t think you have really addressed the issue. Obama had absolutely nothing to recommend him, despite McCain’s shortcomings. I hold no brief for John McCain, trust me. But Barack Obama is simply totally in over his head. I’ve seen this executive incompetency so many times before. I’ve made the mistake in hiring, probably twice. I cop to it.

    Obama is a total zero. No one wants to cop to it. But it is so obvious.

  • steve

    1) Docs are not retiring early. Don’t see it. Dont even hear about it. If anything, people are hanging on too long.

    2) Smaller networks is the market response to the need for cutting costs. More expensive providers will be dropped. This is being done by private insurers.

    3) We already have health care inequality.


  • Andy


    On #1, that’s true and not just for docs.

    On #2, the key question, IMO, is what happens to those expensive providers – will they be forced to lower prices? I guess we’ll find out.

    On # 3, I said rising health care inequality – meaning I think it’s going to get worse than it already is.

  • sam

    “On # 3, I said rising health care inequality – meaning I think it’s going to get worse than it already is.”

    What it already is is millions of folks without health insurance having to forgo health care completely or hieing themselves to emergency rooms for treatment.

    I’m curious, Andy, what is your criterion for health care inequality? How much more unequal can it get than what we have right now?

  • jan

    I understand that precision in expression is difficult for you, but try and make the effort.


    You gave me a laugh on that one. Precision? How can one be ‘precise’ when talking about the ACA? This is 2700 pages of originally unread legislation, now coupled with some 20,000 more pages of regulations that few want to get involved with, and far fewer even understand?

    More questions….

    You go on about Aetna, Cigna and others still writing policies for groups etc., and only bowing out of Obamacare exchanges. Isn’t that the financial crux of the program? How is the ACA going to function (well) with fewer hospitals or medical personnel becoming a part of the exchange programs, as more people supposedly have access to HC? Isn’t it also reasonable to believe that some natural unintended consequences will be longer waiting times, and eventual denial of treatment due to the necessity of prioritizing patients’ needs — aka rationing?

    Of course maybe the promise of insuring more people will fall as flat as have other promises from the Obama administration. According to this Forbes article, there may be even more people stranded without HC due to the ACA.

    Obamacare was pushed through on the promise of universal health coverage for everyone. But the CBO now scores Obamacare as leaving 30 million uninsured even 10 years after implementation!

    In fact, Obamacare will increase the uninsured rather than reduce them. Former CBO Chief Douglas Holtz-Eakin published a study in 2011 arguing that more than 40 million workers will lose their employer provided health insurance under the incentives of Obamacare. That is because employers can save enormous sums dropping the highly expensive, Obamacare mandated, employer health insurance, leaving their workers to gain the taxpayer subsidies on the Exchanges, and giving them a raise out of the savings to boot.


    I’ve heard interviews, read articles and personally talked to doctors leaving medicine because of discouragement over Obamacare provisions. Just because you haven’t doesn’t mean it isn’t happening in spheres you may not be privy to, nor, for that matter, might not want to recognize because of your own enthusiastic support for the ACA.

    People can argue about the pros and cons of the ACA. However, how it ultimately works out will be the so-called ‘proof’ of it’s merits or demerits. So far, with it’s one-sided passage, overall unpopularity, complexity and bulk, uneven roll-out, selective waivers to big business and Congress is, IMO, indicating it is an ill-devised kind of HC reform.

  • Andy


    So, you do think healthcare inequality cannot get worse? Do you believe it’s impossible for the PPACA to produce negative healthcare outcomes?

    Health care is not the same thing as health insurance and I’m talking about the former not the latter. Increasing health insurance doesn’t magically produce better healthcare. If you increase healthcare usage but don’t increase healthcare capacity, then there will be a reordering and, in aggregate, net “healthcare” could be worse. My point is that it’s far from certain that reordering will produce a more egalitarian situation than currently exists.

    Additionally, providers are “free agents” in that most of them can’t be forced to accept insurance or patients for routine care. If the demand for healthcare grows faster than provider capacity, then providers can be more choosy about who they treat. Like anyone else, they will follow the money.

  • steve

    Jan- All talk.They aren’t leaving. 2 or 3 people who were going to retire anyway don’t count. Follow the actual numbers not the talk.


Leave a Comment