By Brian Bearden, TSB Contributor
Going to a doctor or hospital for medical care will change dramatically in the next few years, said Dr. John F. McCracken, a clinical professor of healthcare management at the University of Texas at Dallas.
McCracken (pictured) told the Rotary Club of McKinney that the Affordable Care Act – nicknamed “Obamacare” – won’t be the real reform coming to health care.
“The real reform is the end of fee-for-service. There is a train wreck coming,” McCracken said. “You are going to be witness to some dramatic changes. Not Obamacare, but what it will lead to …”
Change in workplace: McCracken said employers will have a change in attitude toward employees as health care becomes more of a taxing subsidy program instead of a voluntary benefit offered to retain employees.
“This is the revolution – payment reform. Obamacare simply brings the reforms faster,” he said. “Fee-for-service is in its twilight years. Doctors and patients will have to change to a new type of payment program, and patients and the practices of doctor’s could be lost in the shakeup.”
The UTD teacher predicts bundled episode-based payments will take the place of fee-for-service.
“Everyone has been to the hospital and received six or seven bills,” he said. “Bundled episode-based payments are coming and coming very rapidly. That will create the organizational reform. That is going to be horribly disruptive to doctors.”
Delaying the outcome: Professor McCracken said he expects Congress to stop a meltdown by turning to its usual way of handling problems just before it is too late.
“When you get to the end of the road, Congress brings out the graders and extends the road,” he said.
McCracken said the problem patients have now is much like buying a car.
“In medicine, the parts are great,” he said. “The problem is as a patient that you have to assemble them in the garage. That’s the reason 5 percent of the population consumes 50 percent of the money spent on health care each year.”
McCracken said health care payments will become more like buying a car, too. Car buyer makes one payment, and the money finds its way back to the people who developed, manufactured and sold the vehicle.
Surprises ahead: The fit 70-year-old professor said that many Americans now believe health care will be free with “Obamacare.”
“It is not,” he said. “Most people have no idea it is coming.”
More Medicaid? McCracken, who teaches courses on the American Healthcare System and Managerial Economics, said the government plan calls for more Americans to receive health care through Medicaid.
He said trying to obtain health care through Medicaid can be defeating for a patient, adding that’s why many fall into the 19 percent without insurance.
He said half the population spends less than $800 a year on health care. Five percent spends half the money each year on health care.
“It is one of the most difficult programs to get, and it is one of the more obtuse programs.”
He forecasted that doctors face a situation where they won’t be paid enough to keep their practices open. Patients face a shortage in doctors.
While the median income for Americans has risen by $22,900 in recent years, that growth in income has been absorbed by taxes and non-health care inflation. That leaves $1,140 out of the $22,900 available for discretionary incomes.
Obamacare only helps the 19 percent of the population without health insurance now, McCracken said, which creates a big problem ahead.
As Medicaid grows, the costs will outrun the money brought in by taxes. In 2010, employees paid $899 on average toward the cost of single coverage in an employer plan and $3,997 for a family of four. The poverty level in 2011 was $22,350 for a family of four.
Get covered or pay a penalty: Under the Affordable Care Act, people are required to obtain coverage or pay a penalty.
“Most people have no idea they will have to buy health insurance,” he said.
Growing concern: In a few years “all tax revenues are consumed by entitlements and interest on the debt,” McCracken said, adding that Obamacare offers (1) an individual mandate, (2) an employer penalty, (3) health insurance exchanges and (4) Medicaid expansion.
“What are employers going to do?” McCracken, the founding director of the Alliance for Medical Management Education, asked. “Employers are like birds on a wire,” he said. “They are waiting for someone to fly off the wire and then see which way they go.”
McCracken holds a bachelor’s degree in economics from Southern Methodist University in Dallas, a master’s in economics from the London School of Economics and a doctorate in finance from the Wharton School of the University of Pennsylvania.
McCracken said that Obamacare (Affordable Care Act) would speed up a crash that leaves patients and doctors in a state of confusion sooner than later.
“Obamacare is an insurance bill,” McCracken said. “It is not a health care bill. It only deals with this 19 percent.”
The former professor at the Columbia University Graduate School of Business has experience serving on the boards of hospitals, physician-hospital organizations and managed care organizations, and advisor to several large physician group practices.
Problems in the Act: He told the McKinney audience that the Affordable Care Act regulations are full of mistakes.
McCracken’s Alliance for Medical Management Education serves as a strategic partnership between the UTD School of Management and The University of Texas Southwestern Medical Center at Dallas.
He said Americans will go from employment with voluntary benefits to a system that can be viewed as a taxing subsidy program.
“Because this is highly partisan and highly divisive, no one wants to go back and open the law,” he said. “There are a lot of mistakes in it.”
McCracken said that Medicaid is the biggest line item inmany state budgets and that many states can’t afford an increase in spending.
American way: Much of the money spent on health care comes in the final years of a patient’s life.
“America is the only country that spends that much on end of life care,” McCracken said, adding that taking care of people is an American value while other countries don’t devote medical resources in the same way to “end-of-life” medical needs.
Texas Medicaid Program
Affordable Care Act timeline