NCPA - National Center for Policy Analysis

House Republicans Working to Craft ObamaCare Alternative

April 29, 2013

Republicans are building consensus around an alternative to ObamaCare that will hopefully lead to the bill's revocation. Rising costs following the initial stages of ObamaCare implementation demonstrate that the necessity for reform is greater than ever, says Joel Gehrke, a commentary writer for the Washington Examiner.

  • In 2009, an estimated 30 percent of health care spending was money wasted, totaling over $750 billion, including $210 billion for unnecessary services and $190 billion for excessive administrative costs.
  • To reduce costs, Republicans are coalescing around two ideas: reducing the third-party payment system in health care and providing patients with additional information related to health care quality and cost.
  • ObamaCare furthers the current third-party insurance system by forcing more of the uninsured into the exchanges to receive insurance coverage.

John C. Goodman, president and CEO of the National Center for Policy Analysis, says that Americans mainly pay for the care the same way people all over the developed world pay for care at the time they receive it -- with time, not money.

  • Because the third-party payment system isolates patients from actually paying the bills they incur, doctors do not compete on the basis of price.
  • According to Goodman, when price is irrelevant, patients tend to use more services and doctors have no incentive to raise the quality of care.
  • The third-party system also limits access to care by ensuring that services are only covered and paid for when they meet third-party standards.

To lower spending, Medicare will have to reduce fees paid to doctors, hospitals and other providers, which will force many seniors to visit community health centers and the emergency room of safety net hospitals for care.

Source: Joel Gehrke, "House Republicans Laying Groundwork for ObamaCare Replacement," Washington Examiner, April 25, 2013.


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