Too Big to Succeed

By Greg Scandlen

After TARP, we’ve all become familiar with the idea of “too big to fail,” that is, some companies are so large and so critical to the economy that they cannot be allowed to fail. But ObamaCare showed us what “too big to succeed” looks like.

The Great Debate on ObamaCare has become a model for how not to pass legislation or develop social policy. There were so many versions and iterations of all the different bills and amendments that it became nearly impossible to discuss any of it. CBO kept scoring this, that and the other, and it was hard to match up the particular CBO score with the right bill or amendment, let alone compare specifics.

Yet every provision was critically important, and not just by itself, but how it interacted with the other provisions.

It felt like a shell game, and it is small wonder people got edgy about the whole enterprise. Too many moving parts, too little clarity, too much rhetoric and jargon, and all tainted with political ambitions.

We got way beyond what the legislative process is capable of doing. There was literally no one in Washington who knew what it is they were voting on, so they all voted for the narrowest of political reasons or personal ambitions, not any real understanding of the consequences. To the point that even Newsweek’s Evan Thomas is saying, one year after the bill passed, that “it is a disaster, it’s not working out at all as people anticipated.”

It would have been far better to take all the topics one bite at a time, by which I mean separate bills for:

  • Medicare payment reform
  • Insurance regulation
  • Assistance to the needy
  • Management technology upgrades
  • Workforce initiatives
  • Quality improvement initiatives
  • Professional liability reform

Each of these is complex by itself. Blending them all together into a single bill was simply impossible.

For example, I concede that we need to fundamentally overhaul the regulatory regime currently in place for insurance. Each state has completely different statutes for the individual, small group, and large group markets. Some states have separate regulations for Blue plans, commercial companies, and HMOs. Then ERISA exempts self-funded employers from any state regulation at all. Regulatory reform is an enormous challenge all by itself and the current law is way too vague on how, or even whether, that is supposed to happen. As a result, Kathleen Sebelius is free-lancing on all of it, with no boundaries or clarity. If she thinks a rate increase is “unreasonable” she will punish the insurance company. But how does she define unreasonable? No one really knows except she seems to have picked 10% out of the air for the moment. Is she even concerned about company solvency, reserves, accounting, investment practices?

She gives companies and unions waivers so they don’t have to comply with the loss-ratio standards in 2011. But what is the basis for the waivers? How does one company qualify while another one doesn’t? Nobody can say, so it appears it is based on political favoritism.

Or take the workforce issue. We are facing substantial shortages of primary care physicians and nurses as the Baby Boom generation retires. Expanding insurance coverage will aggravate the problem. Plus there are new technologies coming on-line all the time. How do we get enough technicians to run the machines?

It is not just a matter of giving scholarships to med students or opening more slots in dental schools. The whole licensure and oversight regime currently in place needs to be re-examined. Everyone who looks at it concludes it is a mess. Why at least could there not be interstate reciprocity for licensing and disciplinary actions? Why can’t a physician who is licensed in Arizona prescribe drugs for patients in New Mexico? Or how is it that a doctor who is disciplined in one state can set up shop in the adjoining state?

And on, and on, and on. Because this thing is so big, we are not paying enough attention to the critically important REAL issues.

Let us hope that the new Republicans will get serious and develop legislation to address each of these issues – one at a time.