Painful Choices: Why The GOP Health Plan Had To Fail

Pain is a more powerful emotion than pleasure. Loss has a far greater impact on the human psyche than gain. For these reasons, the Republican plan to “repeal and replace” the Affordable Care Act (ACA) had to fail. And if our nation fails to reform the healthcare delivery system, as well, the impact will be even more painful.

Seven years ago, not long after the ACA became law, the GOP reassured supporters that repeal would happen—that for the good of the nation it had to happen. In drafting their replacement plan, legislators embraced healthcare spending reductions as a path to lower taxes. As a result, each of the healthcare bills introduced this term would cause tens of millions of Americans to lose their health coverage.

Congressional Republicans underestimated the pain this would cause. Now, they’re the ones feeling it. With healthcare reform efforts in limbo, President Trump resolved last week to “let ObamaCare fail,” later telling White House reporters, “I’m not going to own it. I can tell you, the Republicans are not going to own it.”

No one can say when or whether those on Capitol Hill will make another attempt at repealing or replacing the ACA. But one thing is for certain. Reform or no reform, pain is coming. And for politicians, pain always has an owner.

The Source Of Pain 

Elected officials on both sides of the aisle recognize American healthcare today fails to deliver the quality and convenience patients deserve, especially given its $3 trillion annual price tag.

Healthcare today is dangerously expensive and inefficient, and will continue to be without radical change to the current system’s structure, financing and technology. For decades, these changes in care delivery have constituted the “third rail” of the debate, and few politicians have dared touch it. That’s because insurers, drug makers, national physician groups, hospitals and other institutional powers have openly, and effectively, lobbied against any legislation that would cause them financial harm.

This leaves the legislative process at an impasse. Unless care delivery is made more efficient, efforts to expand coverage, as Democrats desire, will demand higher taxes. And without delivery system reform, Republicans hoping to lower healthcare spending face the brutal reality that millions of people will lose coverage.

The Congressional inaction that resulted was predictable. The psychological literature demonstrates that the human mind, when confronted with a painful choice, undergoes a subconscious shift in perception that distorts objective reality. Our fear of pain or loss alters what we see, experience and do. Therefore, we default to what produces the smallest possible measure of short-term pain. We do nothing, idling under the illusion that today’s reality will be tomorrow’s, even though that’s almost never the case.

The Painful Truth Of The Republican Plan

The federal government spends approximately $1 trillion dollars annually on healthcare—one-third its total expenditure. Most of these taxpayer-funded dollars support three insurance-based programs: Medicaid, Medicare and subsidies provided through the online exchanges.

This spring, Senate Republicans looked to chip away at that $1 trillion with proposed cuts to Medicaid of more than $750 billion over the next decade, or approximately $75 billion a year. With an average cost per Medicaid enrollee of $6,571, the math is simple.

Divide the desired savings by the annual cost of providing Medicaid and you don’t need to wait for the bipartisan Congressional Budget Office (CBO) to run the numbers. An estimated 12 million beneficiaries will lose coverage. Add to that number those who would lose premium subsidies and cost sharing reduction (CSR) payments, and the count rises. Rescind the individual mandate—the law requiring patients to carry health insurance or pay a penalty—and the estimated sum of uninsured climbs to somewhere between 15 and 20 million under the GOP plan as healthier Americans exit the insurance pool. These outcomes are not opinion, they’re just the math.

These numbers guarantee pain for millions of patients and, in turn, failure for the Republican health bill, with little that can be done now to please the whole party. Cut back on the number of patients who lose subsidies and fiscal conservatives will balk at the diminished savings. Leave it as it is and moderate Republicans will bail. Split the difference and you lose support from both sides, which is exactly what happened last week when the Senate failed to bring the Better Care Reconciliation Act (BCRA) to a vote.

The Painful Truth Of More Efficient Care Delivery 

Most Americans understand that millions of people losing coverage would prove painful. What most don’t fully recognize is the pain that would come to millions of American workers and thousands of communities by lowering the cost of healthcare.

Today, healthcare salaries and drug costs account for approximately $1.7 trillion annually, comprising more than half of all U.S. healthcare expenses. It’s no surprise then that healthcare has become America’s fastest growing employment sector. Last month, the industry accounted for 34 percent of all new jobs in the United States.

In healthcare, the relationship between jobs and spending is undeniable. Over the past 20 years, healthcare costs have risen 2 to 2.5 percent faster than the Gross Domestic Product (GDP). Had the rate of healthcare inflation paralleled GDP over that time, we would not be facing a financial crisis. But there also would be millions of fewer workers employed in the healthcare industry than at present.

The economics and laws of the healthcare system defy the rules of almost every other service industry. Nowhere else do service providers have as much influence over demand and prices. And were healthcare to be forced to emulate the rest of the business world, many small and relatively inefficient hospitals would have no option but to close their doors. Doctors who do only a few complex procedures each year would be replaced by a smaller number of doctors with higher patient volumes and greater expertise. Pharmaceutical companies would lose their monopolistic control over pricing and see the cost of drugs plummet. The result would be more pain than people today recognize and far more pain than the industry would be willing to accept, at least for now.

The Path Forward

Because the human mind magnifies the consequences of pain and loss to a far greater degree than it values an objectively equivalent gain, it should be no surprise that American politicians failed to act on this round of healthcare reform.

In medical care, pain is accepted as a necessary first step in the healing process. Likewise, major healthcare reform would produce short-term pain for many Americans. There’s no way around it. But in the long-run, delivery system transformation would help us avoid the devastating and debilitating pain that will come if nothing is done.

As the cost of healthcare rises faster than our ability to pay, our system is marching toward a cliff. Without intervention, we will go over the edge. Contrary to election rhetoric, there is no single approach that mathematically supports expanded coverage, reduced premiums and continued job expansion. That is the economic reality, albeit a politically painful one.

In a series of future articles, I will offer a road map for the future of American healthcare, one that accepts the inevitability of pain but, over time, will maximize American health.

This article originally appeared on Forbes.com. The views expressed herein are those of Dr. Robert Pearl only and do not necessarily represent the views of Kaiser Permanente.