Where Obamacare Failed

Author's note: The term "Obamacare" is used here to describe the Patient Protection and Affordable Care Act of 2010, and is not meant as a derogatory term. The White House has embraced "Obamacare," and in the interests of brevity and clarity, we do too.

Obamacare will cause controversy no matter what's said about it, and is likely to continue as a source of controversy long after the Supreme Court renders its decision this Thursday. Some say it goes too far. Others say it doesn't go far enough. Everyone, it seems, has a strong opinion.

Well, I've got my hip boots on, and I'm ready to wade into the muck. The title of this article might lead you to think I'm here to tear the law down piece by piece, but that's not the case. Instead, I'll offer three things Obamacare could and should have done, but didn't -- possibilities most have ignored while focusing on the law's most glaring flaws.

First failure: No tuition reform for doctors
The American medical industry has had no problem staffing up over the years. In fact, the sector has become so large that it may pose a threat to American prosperity. If the industry has a weak link, it's the most vital one -- there aren't enough doctors. It's not easy to get an MD, and any sensible health-care reform effort should have worked hard to strengthen that weakness. Obamacare, unfortunately, does nothing to address this critical issue.

Few professions have as beneficial an impact on the nation as doctors. Obamacare stymies their efforts with bureaucracy without making any effort to bolster their ranks or their morale. It's not easy to become a doctor -- nor should it be -- but the pursuit of that profession should garner more support from a law that places so many burdens on their shoulders after graduation. Consider that a doctor who graduates medical school today in the United States does so with an average student loan debt of $158,000.

Doctors in the United States tend to make far more than doctors in other countries, but considering the debt they pile on in order to reach professional practice, it's not all that surprising. How easy would it be to lighten the load? In the past decade, 161,698 doctors have graduated medical school. Forgiving all student loans to these graduates would cost the nation about $25.5 billion. That might seem like a lot, but Americans spent nearly $2.5 trillion on health care in 2009.

Forgiving a decade of loans to doctors would cost us one percent of our annual health-care spending, and when matched with a cost-reduction promise, the returns could amount to several times the investment. Easing the burden of the nation's doctors would also help attract brilliant, talented people who might have otherwise followed the lure of comparatively "easy" money into lawyering or an MBA.

Second failure: No benefits or subsidies for healthy living
Ask any fitness freak why America's health-care costs are so high and they'll be sure to tell you: It's the lifestyle, stupid!

The costs of unhealthy living place an enormous drain on the country's health-care resources, from the ravages of obesity to weakness and fragility brought on by a lack of movement. Government policies do nothing to ease the strain. Instead, we pour billions of dollars each year into subsidies for corn, which is then processed by the ton into virtually everything you eat. The cost of these corn subsidies is multiplied many times when unhealthy eaters become burdens on the health-care system.

The other side of this fat coin is the way we move -- or rather, don't move. The problem begins early, as only 4% of elementary schools and 2% of high schools mandate daily physical education classes. Far more schools have some P/E requirement, but few students are as active as they should be. Only 29% of high school students get an hour of physical activity every day.

The problems continue into adulthood, when many people take jobs that keep them stuck at desks every day. A shift to a more sedentary lifestyle has far-reaching health effects, not least of which is added weight. Work-related calorie burn has decreased by about 140 calories a day since the 1960s, which over time adds up to an extra 28 pounds of flab per person, according to a wide-ranging study publicized last year in The New York Times.

Eliminate corn subsidies, encourage the farming and sale of unprocessed fruits and vegetables, and establish stricter and more consistent exercise guidelines for the nation's public schools. While we're at it, why not offer businesses tax breaks to encourage healthy living among their employees? America's relationship to diet and exercise can have tremendous effect on national health trends, but few politicians want to talk about it. There's no need to force people to buy broccoli, but well-constructed inducements can make broccoli a better buy for families than a Big Mac.

Third failure: No forward-thinking health records database
The hip boots are pulled all the way up for this one. What we need is a national health records database containing everyone's medical history, including a full genomic sequence.

Efforts are already under way at both national and treatment levels to consolidate records electronically. The 2009 stimulus bill contained provisions to establish electronic health records, which are now being implemented by at least three-quarters of the nation's hospitals. This will help consolidate information and ease its flow across providers, which could go a long way toward eliminating bureaucratic redundancies and unnecessary costs.

What we need now is more information -- genomic information. I'm not saying this just because I want to drive business to Life Technologies (Nasdaq: LIFE  ) and Illumina (Nasdaq: ILMN  ) , although such an effort certainly would benefit these two sequencing pioneers. Cracking the mysteries of the genome is the next great step forward in medical science, and the more data gathered, the better.

Privacy advocates will no doubt recoil from this idea, but let's consider how much of your information is already out in public, and how much more useful that information might be to hackers than the knowledge of your genetic code or the fact that you had heartburn for a month back in '93. It's easy to talk about "big data" when it tracks frivolous things like browsing and purchase histories, or when used for purely corporate reasons such as optimizing the layout of a store or a website. Why not use big data to make America, and the world, healthier?

Creating a national genomic database might not be as costly as you might think. The cost of full genome sequencing is dropping so rapidly that it should be under $100 by 2016. At that price, sequencing every American would cost about $30 billion a year, still a small fraction of the cost of our annual health-care splurge. That data could be run through medical analytics to create far more effective and more precise treatments than those we have today. Matching medical histories to genomic information across many millions of individuals would unlock a wealth of data the likes of which medicine has never seen. In pursuit of big data, there's no bigger prize -- to improve everyone's health to its furthest possible extent.

Final thoughts
Transforming health care won't be easy, and these are just three issues that I think Obamacare fails to address. You may very well feel differently. Maybe the answer is for government to provide nothing and to stay out of our way. Maybe everyone should be covered by the same public health care program. Maybe the answer, as usual, is somewhere in between. Whatever your opinion, I'd love to hear it.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. Motley Fool newsletter services have recommended buying shares of Illumina. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (20) | Recommend This Article (12)

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  • Report this Comment On June 27, 2012, at 5:26 PM, boogaloog wrote:

    I won't argue with any of the points you made, but I don't think these are the reason why Obamacare 'failed'. I fully believe the blame fully lies with the Republicans. And before anyone starts throwing out a bunch of 'libtard', etc insults, I used to vote Republican. But I can't lately with what I've seen from the current crop.

    Why do I blame the Republicans? Because I believe Obama would have signed just about anything that came across his desk. And instead of getting involved and compromising, all the Republicans did was obstruct. So the Dems had to do some crappy deals to get the 60 votes they needed. I still remember the scene of one Senator (Congressman?) holding up a thick wad of papers and waving them in response to Obama syaing they had no alternatives. What, exactly, was in that wad of papers? Probably nothing, since I never once heard their alternatives ... even on Fox News. Republicans had an opportunity to shape Obamacare, and chose instead to obstruct and complain.

    I'll be happy to vote Republican again someday, but not with the current obstruct-at-all-costs partisan shenanigans.

  • Report this Comment On June 27, 2012, at 6:08 PM, rgon1969 wrote:

    Got to agree with boogaloog on the point that our Congresspeople are more interested in their own party politics than they are Americans in general. That comment should go to both the Republicans and the Democrats, however. This is one voter that thinks it is time for a real change. Term limits should be invoked on Congress as well as the President. The founding Fathers did not foresee that we would have life long politicians. Truly great things could happen in this country if we could elect men and women with positive business experience. Then, after a few years, they could go back to the private sector to be replaced with people of more current positive business experience. How can we long survive with birth to death politicians who are more dedicated to re-election than they are the betterment of America's financial, social, and medical health?

  • Report this Comment On June 27, 2012, at 6:16 PM, topbeancounter wrote:

    In spite of the criticisms above, I think this is a really well thought out article. I have some other ideas, but the ones shown definitely have merit.

    As far as the GOP continuously blocking everything and anything, anyone with even half a brain knows that it's true. How do I know that? Because the GOP leaders continue to state that simple fact to me and everyone else, them blame him when nothing gets done.

    I ceased being a die hard member of the GOP when I realized what the great communicator was doing to this country near the end of his first term. I was crushed. My family had always voted Republican.

    The thing I just don't understand is how so many folks are so blind, driving around their ten year old pick up truck, appearing to be a couple of paychecks short of being homeless, yet having some sticker suggesting I vote Republican. Wow. Guess why our education system ranks so low in the world. They simply don't teach you how to think.

  • Report this Comment On June 27, 2012, at 6:18 PM, zontar100 wrote:

    I am also saddened by the Republican stance on this whole issue. It's interesting to remember that Mr. Gingrich and others came up with what we now call Obamacare in response to the Clinton's single payer. The then republican establishment embrassed the plan and it was adopted by some states. Alas! Poor Mr. Romney who thought he was doing the right thing with the full support of his party. Just another guy thrown under the Tea bus.

    Now on to the points above. Let's see, payoff all of the doctor's loans, subsidize healthy food, make a giant DNA databank for the medical industry to use. For point 1, there are plenty of doctors, the shortage is the GPs and especially the GPs in rural/low income areas. All the doctors go into speacialty work where the money is. I think there is some incentive for docs. to become GPs, maybe that should be the focus. I'm all for getting rid of corn subsidies - long over due. I'm not sure about the who DNA idea. In theory it sounds great but I am a bit wary.

    None of this really speaks to why Obamacare failed. Simple truth - it was politics...

  • Report this Comment On June 27, 2012, at 6:28 PM, PALH wrote:

    Boogaloog: you nailed it completely. And I am REALLY encouraged that the nitpicking of the article -- so far -- is coming from people who think Obamacare is well-intentioned but compromised legislation instead of the evil socialism its detractors say it is.

  • Report this Comment On June 27, 2012, at 6:34 PM, Zankudo wrote:

    The act also provides that monies be returned to policy holders over 15% which is the max for insurance company profits and costs. On the other hand, the law was a boon to the companies in that everybody has to have insurance or pay later if they do not. In reality there is a choice. You needn't have insurance but you won't get a free ride if you later just show up at the hospital needing care. Thus, the mandate is really a false issue. It is a choice after all. Beyond that, health care costs are the problem, and like any other commodity that is a monopoly it should be regulated. Term limits are a fine start but what the country requires is a new constitution which removes the outsized power small states wield over others. 11% of the population due to the fact that each state has two senators, which was the price of ratifying the constitution, have about 40% of the power. The Republicans...shrill, power-hungry, wrong, regressive, and as a whole getting crazier by the day. Having created a mess of the economy under Bush where they rubber-stamped everything and put two wars and a drug bill on credit while cutting revenues with the asinine tax cut, they only want to double down on their stupidity. Romney's tax cut falls under the same moniker: nuts.

  • Report this Comment On June 27, 2012, at 7:13 PM, Eliz1000 wrote:

    Have you read the book "Throw Them All Out." It shows with lots of research that Congress is watching the balance sheet (their own). Why would all these members want to stay in control for so long, its the insider trading that they gladly take advantage of. There is so much money exchanging hands for the right voting record. Why else would these bills be so impossibly long but to hide all the special consessions given to the lobbiest as the congressman takes a gift of stock which will soon appreciate. This is lawful for congress members. That's why ordinary people are viewed as stupid! We let them do this to our country's disadvantage.

  • Report this Comment On June 27, 2012, at 7:33 PM, divybuy wrote:

    Everyone of the politicians who voted for/against did not even read it. When you have Pelosi saying,"we have to pass it so we can find out what is in it." This is the speaker of the house. And we wonder why we are in trouble.

  • Report this Comment On June 27, 2012, at 8:18 PM, ledgeuno wrote:

    I think that the key point you left out where the health care plan fell short is cost containment. I suspect they didn't even really attempt to address this because it would have been impossible to pass anything. You did note the lack of an emphasis on preventive care/lifestyle issues, which is certainly critical. But where is the incentive to change the system? the pharmaceutical companies have a very strong interest in keeping the emphasis on using drugs to treat symptoms, and many health care providers continue to be paid not based on outcomes, but on the treatments they provide.

  • Report this Comment On June 27, 2012, at 9:22 PM, GETRICHSLOW2 wrote:

    All rIdiculous arguments! The Federal government has no authority to be involved in healthcare or to force Americans to commit an act of commerce so they can be regulated. If they did, why did we even need a Constitution? They have unlimited power to force upon us anything they wish? There was a reason why the powers granted were specifically listed.

    Either amend the document or abide by it's present form.

    IT IS THE LAW!!!!

  • Report this Comment On June 27, 2012, at 9:50 PM, bebop111 wrote:

    Everything you mention could be written into other legislation; it's difficult enough to get health reform passed without additional provisions. Also, I'm not at all sympathetic to forgiving student loans to doctors unless we do the same for those with much lower incomes! We need politicans to find a way to cap education costs, instead of playing with the debate over doubling student loan rates. Look at who has held that up this past year...

  • Report this Comment On June 28, 2012, at 1:16 AM, joandrose wrote:

    I have enjoyed reading this very interesting exchange of viewpoints on "Obamacare". Lots of good stuff...

    rgon1969 - your suggestion re term limits for professional congressmen is one of the best and most thought provoking responses coming out of this item on Obamacare

  • Report this Comment On June 28, 2012, at 8:03 AM, iksrog wrote:

    All the hate towards Republicans is unwarranted. They offered up three big ideas that would've made this bill stronger, but the Dems (who controlled congress at the time) were more concerned to protect their 'constituents' than offering up a good bill.

    1. Tort reform was offered up by a bi-partisan group, blue dog Dems and Repubs. Not in the final bill.

    2. Cross state purchase of health plans- again, not in the final bill.

    3. Creating a 4-6 year doctor commitment towards general practice or internal medicine for forgiveness of school debt.

    All shot down to protect trial lawyers, state policy (keep the business in the state), and large hospital interests. It amazes me how Repubs are often held up as slaves to the corporate world, yet Dems are just as deep if not more with the same crowd. And how they are tied to the trail lawyer lobby-well don't get me started. I say, a total free market on healthcare with total Tort caps and get the government out!

  • Report this Comment On June 28, 2012, at 8:09 AM, MrsCathyGF wrote:

    Good article. It goes back to the fundamental premise, how, what, and why we can better the US Healthcare System without some gov't mandate. If given a chance to be recognized and heard, some offered up some good ideas, like the Health Savings Accounts. That puts control into american workers' hands, and can be varied. Still, some smaller gov't program can be setup to serve the needs of the small % of american population who struggle with healthcare. We cannot afford to pay for the healthcare of 300+ million citizens.

  • Report this Comment On June 28, 2012, at 10:32 AM, overley wrote:

    iksrog is right on target. There was no tort reform, no incentive to produce more primary care physicians, no improvement in competition among insurance companies. If you want more universal coverage, tie health insurance with a drivers license. If you want to drive, you must have health insurance. Use our system of health departments and community health centers more effectively to care for the un- and under insured. Obamacare was a gift with the drug companies and health insurers.

  • Report this Comment On June 28, 2012, at 11:04 AM, CluckChicken wrote:

    Is Obamacare perfect? No. I do not think anybody has ever stated that it was. This is a great start on the path to fixing the mess that is this country's healthcare system. All the ideas above can still be worked and should be worked on. There are other things I think need working on as well such as a more open review system for doctors (which should impact insurence costs for them and also impact tort).

  • Report this Comment On June 28, 2012, at 11:04 AM, starfish36 wrote:

    There were lots of things that might have been included in Obamacare, and if Republicans had participated in drafting the legislation rather than simply obstructing it, perhaps it would have been better. Getting it almost any legislation through Congress these days is a very tough job. The Democrats took what they could get passed. The legislation can be amended, of course, just as Social Security legislation and tax laws have been amended. But Republicans are likely to dedicate themselves not to amending it but to trying to repeal it.

  • Report this Comment On June 28, 2012, at 11:30 AM, actuary99 wrote:

    I think saying the law does nothing to address tuition costs for doctors-in-training is misleading.

    (1) PPACA established the National Health Service Corps, a program of loan repayment for clinicians who choose to work in medically underserved communities.

    http://nhsc.hrsa.gov/

    (2) PPACA has other provisions lifting the burden of debt on physicians in training, including public debt forgiveness, implementing a maximum re-payment term of 25 years, capping monthly debt repayments at 15% of household income, tax exemption for doctors qualifying for loan forgiveness programs, etc.

    http://www.familydocs.org/communications/cfp-magazine/01/11/...

    (3) PPACA substantially increased Medicaid and Medicare reimbursement for primary care doctors, making loan repayment easier.

    http://www.kff.org/healthreform/upload/8061.pdf

  • Report this Comment On June 28, 2012, at 2:56 PM, vebb wrote:

    The law was badly written, financially a fairy tale( able to deliver health care for more and cost less) and completely removes all future choices for treatment from anyone who participates. Your analysis is correct and I would add one HUGH thing. Cap litigation. Finally , I am a career health care provider and the general public does not understand that once these health care choices are given to the one central government system they will never be ours again. I believe if every person was given a lifetime stipend or HSA model to spend on healthcare , each person would then and only then decide to be responsible for their own health.

  • Report this Comment On July 14, 2012, at 5:28 AM, thidmark wrote:

    I'll tell you one major flaw with the bill -- it won't apply to Congress. It'll keep its taxpayer-funded super care while were stuck with this gawd-awful abomination. But the public (as evidenced by some of these asinine comments) is too stupid to notice or care.

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