Growls

In his book, “That’s Not What We Meant To Do,” published in 2000, Steven Gillon discussed how major governmental reforms such as the federal welfare reform policy of 1935, the community mental health act of 1963, and the immigration act of 1965, among  many others, “all fell victim to one of the most immutable rules of nature, the law of unintended consequences, which states that you cannot always predict the results of purposeful action,” as Gillon writes in the introduction.

That sure appears to be what is happening to the recently passed health reform legislation, the Patient Protection and Affordable Care Act (Public Laws 111-148 and 111-152), that was jammed through Congress. Guess that’s what Speaker Nancy Pelosi meant when she said Congress needed to pass the bill so the people could find out what was in it.

Gillon can now add ObamaCare to the list of 20th Century reforms, which met the law of unintended consequences that Gillon writes about in his book. A "must read" op-ed by Scott Gottlieb in yesterday’s Wall Street Journal describes how, “Insurers and doctors are already reshaping their businesses as a result of Mr. Obama’s plan.” Gottlieb, a fellow at the American Enterprise Institute, explains:

“The health-reform law caps how much insurers can spend on expenses and take for profits. Starting next year, health plans will have a regulated "floor" on their medical-loss ratios, which is the amount of revenue they spend on medical claims. Insurers can only spend 20% of their premiums on running their plans if they offer policies directly to consumers or to small employers. The spending cap is 15% for policies sold to large employers.”

Gottlieb explains these restrictions this way:

“Restrictions on how insurers can spend money are compounded by simultaneous constraints on how they can manage their costs. Beginning in 2014, a new federal agency will standardize insurance benefits, placing minimum actuarial values on medical policies. There are also mandates forcing insurers to cover a lot of expensive primary-care services in full. At the same time, insurers are being blocked from raising premiums—for now by political jawboning, but the threat of legislative restrictions looms.

“One of the few remaining ways to manage expenses is to reduce the actual cost of the products. In health care, this means pushing providers to accept lower fees and reduce their use of costly services like radiology or other diagnostic testing.

"To implement this strategy, companies need to be able to exert more control over doctors. So insurers are trying to buy up medical clinics and doctor practices. Where they can't own providers outright, they'll maintain smaller "networks" of physicians that they will contract with so they can manage doctors more closely . . . .”

The effect, Gottlieb explains, is that “doctors owned more than two-thirds of all medical practices” in 2005, but by 2011, “more than 60% of physicians will be salaried employees.” Just another "unintended consequence" of the good intentiond of our political elite?

Below is the cover for Steven M. Gillon’s book, “That’s Not What We Meant to Do: Reform and its Unintended Consequences in Twentieth-century America,” which is available at Barnes & Noble. A good way to keep up-to-date on what is happening with health reform includes the Heritage Foundation's blog, The Foundry, whcih reported last week that repeal is proceeding.