Obamacare: Good Medicine, Bad Politics or the Other Way Around?

Jun 12, 2012 | The HWN Team | Insider

Insuring every U.S. citizen by 2014 is laudable but not by creating a bigger and more convoluted mess. However, there is a way out and it's next door!

Despite the combination of the U.S. President's name and the positive word "care" the term Obamacare has taken on an almost derogatory meaning. Officially it is called the Patient Protection and Affordable Care Act of 2010  and goes by other names, including Healthcare Reform, Affordable Care Act, and Health Insurance Reform. But is there actually a "caring" well-meaning side to Obamacare or is it just pure politics?1

Many people believe that the U.S. health care system is “sick” and needs resuscitation. But, doesn’t the United States deliver some of the best medical care in the world? And for heaven’s sake why would even Canadians cross the border for medical care when they already have a system envied by many? So, why Obamacare?

Too many people are uninsured

In a 2009 survey of 29 Organization for Economic Co-operation and Development (OECD) countries, basic health insurance coverage, “measured by the population covered, services included and the degree of cost-sharing – is substantial and fairly similar across OECD countries” except Mexico, Turkey and the U.S. where a large proportion of the population was not covered in 2009.2

“A person was defined as uninsured if he or she did not have any private health insurance, Medicare, Medicaid, State Children’s Health Insurance Program (SCHIP), state-sponsored or other government-sponsored health plan, or military plan at the time of the interview. A person was also defined as uninsured if he or she had only Indian Health Service coverage or had only a private plan that paid for one type of service such as accidents or dental care.” 

According to 2010 CDC statistics 18.2% of Americans, equivalent to 48.2 million people were without health insurance coverage. And as of 2012 it’s over 50 million. “In terms of ethnicity, 30.4% of Hispanics, 17% of blacks, and 9.9% of whites do not have health insurance".3

The System is way too complex

Developed industrialized countries including the U.S. (about 40 of the world’s 200) have established health care systems and there are basically four major types. T.R. Reid, a former Washington Post correspondent goes on to describe the 4 different health care systems globally, namely: 

The Beveridge Model - In this system, health care is controlled, provided and financed by the government through tax payments. It originated in Britain as reflected in the structure of UK’s National Health Service (NHS). In this model, health care is just like any other public service, like the police force or the public schools. Hospitals and clinics are public. The Beveridge Model is more or less the model used in Spain, the Scandinavian countries, New Zealand and Cuba.

The Bismarck Model - This system which originated in Germany uses a health insurance system financed by fees jointly paid by employers and employees. The fees normally depend on one’s income and are collected through payroll deduction. However, the health insurers are required to cover everybody, regardless of their income, thus even the low-income earners and the unemployed. Health care delivery may be public or private. The insurers do not make much profit and the government regulates insurance premiums. Aside from Germany, France, Switzerland and many European countries use this model, but also Japan and many Latin American countries.

The National Health Insurance Model - This model is a combination of the Beveridge and Bismark models adopted by Canada, Taiwan and South Korea. Health care is provided privately, but paid from a government-run insurance program to which each citizen contributes to. The government has quite some control over drug prices and treatments that can be covered.

The Out-of-Pocket Model - For most countries, especially the low income less developed nations, there is no established health care system, thus people pay for medical care out of their pocket. In this landscape, only those who can afford it get medical care, those who can’t stay sick or die.4

Whereas most developed countries have settled on one main health care system for their population, Reid, author of ‘The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care’, explains that the U.S. has elements of all 4 models in a “fragmented national health care apparatus.” “All the other countries have settled on one model for everybody. This is much simpler than the U.S. system; it's fairer and cheaper, too.”

“When it comes to treating veterans, we're Britain or Cuba. For Americans over the age of 65 on Medicare, we're Canada. For working Americans who get insurance on the job, we're Germany. For the 15% of the population who have no health insurance, the United States is Cambodia or Burkina Faso or rural India, with access to a doctor available if you can pay the bill out-of-pocket at the time of treatment or if you're sick enough to be admitted to the emergency ward at the public hospital".5

Poorer Outcomes

The U.S. currently has expenditures that cost twice as much, but with poorer outcomes when compared to other developed countries. Besides the usual statistics that the U.S. lags in the areas of infant mortality and life expectancy, have you heard of the following?

In 2011 a study by SAVE THE CHILDREN ranked the U.S. 31st out of 164 countries in the Motherhood Health Index, one of the lowest among developed countries, because it had the highest lifetime risk of maternal mortality among the industrialized countries.6

A 2009 survey by the Commonwealth Fund revealed that despite spending the most for healthcare, the U.S. lags behind in terms of access to care, the use of financial incentives to improve the quality of care, and the use of health information technology and adoption of other innovations. More specific findings show:

  • More than half (58%) of U.S. physicians—by far the most of any country surveyed—said their patients often have difficulty paying for medications and care. Half of U.S. doctors spend substantial time dealing with the restrictions insurance companies place on patients’ care. 
  • Only 29 percent of U.S. physicians said their practice had arrangements for getting patients after-hours care—so they could avoid visiting a hospital emergency room. Nearly all Dutch, New Zealand, and U.K. doctors said their practices had arrangements for after-hours care.
  • Only 46 percent of U.S. doctors use electronic medical records, compared with over 90 percent of doctors in Australia, Italy, the Netherlands, New Zealand, Norway, Sweden, and the United Kingdom. 
  • Twenty-eight percent of U.S. physicians reported their patients often face long waits to see a specialist, one of the lowest rates in the survey. Three-quarters of Canadian and Italian physicians reported long waits. 
  • While all the countries surveyed use financial incentives to improve the quality of care, primary care physicians in the U.S. are among the least likely to be offered such rewards; only one-third reported receiving financial incentives. Rates were also low in Sweden (10%) and Norway (35%), compared with large majorities of doctors in the U.K. (89%), the Netherlands (81%), New Zealand (80%), Italy (70%), and Australia (65%). 
  • Patients with chronic illness require substantial time with physicians, education about their illness, and coaching about treatment, diet, and medication regimens. Care teams composed of clinicians and nurses have been shown to be effective in providing care to people with chronic conditions and in improving outcomes. The use of such teams is widespread in Sweden (98%), the U.K. (98%), the Netherlands (91%), Australia (88%), New Zealand (88%), Germany (73%), and Norway (73%). It is less prevalent in the U.S. (59%) and Canada (52%), with France (11%) standing out on the low end.7

According to Commonwealth Fund President Karen Davis following the 2009 survey: "Access barriers, lack of information, and inadequate financial support for preventive and chronic care undermine primary care doctors' efforts to provide timely, high quality care and put the U.S. far behind what many other countries are able to achieve. Our weak primary care system puts patients at risk, and results in poorer health outcomes, and higher costs. The survey provides yet another reminder of the urgent need for reforms that make accessible, high-quality primary care a national priority.”

You have to be an idiot to realize that the U.S. health care system needs a fix.

But, bear in mind other countries have their problems too, Just ask a Brit who can’t go on dialysis at age 65 or a Canadian, except premiers, that is still waiting for a hip replacement or the last mammogram report or that next specialist or MRI appointment.

It’s obvious to many what the solution is and it is already part of the convoluted U.S. health care system – the single payer plan Medicare. The logical solution is to phase in Medicare, but, then again this is the land of the free or sorry uninsured!

Some advocates have suggested that the initial phase in include all children up to age 26 and those 55 years of age and up. The big problem is how to finance it since the current system is essentially bankrupt. Take a lesson from the Canadians- finance it through the federal income tax system and let the private sector run it. No mandatory requirements or fines. Huh!

According to political scientist Brendan Nyhan, there are widespread misperceptions among the public about healthcare reform due to political misinformation, misleading statements and flawed media coverage. Some of examples of these myths are:

  • People would not be able to keep seeing their doctor or purchase coverage outside the proposed system of managed competition.
  • The elderly would have medical care denied by so-called government “death panels.”
  • Social Security would eventually run out of money completely under existing law.8

But does Obamacare fix the U.S. health care system?


Health insurance for everyone - The law’s main goal is to insure the majority of the American people by 2014. The process has already been started and will phase in over three 3 years. Those who have one can keep it. Those who do not can choose their coverage. Those who cannot afford expensive premiums can opt for a state-based health insurance exchange. In the meantime the Children’s Health Insurance Program (CHIP) was initiated in 2009 which covered all children, regardless of income, ethnicity, and immigration status and children can be covered by their parent’s plan until the age of 26.

No unfair dealings by health insurance companies - Under the new law, health insurance providers can no longer deny coverage for high-risk patients such as those with congenital defects and pre-existing conditions. Currently, this ruling already applies to compulsory coverage of children and will be extended to adults by 2014. Previously, insurance companies could literally just drop you if you really get sick. Or they could set a cap in terms of lifetime coverage. This is not possible anymore. In addition, insurance companies cannot just increase premiums without due justification. And, they will be required to spend less money on advertising and marketing and more on providing ‘real services’.

Employers and employees alike benefit - Whereas employer coverage was not obligatory, companies big and small must now provide coverage for their employees. At the same time there are provisions for both tax relief and exclusions for employers.

Improved healthcare - Health care should improve as drugs and health care become more accessible and affordable. Even those who fall into the “donut hole” of Medicare will now be able to afford it due to substantial discounts at the pharmacy, from brand name drugs to generic drugs.

Innovation in drug research - As part of the Affordable Health Care Act, the Biologics Price Competition and Innovation Act of 2009 was also implemented. This law facilitates the development and approval of “biosimilars” or biological products. Generics are to standards drugs, as biosimilars are to biological therapies. With this extra step, the development of more affordable biological treatments will be hastened.


One-size-fits-all - Many criticize the “one-size-fits-all” nature of a universal health care system. The law requires each and every American to enroll in an insurance scheme approved by the government by 2014. Noncompliance will result in fines. This obligation is viewed by many people, not to mention several states, as unconstitutional. Hence the reason Obama’s signature legislation rests with the U.S. Supreme Court.

Paternalistic - Obamacare is being criticized as too paternalistic, with the government making decisions for the individual in terms of the use and value of health care services. Many people believe that individual patients are able to make appropriate decisions in terms of the value of health care services, not big brother.

Hard on the doctors, hard on the patients - To offset healthcare costs to cover all U.S. citizens, payments to doctors and hospitals will be lowered. And because of low reimbursement rates for doctors and administrative hassles, certain routine procedures will not be done and patients will be forced to wait or worse, will not be accepted by doctors. Not a surprise, it’s happens now. Thank God for the ERs that remain open!

“Death panels” and limited access - “Death panels” are derogatory terms for government panels and committees who decide which treatment may be prescribed and which may be not depending on the cost-benefit ratios. The term was supposedly coined by a former vice presidential candidate but actually the phrase has been used before in the political arena.9

An example often used is Britain’s National Institute for Health and Clinical Excellence (NICE). NICE utilizes cost-effectiveness analysis in order to decide whether a certain treatment is covered by UK’s NHS. A Feb 2012 report by the BBC covered how NICE provisionally rejected a prostate cancer drug that can supposedly extend life for over 3 months because it is too expensive.10

Canada has a similar system. Following the National Health Insurance model described above, it controls costs by limiting the medical services to be paid for, regulating drug prices or by making patients wait to be treated. With Canada being geographically close, some Americans have a pre-taste of such a system, with U.S. residents shopping across the border for cheaper Canadian drugs. But at the same time some Canadians (who can afford it) are going to the U.S. for faster treatment, including surgical procedures.

High taxes, fewer jobs - The conservative think tank Heritage Foundation is very outspoken about its opposition to Obamacare and cites the following:                

  • Obamacare encourages employers to drop coverage for sick workers
  • Medicare Advantage gains won’t last
  • Obamacare taxes will kill jobs and strangle the medical device industry
  • More government spending: Obamacare adds $17 trillion to long-term unfunded government spending 11

The Bottom Line

Obamacare is not the first attempt to try the reform the U.S. health care system and won’t be the last.  But, it is the first major piece of U.S. health care reform legislation in decades.

The goals of the Obamacare reforms are quite noble namely; insurance coverage of every American, more transparency, cost efficiency and better outcomes.On June 28, 2012 the U.S. Supreme Court upheld Obamacare.

With its shortcomings Obamacare is far from the perfect solution to the U.S.’ long-ailing health care system, especially the punitive means that will be utilized to ensure health insurance coverage for everybody. It will probably have the opposite effect...ensuring that millions of Americans will remain uninsured!

Then again, the solution is clear and it's next door, Canada. In fact, Tommy Douglas, the founder of Canada’s national health plan and one of Canada's most recognized heroes got his idea from guess who? someone next door - the United States.

Published June 10, 2012,  updated June 28, 2012


  1. Full Text of the Affordable Care Act,  HealthCare.gov
  2. Health Care Systems: Efficiency And Policy Settings, OECD 2010
  3. Health Care Insurance Coverage 2010, CDC
  4. Reid TR, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care
  5. Health Care Systems – The Four Basic Models, FrontLine, PBS.org
  6. Champions for Children. State of the World’s Mothers 2011
  7. Schoen C et al, A Survey of Primary Care Physicians in 11 Countries, 2009: Perspectives on Care, Costs, and Experiences, Health Affairs Web Exclusive, Nov. 5, 2009, w1171–w1183
  8. Nyhan N, Why the “Death Panel” Myth Wouldn’t Die: Misinformation in the Health Care Reform Debate, The Forum, Volume 8, Issue 1 2010 Article 5 THE POLITICS OF HEALTH CARE REFORM
  9. Dwyer J, Distortions on Health Bill, Homegrown. 25 Aug 2009
  10. Mundasad S, NICE: Prostate cancer drug too costly for NHS, 2 February 2012
  11. Side effects of ObamaCare, The Foundry, Heritage Foundation

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