The Problem with PPACA aka "ObamaCare", February 8, 2015


US President Barack Obama's signature accomplishment has been the passage of the Patient Protection and Affordable Care Act (PPACA), popularly called "ObamaCare" by fans and critics alike.

Obama infamously made the false prediction that the implementation of his signature healthcare law would reduce the cost of health insurance by about $2500 per person. How much has your health insurance gone down in cost? Of course, it has gone up every year since the law was signed, and the central provisions of the law took effect on January 2014.

I believe that this public policy is doomed to failure, in so far as it is meant to help American attain affordable healthcare. I keep hearing critics of Obama on the right say that the policy will not be successful because it is "socialism". Critics of Obama on the left say that it isn't a sustainable solution because it isn't "single-payer". I believe that both are wrong. The critics seem to think that ideology is the thing that determines the success or failure of public policy; that something can't work because it is either too socialist or not socialist enough. Was slavery in America consigned to the ash-heap of history because it is morally repugnant? No, we no longer have slavery because brave men and women fought to eradicate it.

This brings me to the crux of what I have to say: the PPACA will not make healthcare affordable because it does not address the cost of healthcare! I believe this is totally obvious upon an examination of the facts. The main provisions of the PPACA: guaranteed issue insurance, the individual mandate, and subsidized premiums all are aimed at helping Americans purchase insurance. While this may be a laudable goal, the problem is that the PPACA does nothing about the cost of the healthcare that the insurance must pay for. In other words, high healthcare costs will destroy America regardless of how they are paid for. Simply making it easier to buy health insurance is like trying to stop the Titanic from sinking by re-arranging the deck chairs; it doesn't address the root of the problem.

To make matters worse, all indications are that Republican proposals to "repeal and replace" the PPACA all consist of alternative schemes that are aimed at health insurance; not the cost of healthcare. I believe that this is no accident; I think that the most reasonable explanation here (and I speculate) is that the people and companies who benefit from the high cost of healthcare are fiercely lobbying to protect their gravy train.

Thru my own personal experiences with health in the US, and thru the experiences that others have told me about and that I have read online, I have come to believe that the only solution to the problem is to address the cost of healthcare directly. And no, I don't mean by rationing. I will use examples of unethical behavior to explain.

I wish to emphasize that I am very pro-business. I believe that it is laudable to work hard to provide a product or service and earn a profit by charging a fair price to it. That is not what any of the below-mentioned people are doing!

Example 1: Excessive Charges For Surgery

The New York Times reported in September 2014 a story about a patient who received surgery on his neck for herniated discs. He carefully researched what he thought that the cost of his care should have been and was prepared to pay his share of the cost according to his insurance policy. Among other charges settled with the insurance company was a bill for $6200 for the surgeon. However, there was an unexpected bill for $117,000 for an "assistant surgeon" that the patient never met! Of course, the patient did not have the money to pay this and he was outraged that he was not informed of this charge in advance. Anthem Blue Cross Blue Shield eventually capitulated and paid the entire $117,000.

Summary: two doctors performed a surgery: one charged $6200 and the other charged $117,000.

Example 2: Excessive Charges For Medication

A while back, I learned about a very unique medication available in the US. It is marketed under the trade-name "Xyrem", but is generically called GHB. This drug has a colorful history.

When I researched it, I found out that it used to be a generic sleep aid. Many patients swore by it, and unlike most other sleep aids, GHB actually allows patients to sleep more deeply. It was used to treat insomnia, jet lag, and narcolepsy, among other things. (Many people don't know that having trouble staying asleep at night is as much a part of narcolepsy as having trouble staying awake during the day)

Unfortunately, there was a disaster for patients who needed GHB to function normally. GHB came under scrutiny because it is also known as a drug of abuse. First of all, some people use it get high. Second, a "Dateline" special in the 1990s reported that it was being used to facilitate rape. The US government responded to this by criminalizing GHB as a "Schedule I" drug, the strictest category of prohibition, which is, by itself a contradiction. "Schedule I" is supposed to mean that a drug has no accepted use, but I just told you that it does.

Years later, the FDA awarded a patent on GHB to a company called "Orphan Medical" which eventually sold it to another company called "Jazz Pharmaceuticals". In one of the most bizarre and schizophrenic government regulations I've ever heard of, the FDA considers the drug legal only when purchased thru Jazz. That's right, GHB only has accepted medical use when purchased thru Jazz. That makes about as much sense as saying that a baseball bat only has accepted use when purchased thru Sports Authority and is otherwise a dangerous weapon that must be banned.

What really boiled my blood was when I found out that the drug is approved exclusively to treat narcolepsy, and insurance companies pay up to $12,000 per month (and rising every year) per patient for patients to receive this medication. I spoke to a pharmacist at a compounding pharmacy I regularly use regarding this issue and he assured me that the drug costs pennies per dose to manufacture, so the high price is entirely man-made. As a result, there are people suffering from narcolepsy as I type this who cannot get the medicine they need to be well and enjoy life because of the unethical actions of government and business, and as far as I am concerned, that is a crime against humanity.

For those of you in the single-payer crowd, I know someone from the UK who explained to me that the UK National Health Service pays a much lower price than the American private insurance companies, but it is still very high and the NHS routinely denies the medicine to people who need it. I believe that if they were serious about caring for the British people, they would tell Jazz to go pound sand and have it manufactured locally.

I last read that Jazz had annual revenues of over one billion dollars for this drug alone a few years ago. May they roast in Hell for what they've done, because all indications are that they will never face justice in this world.

Example 3: Patients Can't Benefit From New Treatment

There is yet another illness that Americans are by-and-large unfamiliar with: cluster headache. It is widely reported that cluster headache is the most painful illness ever documented. Sufferers report that the pain is worse than giving birth without medication and it typically lasts for one to three hours. People kill themselves to stop the pain.

There is no cure available.

The Daily Beast reports a remarkable discovery. It all started when one cluster headache patient serendipidously discovered that using LSD recreationally stopped his pain. Americans have been fighting for years with the federal government to get medical access to cannabis, and in most Americans' minds, the fear of LSD is much greater than the fear of cannabis. This patient told other patients about his discovery. From the sound of it, many cluster headache patients are secretly medicating themselves with LSD to this day.

Scientists from the Harvard Medical School discovered in a pilot study that for some cluster headache patients, they could achieve relief from their pain with a compound called "2-bromo-LSD", which is molecularly similar to LSD, but it doesn't bind with receptors in the brain that are associated with getting high. In other words, the drug is impossible to abuse. What's even more remarkable is the dosage. Some patients could achieve relief with just three small pills per year! Wow, what a remarkable discovery! No more need for anyone to suffer with cluster headaches, right?

Not so fast. There's a problem: 2-bromo-LSD is not FDA-approved and it would cost a huge amount of money to go thru the regulatory hoops to get it approved. Furthermore, cluster headache affects about one person per thousand. If each patient took three pills per year, they would sell less than two million pills per year in the US. At that rate, it simply isn't profitable to do what is legally necessary to bring this drug to market for patients who need it.

Once again, because of the unethical actions of government and business, they are sick people suffering with cluster headache who cannot get the medicine they need to be well, and as far as I am concerned, that is a crime against humanity.

Example 4: Excessive Charges for Lab Tests

This final example is the one you are most likely familiar with. I'll tell my personal story about it.

I once saw a doctor who was out-of-network from my insurance. I knew that it would cost more, but I was ill and wanted to be seen that day. The doctor prescribed lab tests of the sort you would get done at LabCorp or Qwest; routine lab tests. I was billed about $500 for these tests. My insurance reimbursed me a tiny fraction of that, as in less than $50, but I don't remember the exact amount. I called the insurance company to see what was going on. The lady who answered the phone explained that it was out-of-network. Their payment was something like 80% of the amount they normally pay to their in-network providers. I pointed out that this was a small fraction of what I paid, and she carefully explained to me that the paltry sum I was reimbursed from would have been considered payment in full by an in-network provider.

ABC News reports on this phenomenon in more detail. In short, some of these providers charge outrageous prices to unwitting customers because they can.


I consider myself more knowledgeable that most Americans about what's going on with healthcare. However, I do realize that if I did some digging, I would no doubt find more outrageous examples of how money comes before people in American medicine. I mentioned treatments for narcolepsy and cluster headache; I suppose that I probably see abuse there because these illnesses are rare enough that most people aren't familiar with them.

In short, I don't believe that it will ever be possible to make healthcare "affordable" as long as the US government gives its blessing to organizations that do the things that I described above. We can never "protect" patients while government beaurocracy stands in the way of new treatments being administered to people with rare illnesses.

Doctor Jonas Salk, inventor of the polio vaccine, gave it away for free because he wanted to protect Americans from disease. Can you imagine what the government might do if his polio vaccine were invented today? No doubt, he would not be able to make it cheaply available because he would need sponsorship from a large pharmaceutical company to pay for all the regulatory red tape from the FDA, et al, and that company would own the patent on it and charge as much as they thought they could.

Michael Moore painted a grim picture of health insurance companies abusing patients in his documentary film "Sicko". Moore is an advocate for single-payer. I pointed out above that abuses can be perpetrated in a single-payer system, as well.We must demand that our government serve our interests rather than the interests of campaign donors.

I want to live in a world where medical products and services are provided to people who need them at a fair price. Some indigent patients will doubtlessly require public assistance, but that public assistance should not enable the financial rape of our country.