With political candidates sparring about the 25 percent increased premiums for Affordable Care Act (ACA) insurance plans, the questions of why has this occurred and how we can ameliorate it are bouncing around the media. As a primary care doctor, the answers to these questions reveal themselves every day in my office. While it is convenient to demonize the ACA, insurance companies, and even Big Pharma, the actual cause is related to flawed assumptions and rules within our health care delivery system. One just has to see where insurance pays its money to understand how to fix the problem.
More than 50 percent of Medicare’s non-HMO funding is sent to hospitals and specialist doctors, often for procedures and interventions shown to have little value at high cost. For CareFirst in Maryland, 23 percent of funding is for specialist care and 40 percent for hospital/facility cost, much of this incurred by elective procedures. Only 5 percent of cost goes to primary care. Such excessive spending for aggressive procedure-based medical care is a salient reason that insurance companies are raising premiums. Is such spending beneficial?