Part 1: Even a Blind Pig Finds an Occasional Truffle

I’ve made no secret of my disdain for the Patient Protection and Affordable Care Act (ACA), the new health reform law. It is a bad bill that focuses the wrong “solutions” on the wrong problems and promises to visit unnecessary economic distress and destruction on America’s providers, consumers, taxpayers, and insurers. Even the IRS is protesting.

Yet, rather than continue to bash it, I’ve taken my summer hiatus from writing this blog to focus on a more constructive approach. The law is a fact we have to deal with, and despite a lot of talk about a subsequent Congress overturning it, I’ve concluded such an action to be both unlikely and unwise. The opposition has nothing better on the table and the ACA situation is actually far from hopeless. The focus needs to be on repairing, not revoking it.

It has been helpful to me that, before I took up the mantle of health policy analyst, I was an entrepreneur who was able to successfully wend my way through the bureaucratic mess that initiated the managed care revolution to build a successful public company that brought a lot of high-quality, low-cost health care to many people. What has usually worked for me has been my entrepreneur’s focus not on accepting barriers, but on finding routes around, over, and through them. Thus, I’ve spent the better part of the summer pondering this question: “How can America’s entrepreneurs make health reform work?”

The answer may surprise faithful followers of this space, because I see some fundamentally positive, even revolutionary opportunities and benefits emerging from the law—once it undergoes a number of necessary adjustments. In fact, I see a strong possibility of it eventually leading to a new era of entrepreneurially driven high-quality medical care for all Americans delivered at a fraction of today’s costs, albeit not in a manner intended by its authors.

At the core of my optimism is the one thing that ACA gets right, at least conceptually: the insurance exchanges. Allowing people to pick their own individual, portable health insurance, instead of having those decisions made by employers and government agencies, is essential if we’re ever to achieve affordable, high-quality health care for all Americans. Unfortunately, ACA’s version of the exchanges is a limited, over-regulated, adversely selected mess that will require considerable adjustment to work properly. But the essential concept is there and can be made to work.

Don’t get me wrong. As the law is written, it is unworkable and unaffordable. But my experience as both regulator and regulated suggests that ACA probably won’t turn out to be the irresistible farce it currently looks like.  That’s because the government, in its own ponderous way, tends to eventually sand down the rougher edges of its more problematic laws through a combination of regulatory flexibility, judicial interpretation, and congressional fixes. Assuming ACA’s trajectory is no different, there will be no small irony if its ultimate benefits, as I expect, end up flowing not from the plethora of heavy-handed, top-down regulatory interventions created by the act, but from the emergence of an entrepreneur-driven, market-based system in which newly dominant consumers will demand and receive high quality, affordable health insurance and medical care.

In the ensuing four parts, I’ll discuss how this value-focused consumer market can emerge and the key factors that will allow it to work. In Part 2, I will discuss the emergence of consumer value. I invite your comments.

On a personal note, I appreciate the many comments I’ve received from readers noting my absence from these pages over the summer (assuming, of course, they were expressing regret and not relief.) It’s good to be back.