Despite deep flaws that will have to be corrected, the Patient Protection and Affordable Care Act (ACA) has three aspects that make me optimistic about medical entrepreneurs being able to surmount the law’s barriers and create a consumer-dominated, market-based system of medical care and health insurance that will ultimately deliver high-quality, affordable medical care to everyone:
1.    The creation of consumer value
2.    The rise of high-value local health plans
3.    The achievement of effective disease prevention

In Part 2, I discussed the creation of consumer value as an unplanned result of ACA’s forcing individuals—and not their insurers—to pay for their normally consumed medical services. In Part 3, I described how new local health plans built around these providers will be able to displace national PPO-based carriers by creating a virtual cycle of ever higher medical quality and constantly improving affordability. In Part 4, I addressed how these innovative health plans can dramatically move the needle on effective disease prevention. In this concluding installment, I’ll talk about the challenges facing the innovators who will be responsible for achieving these benefits.

The Hard Parts
For medical providers, the challenge presented by new consumer demands for value-driven medicine will be to produce demonstrably high-quality care, transparent prices, and lower treatment costs. For insurers, the test will be to attract individual members—rather than HR managers—by enabling those high-value providers, by cutting provider billing/collection costs by 90%, by providing effective prevention incentives, and by charging increasingly affordable premiums.

This consumer-value gauntlet will be thrown down not by the multitude of government bureaucracies created by ACA, but by the consumers themselves who will (finally) have both the authority to control the money and the responsibility to demand the same accountability from their doctors, hospitals, and insurers that they’ve long gotten from those selling them housing, clothes, recreation, and food. That means consumers will have to transform themselves from patients (originally: those who endure) into savvy medical shoppers who demand high quality and affordable price. Undoubtedly, this will be a wrenching transition for many, because, unlike habitation, haberdashery, holidays, and home cooking, medical care is not something anybody actually wants to consume. It’s the one life necessity that is devoid of any direct enjoyment (cosmetic augmentation excepted). Nonetheless, there is ample evidence that American consumers can and will do this when given both the authority and the responsibility to do so.

Unintended Consequences
It should be obvious that the consumer dynamics and benefits I’ve described in this series of articles are completely different from those envisioned by ACA’s architects who assume that value in medical care will be achieved only by putting the bureaucrats in charge, rather than the consumers. The problem is not just that this approach won’t work but that it can’t.

Stymied & Enabled by Complexity
Medical care is no more amenable to top-down micro-management than was the Soviet economy. It is an incredibly complex adaptive system involving billions of daily decisions by millions of players, each seeking to fulfill its own needs. It is a constantly involving economic system more akin to a biological ecosystem than to the metaphorical machine that ACA’s promoters seem to picture. Centuries of economic experimentation and analysis have shown us that the only known way to optimize both individual and overall outcomes within such a system is via an open, lightly-regulated marketplace to mediate the competing demands, capabilities, resources, and interests of all the parties.

The scenario I’ve laid out for ACA’s real effects will result in just such a consumer market, albeit with far too much regulation and hardship . The one key piece of ACA that enables this outcome is the individual health insurance exchange that corrects the fundamental market failure in health insurance by allowing everyone to purchase health insurance regardless of pre-existing medical condition. ACA’s current exchange rules will have to be changed to allow this to happen without destructive adverse selection (i.e., free-riding), but if that happens, the positive outcomes I’ve described will be entirely different from the expectations of both the law’s rosy proponents and doom-saying adversaries. That’s why we need them to focus on fixing the law, rather than viewing it as either unchangeable holy writ or being totally devoid of redeeming grace. ACA can and must be fixed.

Unleashing the Entrepreneurs
With more than a little enlightened regulation, legislative fixes, judicious judicial clarification, and intelligent state experimentation, the Patient Protection and Affordable Care Act carries strong potential to enlist the matchless ability of America’s next generation of Gates, Jobs, Brins, and Zuckerbergs to overcome seemingly insurmountable obstacles to create a new and quintessentially American system of high-quality medical care that will cost a mere fraction of today’s dysfunctional system.