Governor Howard Dean speaks about the impact of healthcare reform
By Subadhra R. Sriram
As a politician, Gov. Howard Dean has been called a maverick. As a physician, however, he offers an insider’s view of healthcare reform. His political career involved six-terms as governor of Vermont and a run for the 2004 Democratic Presidential nomination.
Dean served as chairman of the Democratic National Committee from 2005 to 2009. He currently works as an independent consultant focusing on the areas of healthcare, early childhood development, alternative energy and the expansion of grassroots politics around the world.
Dean also serves as a CNBC contributor and is the founder of Democracy for America. Editorial Director Subadhra R. Sriram spoke with Gov. Dean about the implications for the economy and staffing now that the Supreme Court has upheld healthcare reform.
Q: The Supreme Court has upheld the healthcare reform law. How do you think this is going to aﬀect the U.S. economy both in the short and long term?
A: It’s unclear. The fact that the court has said OK to the Aﬀordable Care Act is a good thing. I think it will eventually give the private sector a better way of controlling healthcare costs. But the Medicaid part of the decision is very troublesome because it could result in actually having larger numbers of uninsured people in the conservative-run states, and that will put enormous pressure on hospitals and doctors.
And what do you see happening in the long term?
I see a system very much like that in Massachusetts, but I do see a move toward payment by the patient, not by the procedure.
Let’s talk about how you think this will aﬀect staﬃng ﬁrms.
Well I think it will help them a fair amount. It’s not clear because most staﬃng ﬁrms do not provide beneﬁts to their temporaries, of course, but they do provide beneﬁts for their own staﬀ. Small ﬁrms I think will do very well, because I expect most small businesses (according to a McKinsey study) will leave the healthcare market. They won’t supply health insurance to any of their employees anymore and they’ll all go and get healthcare on the exchange.
I think that’s a very positive development. It breaks the connection between healthcare and employment. And that’s a very important thing to do for a lot of reasons. It makes America more competitive. And second of all, it really does begin to, I think, allow small businesses to focus on what they want to do, which in your case is staﬃng and not so much focus on healthcare which is very complicated, very expensive and not a controllable expense for small businesses.
So given that, what do you think the future of staﬃng is going to be?
I don’t know that the actual delivery of healthcare is going to change very much. As long as healthcare continues to have a demand it’s not as predictable as it might be. There’s always going to be a need for temporary staﬀers, nurses that can come and go somewhere else and so forth. I’m not too sure that’s going to change dramatically.
Given the shortage of talent, how can the United States meet the demand for medical personnel going forward?
Well that’s a big problem. There were a lot of things that were not addressed in the healthcare bill. One of them is staﬃng as a medical education cost. There continues to be tremendous pressure on teaching institutions by the taxpayers to not pay for medical education costs. Well of course somebody has to pay for that. Now, it’s often the students, which is an enormous problem because students are not going to go into the professions that are needed the most, which is the primary care professions, whether it’s a nurse practitioner or internist. These problems are yet to be resolved. If you were to go to the pay-by-the-patient model — which both the Obama and Romney plans both make easier — then of course there’s going to be much more investment in primary care. But as long as there’s huge student loans necessary to pay for medical school, you’re just going to get a very small number of people going into primary care because you can’t ever pay those loans oﬀ at what primary care providers get paid.
So how does one handle this situation?
Well, again, you have to change the way that the system works. We have an illness-based system now. People get paid. The sicker you are the more physicians get paid. And so, if you had a wellnessbased system where physicians like me just get paid a ﬂat amount whether you’re sick or not, obviously the whole system is going to start working toward keeping people healthy. And that requires investment in primary care and prevention, not so much of an investment in high tech. And that’s the way you’re really going to change this.
This is outside the scope of the bill. The bill really didn’t deal with any of this except in a very subtle way, which was never intended by the writers of the bill. The formation of the Accountable Care Organization in Massachusetts, the ACO, could and is leading to the development of hospital and insurance companies merging, which removes an enormous amount of bureaucracy for the system. This will lead to more eﬃciency in the system and it could lead toward the hospitals directly going on the exchanges and competing with insurance companies, which will accelerate the trend toward eﬃciency and will accelerate, I think, the ability of hospitals to take payments by the patient instead of payments by the disease and the procedure.
Eighty-three percent of American physicians have considered bailing out of their careers due to the healthcare reform law, according to a survey released by the Doctor Patient Medical Association, a non-partisan association of doctors and patients.
That’s nonsense. I don’t think the reform is going to have much to do with any of this. They’re already quitting being doctors because the insurance companies are so obnoxious and Medicare is not much better.
What are the trends in healthcare that you are seeing?
You can look at Massachusetts and see what we could expect ﬁve years from now. And I do think we’re going to see the consolidation of insurance companies in healthcare, which will mean actually lesser employment in the insurance company business. I do think we’re going to see a trend toward payment by the patient, and that will happen because the private sector will demand it, because the private sector is going to demand some kind of healthcare cost control. We can’t go on like we are. I do think you’re going to see a trend toward more prevention and less highly technical intervention. I think those are the big things.
If you had to give some advice to staﬃng ﬁrms, what would it be?
There’s always going to be a need for staﬃng ﬂexibility in the institutions to provide healthcare. I don’t think the bill [will change that] — other than the risk in the states that are talking about not accepting the Medicaid, which will put an enormous strain on the private sector and on the healthcare sector. Other than the risks in those particular states, I think the healthcare industry won’t grow as fast. But I still think they’re going to need a lot of ﬂexibility.
Second, I think that the trend toward the management and the actual personnel that are employed by the staﬃng ﬁrms are going to be ﬁnding their healthcare elsewhere because it will be cheaper. I would in fact pay the $2,000 per employee [penalty] or whatever it is upfront and then get out of the healthcare business. Maybe give the employees a ﬁxed beneﬁt and let them go on the exchange and use that beneﬁt and whatever else they want to add to it. So interestingly the barrier for people who want to work as temps in any particular ﬁeld is going to be a lot lower now because they won’t have the concern about not having beneﬁts. Healthcare of course is the most important beneﬁt.
So there will be surge in temporary workers?
There might be. Now, there’s much less of a downside to being a temporary worker. In fact, a lot of young people would prefer being a temporary worker except for the fact that they can’t get any beneﬁts.
Let’s talk about the results of the election. How do you think that will aﬀect the U.S.?
I think Obama’s going to win because I don’t think people can relate to [Mitt] Romney. I just don’t think … you know, Romney is somebody who just can’t connect with ordinary middle-class people.
So if Obama wins, what happens then?
Well I think we see the implementation of the healthcare bill. If Obama wins by a signiﬁcant enough margin, two or three points, I think he brings in a democratic congress. So you’ll get rid of this sort of this warfare that’s going on in Washington, or at least reduce it some, because the Senate will still be very closely balanced.
What are your plans? What are you doing right now?
Right now I’m doing a lot of consulting to all sorts of diﬀerent organizations. Most of my time is spent with a law ﬁrm in Washington — McKenna, Long and Aldrich. But I do a lot of consulting. I do a lot of democracy building work around the world. A lot of the work that I do centers around healthcare issues, a lot of the consulting work.
And what are your future plans?
Just going to keep doing what I’m doing for now.
Subadhra R. Sriram is editorial director of Staffing Industry Analysts. She can be reached at email@example.com.