In his Opinion page at Wall Street Journal, Scott Gottlieb argues that the proposed health care reform to provide affordable healthcare to all (that will likely be pushed through Congress this year) will have the unfortunate effect of reducing Doctor’s incomes, reducing the quality of care and increasing patient’s wait times and frustrations with the system. In short, the US health system will start looking more like the Canadian health system.

The ‘Public Option‘ insurance program will be offered and run by the government and will be open to anyone. This will be modeled on Medicare, which finds itself in a mortal danger. Since the Public Option plan will be cheaper than most other private insurance plans, it will provide an incentive for employers and public at large to shift to the public option, ultimately making it the largest insurance plan in the country. This plan will be cheaper as it will leverage its heft to negotiate cheaper reimbursement rates with the medical services providers. He argues that the decline in incomes will force most private doctors and providers to consolidated into larger practices to cut on overhead costs, causing delays in appointments for services to the patients. Additionally he states that the incentives in the plan are misaligned, doctors will earn more for providing more services (that is if the patient keeps coming back, instead of fixing the illness).

Scott makes some very valid arguments that will need to be addressed by the Congress when they discuss the new health care proposal. Whether health care should be centraly managed or whether it should be left in private hands is a question that undoubtedly we will see many more debates in the next year or so. There are many facets to this debate. For example, we already have a problem of lack of doctors in rural communities in the US, which will be further exarcebated if less young people choose to go into medical profession if it becomes less attractive to do so. It will be interesting to watch how this debate will pan out.

Shailesh Kumar

Shailesh Kumar

Shailesh Kumar is an Entrepreneur, investor and blogger. He writes about value investing at Value Stock Guide. Learn about the stock market and discover the techniques proven to work best for long term investors for finding appropriate stocks to buy in their portfolio to get superior risk adjusted returns.