- The Washington Times - Wednesday, August 4, 2010

We’ve heard frequently from proponents of Obamacare that the multitrillion rejiggering of the American health insurance industry should be “given a chance to work.” You can’t blame supporters for changing the subject: A national conversation about the “buy insurance or pay a fine” mandate contained in the 2,400-page bill, or the 47 new bureaucratic entities and 16,000 new IRS agents commissioned by this legislation, would only take the new law’s flagging approval ratings even lower.

Spinning potentially rosy outcomes about America’s tomorrow is far less damaging, unless, of course, we look at how “health care reform” is likely to play out by using one of the most apt examples available - the Medicaid system in Arizona, where I’ve been an orthopedic surgeon since 2001.

Doubtless you’ve heard the horror tales emanating from Massachusetts, where Obamacare-in-miniature has driven up costs and emergency room usage while embedding bureaucrats and politicians ever more deeply into the medical decision-making process best left to patients, doctors and families. Arizona’s Medicaid system, known as the Arizona Health Care Cost Containment System, or AHCCCS, has fared little better.

The basics of AHCCCS are simple. State government contracts with private companies to offer managed health care to eligible Arizonans. In Maricopa County, home to Phoenix and about 60 percent of the state’s residents, four companies offer medical services (though certain mental health and long-term care services are carved out from this). When an applicant is accepted into AHCCCS, he or she chooses a plan, or is simply assigned a plan if no choice is made.

With the patients thus divvied up, Arizona’s Medicaid insurers contract separately with all types of providers, from hospitals to doctors, therapists to nursing homes and medical equipment suppliers. If this sounds familiar, it’s because this arrangement is the very basis of Obamacare’s “health insurance exchanges.” It’s also huge business for big insurance titans like United HealthCare and Aetna, to name just a couple of companies.

These private companies win multimillion dollar contracts by placing bids with AHCCCS workers, an arrangement that leaves the insurers beholden to the government officials who hand them business - not the Arizonans who are their customers. With money shuttling directly between government and the plans, the plans’ products and services are, by necessity, designed to please government first, and patients second, if at all. And while enrollees can “act with their feet,” in reality they can do little more than shuttle between four similar plans offering virtually the same benefits.

If that doesn’t sound like much of a choice for patients - well, it isn’t.

While AHCCCS-contracted plans do provide important health care services to many Arizonans, this basic fact must be recognized and acknowledged again - the “client” that the plans work to please is first and foremost government, the politicians and bureaucrats who control their contracts. An unhappy AHCCCS patient means not much at all, but an unhappy government employee might well put millions of dollars at risk.

It’s also worth noting that former Arizona Gov. Janet Napolitano, now secretary of Homeland Security, already tried a health insurance exchange for individuals and small businesses, a replica of the Obamacare exchanges. “Healthcare Group” was to be financially self-sustaining in just a couple of years, the governor assured the legislature and the state. However, the program needed a huge taxpayer-funded bailout, benefits were reduced and eligibility was severely curtailed.

The only party who didn’t seem to suffer inordinately? The Arizona health care giants who in 2008 somehow found enough cash to mount an aggressive effort against a ballot measure written to protected health care rights for Arizonans and their families. Outspending supporters 5 to 1 during campaign worked, as the measure (back in refined form on this year’s Arizona ballot) failed by less than 9,000 votes out of 2.1 million cast.

Obamacare supporters and their big insurance backers borrowed much from Arizona’s Medicaid system. Sadly, mandating that Americans join a plan, in an AHCCCS-style exchange, takes a fine concept - private management of our critical health care safety net - and perverts it into something else - a fiscally disastrous alliance between unaccountable government bureaucrats and major private corporations.

Arizona’s Medicaid system details for us what happens when health care decisions belong not to patients and doctors, but to bureaucrats and politicians. The result? Nothing good. And health care will surely fare no better nationally as these two powerful entities divvy up one-sixth of the American economy.

Dr. Eric Novack is chairman of the U.S. Health Care Freedom Coalition and Arizonans for Health Care Freedom.