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Paul Levy: Deconstructing the drivers of ACA cost crisis.

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Paul F. Levy,  who was CEO of Beth Israel Deaconess Medical Center, in Boston, from 2002 to 2011, has written a brilliant — and concise — diagnosis of what ails the Affordable Care Act and U.S. healthcare in general in a piece for athenaInsight, a Web magazine sponsored by athenahealth.

Among his remarks:

“Consider: There’s simply no way that changes in insurance underwriting — elimination of pre-existing conditions, an end to lifetime coverage limits, and guaranteed issue of insurance to all subscribers — will do anything but create an actuarial guarantee of higher rates.

“And providing a statutory allowance for insurance companies to keep 15 percent of the premium dollar for administrative costs and profit creates an incentive to raise, rather than lower premiums.

“Meanwhile, government policies around pharmaceuticals — permitting direct-to-consumer advertising for drugs, prohibition of discount shopping by Medicare, and FDA actions that have allowed monopoly-like re-marketing of long-proven drugs — are a guarantee that drug prices will rise.”

To read Mr. Levy’s important essay, please hit this link.

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