Grassroots Commentary

Why ObamaCare Will Fail

Bill Franklin · Nov. 11, 2013

Hubris, the overestimation of one’s competence and ability, especially among those in positions of power, has sent mankind on many a fool’s errand and has been the cause of much anguish through the ages.

One of the earliest recorded instances of it is in Genesis 11. In the days following the biblical flood, people spoke a common language, allowing them to collaborate in joint ventures, such as the building of the great tower of Babel in modern day Iraq. “Come let us build ourselves a city and a tower with its top in the heavens,” they said, in order “to make a name for ourselves.” God observes their hubris – the desire to be like Him – and confuses their language so they can no longer communicate with each other; then He scatters them so that their construction project is left incomplete.

Farther down mankind’s timeline Solomon, allegedly the wisest man who ever lived, warned that “pride goes before destruction, and a haughty spirit before a fall.” Sage advice. Hubris is accompanied by a willingness to take excessive risk. It was at the root of the Challenger disaster, the Bay of Pigs catastrophe, and a couple of years ago, the Deepwater Horizon oil rig explosion.

When Barack Obama assumed the office of the presidency, our country was facing high unemployment, a meltdown of financial institutions, two foreign wars, a near-nuclear Iran, the misadventures of a tyrant in Korea whose sanity was questionable, and a fulminating conflict in Palestine. Yet despite all of these challenges, Obama and his minions in Congress chose to “reform” the American healthcare system which represents one-sixth of the economy and was not a smoldering problem. We are left to guess his motivation in this risky undertaking, but one thing is certain: Obama is not burdened with excessive modesty. His self-image borders on messianic. Like the ancient builders of the tower of Babel, one wonders if this large scale government reengineering was driven by the desire to “come; let us make a name for ourselves.”

However, even if it had the noblest motivations, ObamaCare is doomed to fail because of its sheer scale and risk. Here’s why.

The American healthcare system is, well, a system. A system by definition is the aggregation of interdependent parts, activities, or functions – very few of which, are superfluous. Shut down one part, activity, or function and the system or a subsystem of which it’s a part will cease to function. In complex systems, a failure in one part can cascade throughout the system causing failures in related subsystems.

In mid-July of 1977, for example, a New York City blackout occurred because a lightning strike at a substation tripped two circuit breakers. A loose locking nut in one breaker box together with a tardy restart cycle ensured that the breaker was not able to reengage and allow power to begin flowing over the lines again. This caused the loss of two more transmission lines, which caused the loss of power from the Indian Point nuclear power station, which caused two major transmission lines to become overloaded, which caused automatic circuit breakers to trip, which reduced power on the grid, which put the city in total darkness one hour after the lightning strike, which caused widespread looting and rioting.

Note the cause and effect linkages.

Such is the nature of systems. Their greatest strength is their greatest weakness: i.e. their interconnectedness. Our inclination to think there is symmetry in causes and consequences – that disastrous system failures are caused by equally monstrous blunders – is usually wrong. The root cause is most often quite benign and accelerates to a catastrophic ending. A lightning strike on a remote box worth less than $25 caused hundreds of millions of dollars in riot and looting losses and damages almost 100 miles away.

Unlike many technological and organizational systems, the American healthcare system is not the product of a master design. It has evolved over many decades and continues to evolve. It is so vast that there is no person who understands how it works. There are people who understand how parts of the system work – relatively small parts. There are people who possess a global view of how the system works. But there is no one who possesses a ground-level understanding of how inputs are converted to outputs from end to end throughout the system. No one.

Into this unknown world of cause and consequence fools rush where angels fear to tread. Yet Obama and his Democrat lawmakers, academics, and policy wonks with unbounded hubris proposed to improve the effectiveness and reduce the cost of this system that no one fully comprehends – a system with perhaps billions of micro-connections and work-arounds, most of which are invisible to people working in the system, let alone people outside of it, a Pick-up Stix web of relationships whose equilibrium can be put into a tailspin of unintended consequences by small disruptions of it.

The flagships of the ObamaCare invasion will be over a hundred new government bureaucracies under the commands of managers who will face implementation problems they have never confronted before, de novo bureaucracies with no legacy of precedent, whose operating procedures will have been composed by unrelated small armies of regulation writers, who have never worked in the administrative environments their rules are prescribing, each anthill of activity laboring independently of the other regulation writing anthills, thus assuring there is no coherency in their collective work product. There will be, however, a bumper crop of unintended outcomes, some of which will require years to erect adequate organizational defenses preventing their recurrence. As has happened with Social Security, Medicare, and Medicaid, costs will exceed the most pessimistic CBO estimate, perhaps two-fold or more, jeopardizing the U.S. economy for decades, if not forever. The bureaucracy managers will fail, although there will be few objective standards to reveal how badly they are failing. Their failures will not be due as much to the fact that they have not ever dealt with the issues facing them, but that no one has.

Orbiting any new government program with the scale and intrinsic risks of ObamaCare will be two potentially fatal threats. One is the naïve optimism that things will go as planned. They won’t. However, instead of launching initiatives as trial projects with the intent of adapting as new learning is acquired, as well-run business organizations do, they will be launched with a bureaucratic rule book whose effectiveness is believed to correlate with its weight. Immeasurable resources and time will be spent trying to make the system work as planned. In predictable bureaucratic behavior, breakdowns and bottlenecks will be “fixed” with patch upon patch, rule upon rule – repairing rather than replacing defective operations.

The second fatal threat is that ObamaCare is not customer-centric. It is procedure-centric. Customer satisfaction was never its goal. This is by design. In their arrogant hubris Obama and his Democrat legislators assumed as an article of faith that government makes better decisions – certainly more rational ones – than the recipients and providers of healthcare services. The recess appointment of David Berwick in 2010 to head the Centers for Medicare and Medicaid Services and its $900 billion annual budget made that abundantly clear. Berwick is an academic technocrat who has publicly stated multiple times his lack of confidence in private enterprise solutions for healthcare delivery. Yet one need only look to public education, Amtrak, and the U.S. Postal Service to see how Procrustean government-designed and government-managed services are. These institutions have “survived” because there are competitive alternatives to using them. The aim of ObamaCare is to eliminate competitive alternatives and have only a single payer.

The failure to make ObamaCare customer-centric could be its undoing. Absence of a feedback loop from the market and alternative choices assures that healthcare services will be substandard. Americans, with their legacy of enjoying the best products and services in the world, may suffer this for a while, but not for long. Democratic society works because of the consent of the governed. People pay their taxes, follow society’s rules, and accept civil authority voluntarily. The few that don’t are manageable because they are a few. This country has not had to deal with large-scale civil disobedience since the Civil War, but it would be foolish to think that civil disobedience is not a possibility if society believes its public institutions are not serving the interests of the majority. Hopefully society’s frustration with ObamaCare will be resolved at the ballot box, not riots.

These criticisms of ObamaCare do not mean that the American healthcare system has no room for improvement. It does. But the system seems to work for about 85% of its users. Instead of focusing on the 15% that doesn’t work well, the hubris of ObamaCare is its redesign of the entire system.

Why not take insurance and focus on improving it? Small scale highly focused interventions would produce improvements in a relatively short period of time. At least new knowledge would be produced concerning what works and what doesn’t, and that new knowledge would lead to improvements. Such an approach is experimental, flexible, and adaptable. Notwithstanding Berwick’s lack of confidence in private enterprise, a private sector partnership would be critical to the success of the undertaking. Once insurance is “reformed” perhaps unnecessary testing and treatment could be addressed next, followed by improvement initiatives confronting other failures of the healthcare delivery system.

This piecemeal approach has worked in improving business processes. It would work in improving the cost and quality of healthcare delivery. If performance improvement had been Obama’s aim, he would not have undertaken a large-scale, high risk overhaul that has no chance of succeeding. He would have taken a more modest, less visible, and less risky approach.

The hubris of his claim that while he wasn’t the first president to try reforming the American healthcare system he intended to be the last revealed an aim that is ages old: “Come; let us make a name for ourselves.”

* * *

The preceding blog was posted in July 2010 – 40 months ago. I’ve re-posted it today not to show its clairvoyance, but to show that ObamaCare’s recent and well-publicized failures are, as the original post asserts, due to the arrogant belief that large scale change can succeed despite the complexity of the problem it attacks if only the “right people” can be assembled as the change agents. A remarkably good piece of investigative reporting appearing over last weekend reconfirms ObamaCare’s conceit.

One of its architects, Dr. Ezekiel Emanuel, who made a fool of himself on Chris Wallace’s Fox News Sunday program, wanted a project leader with proven expertise in business, insurance and technology. Instead, Obama chose Nancy-Ann DeParle, a Clinton political hack with no expertise to lead a project like this.

“They were running the biggest start-up in the world, and they didn’t have anyone who had run a start-up, or even run a business,” David Cutler, a Harvard health economist and adviser to ObamaCare observed. “It’s very hard to think of a situation where the people best at getting legislation passed are best at implementing it. They are a different set of skills,” Cutler said.

In 2008 voters gave Democrats the keys to the kingdom – a once-in-a-lifetime bullet-proof majority in both houses of Congress plus the White House, letting Democrats have a free hand to run the government without Republican interference. ObamaCare was the result. It was rammed through the legislative process without a single Republican vote. Many of the Democrats who voted for the health reform law have since lost their seats or opted to retire, victims of voter remorse. Among the retirees is Max Baucus, the Senate architect of ObamaCare. Three years after its passage, [a majority of Americans oppose the law]( – and by double-digit margins in many polls. False promises and a bush-league launch of a key element in the healthcare takeover have pulled Obama’s approval down to 40% and pushed his disapproval figures up to 53% according to the latest Gallup poll. And for what?

For political gain. ObamaCare was never about improving healthcare delivery. It was about ideology – a scheme to lay the groundwork for a single payer health system, the Holy Grail of liberalism.  That was a prize worthy of Obama’s overreach … and his political aspiration.

“Come; let us make a name for ourselves.”

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