The State of Healthcare in America

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July 19 (Bloomberg) -- John Sculley, partner at Sculley Brothers and Michael Spence of New York University examine the state of healthcare in America as we move closer to implementation of the Affordable Healthcare Act. They speak on Bloomberg Television's "Bloomberg Surveillance."

All big projects.

Are you optimistic we can get to a better state?

Well, i think you have to put it into context.

We've lived since the end of second world war with an employer based system that is a tax based incident to 95 million workers.

Then we bolted onto that a different health care system which is one that's made up of entitlements and mandates.

When you put those together you'll get derivitive effects.

The employers are rapidly moving to self insurance model because it will cost them less money and they have more flexibility in how they can deal with obesity, alcohol abuse, smoking and things of that sort.

So that's one big shift.

The other thing is there are a lot of things that just aren't working.

The obama care was based on the idea that young people would subsidize the older people who were joining the system, and the fact is that the young people are saying gee, maybe i'd rather pay the $2,000 penalty than to sign up for health care which will cost them a lot more.

So a lot of the assumptions that were built into the affordable care act are just turning out not true.

Completely untested business model, from your vantage point, health care technology, does this revamp of our entire health care system encourage newer and better technology in the health care space?

We actually see it as an opportunity, sara, because what's happening is that as the employers move to self insurance, they're also going to high deductable plans.

We've been in a world in the u.s. where people don't really pay attention to what things cost because the co pay is always there.

When you have $5,000 a year of deductables that before your co pay kicks in, you're going to start to pay attention to things and we think that opens up big opportunities.

Are we taking ourselves back to the 19th century where we say i'm not going to the doctor, i can't afford it?

No, i don't think so.

We already see that with urgent care clinics that weren't even around, there are 9,000 of those.

We did a survey, 24% of the population has been to the walk in urgent care clinic, an alternative to emergency departments, or not having your own doctor.

That's about equal to the penetration of the apple ipad.

You don't hear about them because there's no national dry cleaner brand, there's no national urgent clinic care brand.

Michael suspense, you have an interesting perspective because you live in milan, in italy, and you have experienced the european health care model, which many say the presidents plan resembles.

Yes, and for example in italy where i live, health care at least in the north, which is the better functioning part of the country works very well, i have to say.

It is a state sponsored model.

But what it's not is what john just described, this hybrid that was built up with sort of, you know tax-favored treatment then bolting on entitlements and stuff.

Ours is just goldberg kind of stuff.

I like the idea fsh for those of you younger, ruth goodberg was a cartoon with about 25 steps to get the thing to fall over down there.

I've got to ask the money question right now, is our health care cost going to go up or down?

Every single small business person we have talked to say up, up, up.

Do you agree?

Oh, absolutely.

The costs are going up, they were unrealistic assumptions.

People are already seeing, small business is already seeing the health care cost way beyond inflation and a lot of people are saying gee, we have to either let people go, not hire full-time people or go totem prayer workers.

Temporary workers is a booming part of employment in this country -- but isn't that a drag on our economy?

This is really important.

Professor suspense, is the temporary worker the same as a full time job?

Well, the evolving employment model, may be that it is.

It's part of the flexibility.

It's an economy built on specialized services being delivered so what used to be companies is kind of a supply chain now, yes.

I hope we can get both of you back together and we'll start with the discussion of temporary workers versus the iconic detroit-like full-time job.

This text has been automatically generated. It may not be 100% accurate.

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