JONATHAN COHN JULY 19, 2010
Washington Post columnist Robert Samuelson has written yet another column trashing health care reform, which means it's time for me to write yet another item on why (I think) he is wrong.
The subject of the column is Massachusetts, whose expansion of insurance coverage was a model for the expansion of coverage in the Affordable Care Act. Samuelson's argument is pretty straightforward: The reforms didn't really improve people's lives and they didn't reduce the cost of medical care. This, he says, is the likely future of national health care reform: People won't be much better off and, in the meantime, we'll still have no way to control the health care spending that's bankrupting the government and, eventually, the entire country.
Samuelson's belief that health care hasn't helped the residents of Massachusetts is consistent with what he's written before: He's often said reform advocates exaggerate the plight of the uninsured and under-insured. To back up his claim about Massachusetts, he cites a 2009 Health Affairs article by Sharon Long and Karen Stockley of the Urban Institute:
People have more access to treatment, though changes are small. In 2006, 87 percent of the non-elderly had a "usual source of care," presumably a doctor or clinic, Long and Stockley note in the journal Health Affairs. By 2009, that was 89.9 percent. In 2006, 70.9 percent received "preventive care"; in 2009, that was 77.7 percent. Out-of-pocket costs were less burdensome.
But much didn't change. Emergency rooms remain as crowded as ever; about a third of the non-elderly go at least once a year, and half their visits involve "non-emergency conditions." As for improvements in health, most probably lie in the future. "Many of the uninsured were young and healthy," writes Long. Their "expected gains in health status" would be mostly long-term.
Samuelson has consulted the right source. The Urban Institute's surveys are the best data we have on how reform in Massachusetts is going. But he dismisses the gains in access awfully quickly. It's not just that out-of-pocket costs went down. It's that people who need care are actually more likely to get it. As I wrote last year, during the reform debate:
According to a study that two Urban Institute researchers published this spring, the number of working-age adults reporting that they skipped care because of high costs fell from 17 percent to 11 percent in the first two years after the law took effect. The gap was even more dramatic among those eligible for subsidized insurance through the Connector--that is, people making less than three times the poverty line, or around $66,000 per year for a family of four. Among those people, the proportion skipping care because of cost fell from 27 percent to 17 percent. And that’s despite a rough leveling-off in the second year, most likely due to the fact that the recession meant lots of people were out of work and counting their pennies. When the economy rebounds, the number should decline even more.
Samuelson may disagree, but that's a pretty substantial improvement in access, particularly during a time of overall economic hardship. And while it's true people don't seem to be much healthier than they were, that's entirely unsurprising: To the extent access improves health, in ways that we can measure, it's going to take the form of people benefiting five or ten years from now because of care they get today.
But what about the cost? This is Samuelson's real beef. Massachusetts didn't try to tackle the cost problem when it expanded insurance coverage. It's made that attempt only recently. But the first serious effort to change the payment system for doctors and hospitals failed. Meanwhile, the governor is trying to browbeat insurers into lowering their rates, a strategy that Samuelson likens to blaming the middleman.
To Samuelson, this is a preview of what we can expect nationally:
Similar forces will define Obamacare. Even if its modest measures to restrain costs succeed -- which seems unlikely -- the effect on overall spending would be slight. The system's fundamental incentives won't change. The lesson from Massachusetts is that genuine cost control is avoided because it's so politically difficult. It means curbing the incomes of doctors, hospitals and other providers. They object. To encourage "accountable care organizations" would limit consumer choice of doctors and hospitals. That's unpopular. Spending restrictions, whether imposed by regulation or "global payments," raise the specter of essential care denied. Also unpopular.
Obama dodged the tough issues in favor of grandstanding. Imitating Patrick, he's already denouncing insurers' rates, as if that would solve the spending problem. What's occurring in Massachusetts is the plausible future: Unchecked health spending shapes government priorities and inflates budget deficits and taxes, with small health gains. And they call this "reform"?
A few things here. First, if the lesson from Massachusetts is that "genuine cost control is avoided because it's politically difficult" then fiscal disaster is inevitable. Health care costs are going to keep rising, no matter what we do. And if that's the case, I would certainly prefer a world in which people don't have to worry about paying their medical bills. It doesn't cost a lot to make that happen; the incremental cost of insuring the uninsured is a small fraction of health care spending.
But, as Samuelson himself acknowledges, the architects of the Affordable Care Act didn't punt on cost control, the way architects of the Massachusetts law did. On the contrary, President Obama and his allies fought pretty hard--defying hospitals, unions, and other interest groups--to keep cost control in the bill. The law includes an independent board to calibrate and ratchet down Medicare spending. It imposes a tax on high-end benefits, to push down private insurance rates. And then it introduces a host of smaller delivery reforms--everything from penalizing hospitals with high infection rates to encouraging the formation of more efficient group medical practices--that should make it possible to lower spending without lowering quality. The Congressional Budget Office, which takes a skeptical view of these changes, still estimates that health reform will reduce the rate of growth in health care spending--which, as Samuelson knows, is the key to controlling costs long-term.
Is it enough? No. Future lawmakers will probably have to build on those successes--to see which parts of cost control work and then double down on them. And that's assuming they don't repeal the less popular elements, as many skeptics fear. But Samuelson presumably could use his columnist's perch to make cost control more likely, by highlighting what's good about the bill and, who knows, giving some credit to the elected officials who fought for those elements. Instead, Samuelson dismisses both the law and its advocates, writing that "Obama dodged the tough issues in favor of grandstanding."
Update: Igor Volsky has more:
many hospitals and doctors may lobby against these changes, but in an era of ever growing health costs and deficits it’s not certain that they’ll succeed. For instance, the AMA has been trying to pass a permanent fix to the SGR for years, but has found itself rebuffed by lawmakers who have yet to find a way to pay for the overhaul. This same economic reality has contributed to the diminished clout of the AMA and has encouraged other providers to adopt the kind of outcome based reimbursement systems that Samuelson believes are so politically unfeasible.
Also read Nick Baumann at Mother Jones.