Daily Archives: September 14, 2011

An Early Victory for Health Reform

When the Affordable Care Act was enacted, there was immediate and enormous uncertainty about how the law would be implemented, whether or not it would be successful, and how its success or failure would be recognized. Proponents pointed to economic theory and Romneycare in Massachusetts, suggesting that we’d see a decrease in the number of uninsured initially, followed–hopefully–by a reduction in the rate of health care spending growth. Opponents, meanwhile, shook their collective heads and began filing lawsuits over the constitutionality of the individual mandate, and those cases are still winding their way through the courts.

While the ACA is still in its infancy, with numerous provisions of the law yet to be implemented, there is now evidence that health reform is doing its job. To be sure, a tremendous amount of uncertainty remains, but the latest data from the U.S. Census Bureau shows that the number of uninsured Americans remains unchanged between 2009 and 2010. Though health reform critics might like to jump on that statistic and proclaim that the ACA has failed to cover more Americans, history proves otherwise.

The U.S. economy–while supposedly no longer in a recession–is far from robust. Historically, economic downturns coincide with increases in the number of uninsured, as people lose their jobs and, thanks to the design of our health care system, their insurance coverage. So, the unchanged number of uninsured masks what actually happened: Roughly 810,000 middle-aged adults, those ages 45 to 64, were likely let go from their jobs, didn’t yet qualify for Medicare, and ended up uninsured. Meanwhile, some 494,000 young adults, those ages 18 to 25, gained coverage, which seems to point to the ACA provision allowing children to stay on their parents’ plans until age 26 that went into effect in the fall of 2010. Of course, there may be other explanations, but the simplest explanation is likely the right one.

Assuming that the ACA continues to reduce the number of uninsured, the bigger question is what happens to costs after it is fully implemented. A large part of this will hinge on consumer behavior, and the news here is mixed. There is emerging evidence that uninsured patients don’t dramatically alter their care-seeking after gaining coverage. In some cases, this is a good thing. For example, in Massachusetts, the uninsured being served by community health centers continued to seek care there even after they were insured. That’s good news for the health centers, which would otherwise be left with an even heavier burden of uncompensated care than they currently face, and it’s good news for the health care system, because health centers are widely recognized as high quality, cost effective primary care providers. Expanding that model could help to bend the cost curve.

At the same, however, there is evidence from the University of Pennsylvania’s Dan Polsky and colleagues that the uninsured who become Medicare eligible don’t change their behavior either. In particular, they continue to have lower rates of physician office-visits and higher rates of emergency room and hospital outpatient department use. That’s bad news, because those sources of care are notoriously more expensive and present an obstacle to continuity of care.

Consequently, the future is uncertain. The promise of the ACA to reduce the number of uninsured remains intact, but what happens to health care costs will be determined largely by the actions of tens of millions of newly insured persons. If ever there was a time to help patients make informed decisions regarding their use of the health care system, that time is now.


The Consequence of Too Many Choices

I just read an interesting synopsis of a study over on the Health Affairs blog that I wanted to share with you. The link is here. Basically, giving seniors too many plan choices seems to overwhelm them, actually leading to decreased enrollment in Medicare Advantage. I’ll let you read the blog post for the details.

I guess the same rule doesn’t apply to the Eskimo King just down the street from my house. They have more than 300 flavors of soft serve ice cream, and there’s always a crowd. Of course, it’s possible that if they scaled back to say, chocolate and vanilla, the crowd would be even bigger.

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Posted by on September 14, 2011 in Uncategorized

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