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President’s Blog: The View from Here
Jan 25, 2017 | Christopher F. Koller, President
Dear Members of Congress:
As both Houses continue to debate whether and how the Affordable Care Act (ACA) should be repealed and what it would be replaced with, let me suggest three considerations for discussion.
1) Health Insurance Matters.
Your primary goal should be to get as many people covered as possible. That coverage should give Americans assurance that if they get sick they will not go bankrupt and will get needed care. That assurance is necessary for people to be fully participating citizens in this country—to be able to work, raise a family, and contribute to civic life. Having health care insurance also contributes to better mental health and a longer lifespan, both of which should be the goal of any health care system and society.
Providing a safety net health care provider system for the uninsured does not offer the same financial assurance to people as insurance. It does not provide the same access to health care, and reliance on it as a substitute for a public guarantee of financial protection erodes our social solidarity. Nor, as the Congressional Budget Office has noted, does an insurance policy with annual or lifetime limits constitute health insurance.
Disputes will ensue. What is needed care? Delivered by whom? What can we afford? How much should an individual or an employer be expected to pay? How do we get young and healthy people to participate and subsidize the old and the sick? How should states participate in financing and decision making? Perhaps a next iteration of the ACA will result in a more durable set of answers to these questions than the current version. But some form of health insurance coverage should be the primary goal of your efforts. The ACA has reduced the uninsured rate in the country by eight points, no mean feat. Your performance against that achievement will be the standard by which your efforts will be judged.
2) Health Insurance is Not Enough.
Our collective goal here is a longer lifespan for everybody in the US. Health insurance is necessary but not sufficient for that goal. And the news about lifespan in general isn’t good. The CDC reports that from 2014 to 2015 life expectancy in the US declined for the first time since the height of the HIV crisis. Declines were concentrated in lower socioeconomic classes—both for “deaths by despair” (deaths caused by alcohol, drugs, and suicide) and deaths caused by the increased burden of chronic diseases in general and heart disease in particular.
ACA reforms cannot be expected to address the spectrum of social determinants of health that are behind these mortality numbers, but they should not ignore them. The effects of ACA reforms on low-income populations merit primary consideration. If population health—our collective goal—declines because poor people are dying earlier, then making health insurance for the poor nonexistent, less comprehensive, or more expensive will make a bad situation worst.
3) It’s the Costs.
Your attention needs to be focused on the underlying costs of the health care system, not on how to shift costs to individuals, among people in a risk pool, from one payer to another, or between the state and federal governments. We spend more on health care than other countries, and our health care spending takes money from services that deliver greater social benefit and population health, like schools, roads, and housing. We spend more because we pay more for care—our hospitals are more expensive, our administrative costs are higher, and our ratio of primary care to specialist physicians is upside down. Even the most sophisticated effort to bring market forces to bear on this problem—by engaging consumers to make wise value-based choices—will not help the sickest 5 % of any insured population who drive 50 % of the pool’s costs.
Changing economic incentives for providers will help reduce health care costs. Financing requirements for the ACA allowed for the introduction of long-sought payment reforms in Medicare. The Center for Medicare and Medicaid Innovation has demonstrated that government innovation is not an oxymoron. The payment reforms for Medicare instigated by the Innovation Center are generating new knowledge, making it much easier for private payers and Medicaid to follow suit and—with some hits and misses— establishing a lower rate of per capita health care inflation. Payment reform in Medicare must continue if both state and federal governments are to see any relief from health care expenses that have confiscated funds from other public services.
These are high-level principles. They are hard for you to maintain and communicate when confronting a particular constituent with a particular problem—a high deductible, an expensive drug, or a steep premium—or a media person looking for a sound bite. Addressing the problem of why human creativity is often fleeting, H.L. Mencken said: “Explanations exist; they have existed for all time; there is always a well-known solution to every human problem—neat, plausible, and wrong.” For the problem of our expensive health care system that does not improve the health of our populations, it is important that your ACA deliberations avoid well-known, neat, plausible, and wrong solutions.
The Milbank Memorial Fund is an endowed operating foundation that works to improve the health of populations by connecting leaders and decision makers with the best available evidence and experience.
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