Debate Now An Unhappy Birthday for Obamacare?

[Foxfyre]

I do not believe the evidence supports either better healthcare--that is certainly not the experience of my family--or lower costs which is also not the experience of my family and, if we believe the sources I posted, is not the experience of most people.

What do you think the evidence does support? Seems rather unambiguous to me.

Are hospitals getting safer? Yes. ("U.S. hospitals make fewer serious errors; 50,000 lives saved")

Are hospitals improving on key quality measures? Yes. ("The Joint Commission: Hospitals make strides on core measures with more achieving 'top performer' status"; Hospital readmission rates heading in the right direction)

Are the docs and hospitals that teamed up to coordinated care under the ACA showing improvement on quality metrics? Yes. (ACOs continue to succeed in improving care, lowering cost growth)

The reason these things are measured in a systematic way is to offer an objective picture of what's happening to "most people."

And since Obamacare went into effect the emergency rooms are crowded and overflowing more than they were before and now the urgent care centers are being backed up too. Why? Because there are fewer doctors treating more patients and they usually won't take a patient on short notice.

First of all, as The Economist noted in "Shock treatment: A wasteful and inefficient industry is in the throes of great disruption" just a few weeks ago, lots of innovative options for lower-acuity health issues are springing up and/or expanding. That includes more and more retail clinics and urgent care centers, precisely to give people who don't need to be in an ER other options.

For injuries and illnesses that are more serious but not immediately life-threatening, lots of “urgent-care centres” are being opened as an alternative to going to a hospital emergency unit. Private-equity firms are pouring money into independent chains of centres. Merchant Medicine, a consulting firm, reckons that between them, these chains now have just over 1,500 urgent-care centres, up from about 1,300 at the start of 2013. The market is still fragmented but a national brand could emerge from one of the largest chains, such as Concentra or MedExpress.

Some hospital operators, seeking to cut their costs of care, and choosing to be among the disrupters rather than the disrupted, are also opening urgent-care centres. Aurora Health Care, a Wisconsin-based chain of hospitals and clinics, now has more than 30 of them.

Hospital operators are now facing a classic “innovator’s dilemma”, as described by Clay Christensen, a Harvard business professor. If they persist with their high-cost business model even as their customers discover that cheaper alternatives are good enough, they will be in trouble. According to Strata Decision Technology, an analytics firm, many hospital groups saw what was coming and started to cut their costs well before the provisions of Obamacare started to bite. One of the fastest movers is Advocate Health Care, a hospital operator from Illinois, which says it now earns two-thirds of its revenues from value-based payments.

Thus far the system is not being overwhelmed: Report: Doctors Not Seeing a Surge in New Patients Under ACA.

I'll refer you to my sources already posted for rebuttal to your sources. I have read ALL the argument supporting Obamacare. And have noted that yes some things do seem to be improving, and have also noted that none of the things that have been improving can be definitely linked to Obamacare. The best we can say is that Obamacare hasn't made everything terrible and may or may not have contributed to improvements. But we cannot say that the improvements would not have happened anyway with much less disruption and cost.

It is little comfort that they now project that Obamacare will cost less than they first projected when the reduction in the projected cost is still unsustainable and indefensible. (And even there the honest evaluators admit that Obamacare may not have anything to do with current costs being less than anticipated but the reason is far more likely the crappy economy that Obamacare has helped create or sustain.)

 

[Greenbeard]

I have read ALL the argument supporting Obamacare. And have noted that yes some things do seem to be improving, and have also noted that none of the things that have been improving can be definitely linked to Obamacare.

If in fact you've read what you say you have, then you know that what I'm talking about indeed is definitively linked to Obamacare.

The ACOs that are improving quality and starting to get a handle on cost growth are a creation of the ACA.

Preventable hospital readmissions started falling after the ACA linked hospital payment to their prevention.

Medical errors started falling (saving tens of thousands of lives) after the ACA brought hospitals together to implement new patient safety protocols and systems.

The innovators and startups mentioned above are explicitly forming in response to the new market opportunities created under the ACA.

It is little comfort that they now project that Obamacare will cost less than they first projected when the reduction in the projected cost is still unsustainable and indefensible. (And even there the honest evaluators admit that Obamacare may not have anything to do with current costs being less than anticipated but the reason is far more likely the crappy economy that Obamacare has helped create or sustain.)

To make an obvious point about sustainability: health spending as a share of GDP has been the same since 2009. It's been frozen at 17.4%. (Meanwhile, the expectation back in 2008 was that it would be 17.6% in '09, 17.7% in '10, 17.9% in '11, 18.0% in '12, 18.2% in '13, and so on.)

Spending and cost growth have slowed down, health care prices in some areas are now falling, and health insurance premium growth has never been lower (plenty of rating areas in the new marketplaces saw drops this year). And yes, that means the law itself costs a lot less than expected back when it passed.

You can pin your hopes on the idea that is just a coincidence and that it isn't working to restrain cost growth the way it clearly seems to be (why you'd be hoping for this, I'm not sure), but if you ignore the question of causality you still have to face the reality that health cost trajectory has never looked better than it has since the ACA passed. So that seems like a pretty happy birthday to me.

 

[Foxfyre]

I have read ALL the argument supporting Obamacare. And have noted that yes some things do seem to be improving, and have also noted that none of the things that have been improving can be definitely linked to Obamacare.

If in fact you've read what you say you have, then you know that what I'm talking about indeed is definitively linked to Obamacare.

The ACOs that are improving quality and starting to get a handle on cost growth are a creation of the ACA.

Preventable hospital readmissions started falling after the ACA linked hospital payment to their prevention.

Medical errors started falling (saving tens of thousands of lives) after the ACA brought hospitals together to implement new patient safety protocols and systems.

The innovators and startups mentioned above are explicitly forming in response to the new market opportunities created under the ACA.

It is little comfort that they now project that Obamacare will cost less than they first projected when the reduction in the projected cost is still unsustainable and indefensible. (And even there the honest evaluators admit that Obamacare may not have anything to do with current costs being less than anticipated but the reason is far more likely the crappy economy that Obamacare has helped create or sustain.)

To make an obvious point about sustainability: health spending as a share of GDP has been the same since 2009. It's been frozen at 17.4%. (Meanwhile, the expectation back in 2008 was that it would be 17.6% in '09, 17.7% in '10, 17.9% in '11, 18.0% in '12, 18.2% in '13, and so on.)

Spending and cost growth have slowed down, health care prices in some areas are now falling, and health insurance premium growth has never been lower (plenty of rating areas in the new marketplaces saw drops this year). And yes, that means the law itself costs a lot less than expected back when it passed.

You can pin your hopes on the idea that is just a coincidence and that it isn't working to restrain cost growth the way it clearly seems to be (why you'd be hoping for this, I'm not sure), but if you ignore the question of causality you still have to face the reality that health cost trajectory has never looked better than it has since the ACA passed. So that seems like a pretty happy birthday to me.

I will stand by my arguments and sources already posted, most of which disagree with yours. We obviously are not going to agree on this issue and circular arguments get really boring for me really quickly. I can appreciate that you have posted reasons to support Obamacare and I thank you for that effort. I just believe a lot of it isn't going to hold up in the real world. I hope you're right and I'm wrong about that.

 

[Sun Devil 92]

RULES FOR THIS DISCUSSION

1. No ad hominem. Affirm, criticize, or comment on statements made by Obama, politicians, commentators, writers, or other members, but do not comment on the character, credibility, motives, intent etc. of the person making the statement.

The experience of just about everybody I know plus the medical community I know simply doesn't support the hype promoted by those who are paid to or have vested interest in supporting the ACA.

Didn't take long for that rule to go out the window! Believe it or not, one doesn't need to be "paid to or have a vested interest" to see the overwhelming evidence that the American health system is getting better.

Coverage, quality/safety, and innovation have been climbing rapidly over the past five years, cost growth has sunk to all time lows. Insurers and health care providers are changing the way they do business, which has long-term potential to be extremely good news for just about everyone.

What green beard says on the surface is true but looks are deceiving. Most economists peg 75 percent of the lower costs to a poor economy.

The further we get from the 2007-09, the harder it gets to keep pinning the entirety of the unprecedented era of health care we're experiencing on it. 2014 was the best economic year since the late '90s on a variety of metrics (which, by the way, is itself quite contrary to the doomsday predictions about the ACA's economic impact that were made in the years proceeding its launch), yet underneath the enrollment growth the trend continued.

Here's the Altarum Institute (which tracks health spending and prices) in their latest monthly look at health prices:

For the HCPI as a whole, only 2 of the 10 components saw increases in price growth (nursing home care and dental services). Some of this downward pressure is related to economy-wide price behavior, seen most clearly with durable medical equipment price growth of only 0.2% and price growth for other nondurable medical products actually falling by 1.1%. Yet, the price behavior for hospitals and physicians suggests that something else is happening. Are we seeing the first signs of newfound health care efficiency via insurance exchanges, high-deductible health policies, transparency, and more keeping health care prices contained? Health care and economy-wide inflation are quite low for this stage of the business cycle recovery. January 2015 was the 67th month of economic expansion following the recession, yet we are barely off the decade-plus HCPI low. A return to 2% growth for the HCPI now seems further off in the future.

Meanwhile, here's the editor of Modern Healthcare just a few weeks ago noting what's becoming increasingly clear: "The spending slowdown is real":

Over the past two years, conventional wisdom presumed without offering much in the way of evidence that the lingering recession and the rise of high-deductible and narrow network plans explained the slowdown in healthcare spending, now in its fifth year.

Indeed, most economists and the media echo chamber repeatedly said rapid spending growth would resume once the economy picked up steam, which it has. But healthcare spending growth has not.

The argument that the slowdown was transitory had a shred of plausibility in the privately insured market, where reporting is much less transparent and the impact of higher costs on households—a very real phenomenon—takes time to unfold.

But now, finally, the Mr. Joneses at the Congressional Budget Office have come around to admitting that something is happening here, even if they don't know what it is.

Most media accounts last week focused attention on the CBO's significantly lower projections for spending on premium subsidies available under the Affordable Care Act. As recently as January, the government projected over $1 trillion would flow to low- and moderate-income households buying health plans on the exchanges over the next decade.

Now, the CBO projects it will be $209 billion less because of lower overall premiums and—surprise, surprise—a reduction in the number of people who will need coverage. Fewer small and medium-sized businesses are expected to drop coverage because, lo and behold, insurance has become more affordable for employers because of the slowdown. . .

Suggesting the slowdown was transitory never made sense when it came to Medicare. Most seniors are insulated from the vicissitudes of the business cycle. And the last thing anyone would call Medicare is a high-deductible plan with a narrow network. Yet the slowdown has been just as dramatic there as it has been in the private insurance market.

Even the CBO now admits that the healthcare system has begun delivering lower-cost care to seniors. A year before the ACA passed, the CBO expected the CMS to spend $725 billion in 2015. Last week, it projected this year's spending would be just $632 billion, or $11,429 for each of the program's 55.3 million beneficiaries.

Much of the lower costs are because they don't have the number of people enrolling that they anticipated so that subsidies are much less.

As I already noted in the post above, per enrollee spending has fallen by almost a quarter relative to the projections "sold" back in 2010. That's a number that's independent of enrollment.

Besides that, the cost growth slowdown has also showed up in Medicare. Medicare's enrollment isn't affected by external factors, its network is quite wide, its deductibles haven't changed (though its premiums have fallen over the past few years), and its enrollees are more insulated from transitory economic influences than the average working-age person with private sector insurance. And yet Medicare, too, hasn't been immune from the history-making: Per Capita Medicare Spending is Actually Falling.

Medicare spending isn’t just lower than experts predicted a few years ago. On a per-person basis, Medicare spending is actually falling.

If the pattern continues, as the Congressional Budget Office forecasts, it will be a rarity in the Medicare program’s history. Spending per Medicare patient has almost always grown more rapidly than the economy as a whole, often by a wide margin.

And this goes well beyond what the ACA needed to balance its books.

Pre-ACA, Medicare spending in 2014 was on track to be $710 billion.

Post-ACA (which required the program to slow growth and get more efficient), Medicare spending in 2014 was expected to be $652 billion.

In reality, Medicare spending last year was $600 billion. The slowdown is producing huge savings in Medicare, above and beyond what was statutorily required by the ACA.

In addition, the plans have a very narrow focus and the deductibles are significant. Many are foregoing care because they do not have the deductible, which may or may not be a good thing. One could say we are reducing unnecessary procedures or one could say people can't afford the care they need. Obamacare does not insure all the uninsured as was promised so we sort of have the same situation we had before obamacare. Green cannot argue that choice has not been severely restricted or that doctors en masse don't like obamacare. Can't see where those are positives. Plus the benefits seem to be a boon(or boondoggle depending how you see it) for the poor and just another cross to bear for the middle class, who will have to absorb the brunt of obamacare.

As far as I can tell, part of the "problem" is that most people have spent so long insulated from market dynamics in the health sector that they don't recognize it (nor like it) when it appears. Different networks have different costs associated with them. Opening up a real, functioning market means that insurers get to price different potential networks and offer different networks (at different price points) for your consideration. You as the consumer then get to choose one based on the mix of price and access to various providers that you want.

The exchanges have lots of broad network plans in them (generally, as a matter of economic fact, those will cost more), but they also have lots of narrower network options. The latter have proven popular because they tend to be less expensive--that is to say, in an open market people seem to generally value lower premiums over broader provider networks. That isn't restricting choice, that's giving people a choice. You don't have to choose a more expensive broad network plan, there are lower-cost options available if you want them. It seems many people do.

Yes, this is different than the norm in the employer space, where 1) employees generally don't get to make decisions, 2) employers err on the side of giving them more, and 3) the insurance costs more than the offerings people are flocking to in the exchanges (which, again, can be up to 20% cheaper for plans of equivalent benefits and generosity compared to employer-based plans). Turns out when they have to spend their own money--even if they're getting a subsidy to supplement--people in open markets are price conscious and show you what they really value. These market dynamics are absent in the employer-based world, where folks tend to be used to getting everything and (seemingly, other than in their lack of wage growth) not paying for it.

As for deductibles, those are what expose consumers to price when they interact with health care providers (up to now I've been talking about market dynamics in the insurance market). If you've got a $250 deductible and Provider A is offering a service for $1,200 while Provider B is offering that same service for $5,000 you have very little economic reason to choose one over the other, since you're effectively paying the same thing either way. You may even be drawn to Provider B's higher price for certain perverse reasons.

And Green I do not understand why posts like yours have no relation at all to my real world experiences. My premiums last year alone went up 20 percent. My wife's costs for blood pressure medicines have quadrupled. Many doctors won't take obamacare because they can't stay in business with its payments. So you are presenting a macro picture which leaves out the micro problems.

Are you in the open market? Did you shop around? Or are you in an employer-based plan (and, if so, is it fully insured or self-insured)?

Finally I love the diagnosis that says we really won't be able to evaluate its success or failure til many years down the road. So we have to destroy our healthcare system before we know we have destroyed our healthcare system. Please, call a shrink.

The health care system is about as far from "destroyed" as it can get. On most indicators, it's never done better than it's doing right now.

The experience of just about everybody I know plus the medical community I know simply doesn't support the hype promoted by those who are paid to or have vested interest in supporting the ACA.

Can you provide examples...however anecdotal.

My experience has been that my children now don't have health insurance where they had it before.

 

[Sun Devil 92]

The health care system is about as far from "destroyed" as it can get. On most indicators, it's never done better than it's doing right now.

What indicators and who agreed that they are the correct indicators ?

 

[Greenbeard]

The health care system is about as far from "destroyed" as it can get. On most indicators, it's never done better than it's doing right now.

What indicators and who agreed that they are the correct indicators ?

Take your pick.

Health care spending and cost growth has been at historic lows. Federal obligations for health care spending have fallen well below expectations. Insurance premiums for shoppers in the new marketplaces have fallen well below expectations.

Somewhere north of 16 million people (more to come) have already directly gained coverage under the ACA, millions more have benefited from its consumer protections and insurance rules.

Injuries/conditions to patients in hospitals have fallen as hospitals have gotten safer. Unnecessary readmissions to hospitals are falling as hospitals get better about treating health as something that doesn't end at their four walls. Care itself is being redesigned to better meet the needs of patients and to keep improving quality while holding down cost growth.

It's even showing up in the design of new hospitals, as the LA Times reported the other day in asking "how do you build a hospital for the era of Obamacare?"

The Affordable Care Act, passed in 2010, embraces the idea of reducing costly hospital visits by keeping people healthy, with checkups and inexpensive preventive treatments. Hospitals, according to this approach, should not be the centerpiece of a medical system, but rather the solution of last resort.

Under changes outlined by the Affordable Care Act, hospitals and doctors' payments are based more on keeping patients healthy. For instance, providers are paid a lump sum to take care of a patient over a period of time, so they profit when they prevent patients from getting sick, avoiding expensive care.

In a sign of the growing shift away from the traditional fee-for-service model, federal officials announced in January that Medicare, the government's biggest health insurance program, would handle half its payments based on quality of care by 2018.

Ghaly views the MLK campus as a set of concentric circles, with the hospital in the center. The facilities around the hospital are buffers sparing people the experience of spending a night amid blood-filled tubes and beeping monitors.

If you end up hospitalized, he says, "you have to be too sick for outpatient services, too sick for the preventative services, too sick for the community-based services."

"We want the hospital to be ... high-quality, safe and patient-centered," he says. "But, truly, we want no one to go."

Things are changing for the better pretty rapidly at this point.

 

[Foxfyre]

Things are changing for the better pretty rapidly at this point.

No for me or mine. So far I have not run across a single soul in real life who is not paying more out of pocket than ever for healthcare and not a single soul who thinks the system is better now that the ACA is almost fully into effect. I know a whole bunch who lost jobs, who had their hours cut back, who didn't get expected raises or bonuses, who lost their insurance coverage, and/or who lost their doctors as a direct result of the the ACA. My husband and I have spent sustantially more on healthcare under the ACA and we both lost our primary care doctors and my husband lost his cancer doctor as a result of the ACA. I have two doctor friends who took early retirement to avoid having to deal with the nightmare of additional rules and regs and red tape.

So people like us are pretty difficult to convince that the ACA has brought about changes for the better.

 

[Greenbeard]

So people like us are pretty difficult to convince that the ACA has brought about changes for the better.

It sounds like you attribute all of life's disappointments to the ACA. Someone lost a job? Must be the ACA! Someone didn't get an anticipated bonus? Must be the ACA! Someone near retirement age retired? Must be the ACA! Believe it or not, not all aspects of one's life are controlled by the ACA.

Perhaps you do pay a lot out of pocket. And you say your husband has cancer. Those may not be unrelated facts. If you're accessing services, yes you're going to have to pay out-of-pocket costs that someone who doesn't have any health issues won't. Yet those out-of-pocket costs are now legally capped under the ACA. Before they weren't.

There's an argument to be made that there are winners and losers under the ACA's insurance market reforms. But you're making it backwards. It makes overall costs a little higher than they would otherwise be for the young and the healthy, and it makes costs lower than they would otherwise be for the old and the sick. It sounds like you're on the winning side of that equation, whether you recognize it or not.

This is the cognitive dissonance here--I get the sense you're in favor of some sort of deregulatory alternative that "saves" money by allowing the young/healthy to avoid contributing to paying the costs of the older/unhealthy. That isn't going to improve your situation.

 

[Foxfyre]

So people like us are pretty difficult to convince that the ACA has brought about changes for the better.

It sounds like you attribute all of life's disappointments to the ACA. Someone lost a job? Must be the ACA! Someone didn't get an anticipated bonus? Must be the ACA! Someone near retirement age retired? Must be the ACA! Believe it or not, not all aspects of one's life are controlled by the ACA.

Perhaps you do pay a lot out of pocket. And you say your husband has cancer. Those may not be unrelated facts. If you're accessing services, yes you're going to have to pay out-of-pocket costs that someone who doesn't have any health issues won't. Yet those out-of-pocket costs are now legally capped under the ACA. Before they weren't.

There's an argument to be made that there are winners and losers under the ACA's insurance market reforms. But you're making it backwards. It makes overall costs a little higher than they would otherwise be for the young and the healthy, and it makes costs lower than they would otherwise be for the old and the sick. It sounds like you're on the winning side of that equation, whether you recognize it or not.

This is the cognitive dissonance here--I get the sense you're in favor of some sort of deregulatory alternative that "saves" money by allowing the young/healthy to avoid contributing to paying the costs of the older/unhealthy. That isn't going to improve your situation.

My husband does not now have cancer. But his cancer treatment when he did have it, under Obamacare, would have cost us a lot more than it did. And he very much trusted his cancer doctor who he still had periodic checkups with to ensure the cancer has not returned. It was cruel to have to unnecessarily lose him because of government overreach.

And as for my life's disappointments, that is frankly none of your busienss and you have no clue about them or what I relate to Obamacare. I am telling you what Obamacare has brought about for me and others I know up close and personal in real life. And no amount of theoretical 'feel good' propaganda about it will change how it is for me and mine in reality.

 

[KissMy]

To make an obvious point about sustainability: health spending as a share of GDP has been the same since 2009. It's been frozen at 17.4%. (Meanwhile, the expectation back in 2008 was that it would be 17.6% in '09, 17.7% in '10, 17.9% in '11, 18.0% in '12, 18.2% in '13, and so on.)

Spending and cost growth have slowed down, health care prices in some areas are now falling, and health insurance premium growth has never been lower (plenty of rating areas in the new marketplaces saw drops this year). And yes, that means the law itself costs a lot less than expected back when it passed.

You can pin your hopes on the idea that is just a coincidence and that it isn't working to restrain cost growth the way it clearly seems to be (why you'd be hoping for this, I'm not sure), but if you ignore the question of causality you still have to face the reality that health cost trajectory has never looked better than it has since the ACA passed. So that seems like a pretty happy birthday to me.

The ACA has certainly flat lined healthcare rapid price inflation.

 

[Sun Devil 92]

The health care system is about as far from "destroyed" as it can get. On most indicators, it's never done better than it's doing right now.

What indicators and who agreed that they are the correct indicators ?

Take your pick.

Health care spending and cost growth has been at historic lows. Federal obligations for health care spending have fallen well below expectations. Insurance premiums for shoppers in the new marketplaces have fallen well below expectations.

Somewhere north of 16 million people (more to come) have already directly gained coverage under the ACA, millions more have benefited from its consumer protections and insurance rules.

Injuries/conditions to patients in hospitals have fallen as hospitals have gotten safer. Unnecessary readmissions to hospitals are falling as hospitals get better about treating health as something that doesn't end at their four walls. Care itself is being redesigned to better meet the needs of patients and to keep improving quality while holding down cost growth.

It's even showing up in the design of new hospitals, as the LA Times reported the other day in asking "how do you build a hospital for the era of Obamacare?"

The Affordable Care Act, passed in 2010, embraces the idea of reducing costly hospital visits by keeping people healthy, with checkups and inexpensive preventive treatments. Hospitals, according to this approach, should not be the centerpiece of a medical system, but rather the solution of last resort.

Under changes outlined by the Affordable Care Act, hospitals and doctors' payments are based more on keeping patients healthy. For instance, providers are paid a lump sum to take care of a patient over a period of time, so they profit when they prevent patients from getting sick, avoiding expensive care.

In a sign of the growing shift away from the traditional fee-for-service model, federal officials announced in January that Medicare, the government's biggest health insurance program, would handle half its payments based on quality of care by 2018.

Ghaly views the MLK campus as a set of concentric circles, with the hospital in the center. The facilities around the hospital are buffers sparing people the experience of spending a night amid blood-filled tubes and beeping monitors.

If you end up hospitalized, he says, "you have to be too sick for outpatient services, too sick for the preventative services, too sick for the community-based services."

"We want the hospital to be ... high-quality, safe and patient-centered," he says. "But, truly, we want no one to go."

Things are changing for the better pretty rapidly at this point.

According to the metrics you've chosen.

I am not arguing that things have not gotten better (in my own life, my children have lost access to health insurance they once had (and liked....spare me the "junk plan" argument)).

All I am asking is what metrics are being chosen and have they thoroughly been vetted ?

The argument that hospitals have gotten safer could just as easily be self-serving if key measures are not comprehensive.

I'll pose the same question to Foxfyre.

 

[Foxfyre]

RULES FOR THIS DISCUSSION

1. No ad hominem. Affirm, criticize, or comment on statements made by Obama, politicians, commentators, writers, or other members, but do not comment on the character, credibility, motives, intent etc. of the person making the statement.

The experience of just about everybody I know plus the medical community I know simply doesn't support the hype promoted by those who are paid to or have vested interest in supporting the ACA.

Didn't take long for that rule to go out the window! Believe it or not, one doesn't need to be "paid to or have a vested interest" to see the overwhelming evidence that the American health system is getting better.

Coverage, quality/safety, and innovation have been climbing rapidly over the past five years, cost growth has sunk to all time lows. Insurers and health care providers are changing the way they do business, which has long-term potential to be extremely good news for just about everyone.

What green beard says on the surface is true but looks are deceiving. Most economists peg 75 percent of the lower costs to a poor economy.

The further we get from the 2007-09, the harder it gets to keep pinning the entirety of the unprecedented era of health care we're experiencing on it. 2014 was the best economic year since the late '90s on a variety of metrics (which, by the way, is itself quite contrary to the doomsday predictions about the ACA's economic impact that were made in the years proceeding its launch), yet underneath the enrollment growth the trend continued.

Here's the Altarum Institute (which tracks health spending and prices) in their latest monthly look at health prices:

For the HCPI as a whole, only 2 of the 10 components saw increases in price growth (nursing home care and dental services). Some of this downward pressure is related to economy-wide price behavior, seen most clearly with durable medical equipment price growth of only 0.2% and price growth for other nondurable medical products actually falling by 1.1%. Yet, the price behavior for hospitals and physicians suggests that something else is happening. Are we seeing the first signs of newfound health care efficiency via insurance exchanges, high-deductible health policies, transparency, and more keeping health care prices contained? Health care and economy-wide inflation are quite low for this stage of the business cycle recovery. January 2015 was the 67th month of economic expansion following the recession, yet we are barely off the decade-plus HCPI low. A return to 2% growth for the HCPI now seems further off in the future.

Meanwhile, here's the editor of Modern Healthcare just a few weeks ago noting what's becoming increasingly clear: "The spending slowdown is real":

Over the past two years, conventional wisdom presumed without offering much in the way of evidence that the lingering recession and the rise of high-deductible and narrow network plans explained the slowdown in healthcare spending, now in its fifth year.

Indeed, most economists and the media echo chamber repeatedly said rapid spending growth would resume once the economy picked up steam, which it has. But healthcare spending growth has not.

The argument that the slowdown was transitory had a shred of plausibility in the privately insured market, where reporting is much less transparent and the impact of higher costs on households—a very real phenomenon—takes time to unfold.

But now, finally, the Mr. Joneses at the Congressional Budget Office have come around to admitting that something is happening here, even if they don't know what it is.

Most media accounts last week focused attention on the CBO's significantly lower projections for spending on premium subsidies available under the Affordable Care Act. As recently as January, the government projected over $1 trillion would flow to low- and moderate-income households buying health plans on the exchanges over the next decade.

Now, the CBO projects it will be $209 billion less because of lower overall premiums and—surprise, surprise—a reduction in the number of people who will need coverage. Fewer small and medium-sized businesses are expected to drop coverage because, lo and behold, insurance has become more affordable for employers because of the slowdown. . .

Suggesting the slowdown was transitory never made sense when it came to Medicare. Most seniors are insulated from the vicissitudes of the business cycle. And the last thing anyone would call Medicare is a high-deductible plan with a narrow network. Yet the slowdown has been just as dramatic there as it has been in the private insurance market.

Even the CBO now admits that the healthcare system has begun delivering lower-cost care to seniors. A year before the ACA passed, the CBO expected the CMS to spend $725 billion in 2015. Last week, it projected this year's spending would be just $632 billion, or $11,429 for each of the program's 55.3 million beneficiaries.

Much of the lower costs are because they don't have the number of people enrolling that they anticipated so that subsidies are much less.

As I already noted in the post above, per enrollee spending has fallen by almost a quarter relative to the projections "sold" back in 2010. That's a number that's independent of enrollment.

Besides that, the cost growth slowdown has also showed up in Medicare. Medicare's enrollment isn't affected by external factors, its network is quite wide, its deductibles haven't changed (though its premiums have fallen over the past few years), and its enrollees are more insulated from transitory economic influences than the average working-age person with private sector insurance. And yet Medicare, too, hasn't been immune from the history-making: Per Capita Medicare Spending is Actually Falling.

Medicare spending isn’t just lower than experts predicted a few years ago. On a per-person basis, Medicare spending is actually falling.

If the pattern continues, as the Congressional Budget Office forecasts, it will be a rarity in the Medicare program’s history. Spending per Medicare patient has almost always grown more rapidly than the economy as a whole, often by a wide margin.

And this goes well beyond what the ACA needed to balance its books.

Pre-ACA, Medicare spending in 2014 was on track to be $710 billion.

Post-ACA (which required the program to slow growth and get more efficient), Medicare spending in 2014 was expected to be $652 billion.

In reality, Medicare spending last year was $600 billion. The slowdown is producing huge savings in Medicare, above and beyond what was statutorily required by the ACA.

In addition, the plans have a very narrow focus and the deductibles are significant. Many are foregoing care because they do not have the deductible, which may or may not be a good thing. One could say we are reducing unnecessary procedures or one could say people can't afford the care they need. Obamacare does not insure all the uninsured as was promised so we sort of have the same situation we had before obamacare. Green cannot argue that choice has not been severely restricted or that doctors en masse don't like obamacare. Can't see where those are positives. Plus the benefits seem to be a boon(or boondoggle depending how you see it) for the poor and just another cross to bear for the middle class, who will have to absorb the brunt of obamacare.

As far as I can tell, part of the "problem" is that most people have spent so long insulated from market dynamics in the health sector that they don't recognize it (nor like it) when it appears. Different networks have different costs associated with them. Opening up a real, functioning market means that insurers get to price different potential networks and offer different networks (at different price points) for your consideration. You as the consumer then get to choose one based on the mix of price and access to various providers that you want.

The exchanges have lots of broad network plans in them (generally, as a matter of economic fact, those will cost more), but they also have lots of narrower network options. The latter have proven popular because they tend to be less expensive--that is to say, in an open market people seem to generally value lower premiums over broader provider networks. That isn't restricting choice, that's giving people a choice. You don't have to choose a more expensive broad network plan, there are lower-cost options available if you want them. It seems many people do.

Yes, this is different than the norm in the employer space, where 1) employees generally don't get to make decisions, 2) employers err on the side of giving them more, and 3) the insurance costs more than the offerings people are flocking to in the exchanges (which, again, can be up to 20% cheaper for plans of equivalent benefits and generosity compared to employer-based plans). Turns out when they have to spend their own money--even if they're getting a subsidy to supplement--people in open markets are price conscious and show you what they really value. These market dynamics are absent in the employer-based world, where folks tend to be used to getting everything and (seemingly, other than in their lack of wage growth) not paying for it.

As for deductibles, those are what expose consumers to price when they interact with health care providers (up to now I've been talking about market dynamics in the insurance market). If you've got a $250 deductible and Provider A is offering a service for $1,200 while Provider B is offering that same service for $5,000 you have very little economic reason to choose one over the other, since you're effectively paying the same thing either way. You may even be drawn to Provider B's higher price for certain perverse reasons.

And Green I do not understand why posts like yours have no relation at all to my real world experiences. My premiums last year alone went up 20 percent. My wife's costs for blood pressure medicines have quadrupled. Many doctors won't take obamacare because they can't stay in business with its payments. So you are presenting a macro picture which leaves out the micro problems.

Are you in the open market? Did you shop around? Or are you in an employer-based plan (and, if so, is it fully insured or self-insured)?

Finally I love the diagnosis that says we really won't be able to evaluate its success or failure til many years down the road. So we have to destroy our healthcare system before we know we have destroyed our healthcare system. Please, call a shrink.

The health care system is about as far from "destroyed" as it can get. On most indicators, it's never done better than it's doing right now.

The experience of just about everybody I know plus the medical community I know simply doesn't support the hype promoted by those who are paid to or have vested interest in supporting the ACA.

Can you provide examples...however anecdotal.

My experience has been that my children now don't have health insurance where they had it before.

See my post #47

 

[Sun Devil 92]

So people like us are pretty difficult to convince that the ACA has brought about changes for the better.

It sounds like you attribute all of life's disappointments to the ACA. Someone lost a job? Must be the ACA! Someone didn't get an anticipated bonus? Must be the ACA! Someone near retirement age retired? Must be the ACA! Believe it or not, not all aspects of one's life are controlled by the ACA.

Perhaps you do pay a lot out of pocket. And you say your husband has cancer. Those may not be unrelated facts. If you're accessing services, yes you're going to have to pay out-of-pocket costs that someone who doesn't have any health issues won't. Yet those out-of-pocket costs are now legally capped under the ACA. Before they weren't.

There's an argument to be made that there are winners and losers under the ACA's insurance market reforms. But you're making it backwards. It makes overall costs a little higher than they would otherwise be for the young and the healthy, and it makes costs lower than they would otherwise be for the old and the sick. It sounds like you're on the winning side of that equation, whether you recognize it or not.

This is the cognitive dissonance here--I get the sense you're in favor of some sort of deregulatory alternative that "saves" money by allowing the young/healthy to avoid contributing to paying the costs of the older/unhealthy. That isn't going to improve your situation.

Please stay with one point.

If there are correlations to the encactment of the ACA, they should be identified.

I have yet to see a claim related to the ACA that hasn't been politically slanted.

If you can provide information that proves one point defintively...I would be grateful.

 

[Sun Devil 92]

So people like us are pretty difficult to convince that the ACA has brought about changes for the better.

It sounds like you attribute all of life's disappointments to the ACA. Someone lost a job? Must be the ACA! Someone didn't get an anticipated bonus? Must be the ACA! Someone near retirement age retired? Must be the ACA! Believe it or not, not all aspects of one's life are controlled by the ACA.

Perhaps you do pay a lot out of pocket. And you say your husband has cancer. Those may not be unrelated facts. If you're accessing services, yes you're going to have to pay out-of-pocket costs that someone who doesn't have any health issues won't. Yet those out-of-pocket costs are now legally capped under the ACA. Before they weren't.

There's an argument to be made that there are winners and losers under the ACA's insurance market reforms. But you're making it backwards. It makes overall costs a little higher than they would otherwise be for the young and the healthy, and it makes costs lower than they would otherwise be for the old and the sick. It sounds like you're on the winning side of that equation, whether you recognize it or not.

This is the cognitive dissonance here--I get the sense you're in favor of some sort of deregulatory alternative that "saves" money by allowing the young/healthy to avoid contributing to paying the costs of the older/unhealthy. That isn't going to improve your situation.

That is not what Fox has done. While her information is localized, your statement is an overgeneralization.

 

[Sun Devil 92]

There's an argument to be made that there are winners and losers under the ACA's insurance market reforms. But you're making it backwards. It makes overall costs a little higher than they would otherwise be for the young and the healthy, and it makes costs lower than they would otherwise be for the old and the sick. It sounds like you're on the winning side of that equation, whether you recognize it or not.

I appreciate the depth of your posts.

In this paragraph, you seem to be essentially admitting that the ACA insurance reforms create "winners" and "losers".

Some might argue that this isn't government's job. And I would agree. If that is really what has gone on here...and I am not convinced that it has.

Can you please point to what reforms you are referencing. It may be that the ACA has actually knocked down some of the artificial barriers that used to exist.

I do not believe we had a "market" driven system in the past. Insurance has always been heavily regulated. Maybe the ACA is helping this regard.

 

[Greenbeard]

The ACA has certainly flat lined healthcare rapid price inflation.

Agreed, although using a 70-year time period on your graph kind of obscures that point. But you're correct, flat lined is a pretty good word to describe the state of affairs since the ACA passed in early 2010.

 

[Greenbeard]

All I am asking is what metrics are being chosen and have they thoroughly been vetted ?

Vetted by whom? If you're talking about quality, yes we're generally talking about NQF-endorsed measures (or otherwise validated by CMS or AHRQ), as well as the measures the Joint Commission uses when it accredits American hospitals. On costs, we're talking about the actual spending numbers: national health expenditures, BLS data on health care pricing, KFF/HRET data on employer-based plan costs, data on the premiums in the new marketplaces, etc.

Can you please point to what reforms you are referencing. It may be that the ACA has actually knocked down some of the artificial barriers that used to exist.

I do not believe we had a "market" driven system in the past. Insurance has always been heavily regulated. Maybe the ACA is helping this regard.

To boil it down, the ACA is about 1) rationalizing markets, and ) rationalizing the financing and delivery of health care services.

On the insurance side, that means putting in place transparent, well-functioning markets. That bleeds into fostering market-oriented behavior on the provider side, since consumers have more financial "skin in the game" under the most attractively priced insurance plans and because hospitals are required to post prices.

On the care side it's shifting things in the direct of value-based payment that rewards outcomes and performance. Health care providers are responding by re-thinking and re-organizing care delivery. That means quality, health, efficiency, and long-term cost containment have all been put center stage.

These are large topics and there's lots of policy underlying each of those themes. So if you want to focus on one of those, pick one.

 

[Sun Devil 92]

All I am asking is what metrics are being chosen and have they thoroughly been vetted ?

Vetted by whom? If you're talking about quality, yes we're generally talking about NQF-endorsed measures (or otherwise validated by CMS or AHRQ), as well as the measures the Joint Commission uses when it accredits American hospitals. On costs, we're talking about the actual spending numbers: national health expenditures, BLS data on health care pricing, KFF/HRET data on employer-based plan costs, data on the premiums in the new marketplaces, etc.

Can you please point to what reforms you are referencing. It may be that the ACA has actually knocked down some of the artificial barriers that used to exist.

I do not believe we had a "market" driven system in the past. Insurance has always been heavily regulated. Maybe the ACA is helping this regard.

To boil it down, the ACA is about 1) rationalizing markets, and ) rationalizing the financing and delivery of health care services.

On the insurance side, that means putting in place transparent, well-functioning markets. That bleeds into fostering market-oriented behavior on the provider side, since consumers have more financial "skin in the game" under the most attractively priced insurance plans and because hospitals are required to post prices.

On the care side it's shifting things in the direct of value-based payment that rewards outcomes and performance. Health care providers are responding by re-thinking and re-organizing care delivery. That means quality, health, efficiency, and long-term cost containment have all been put center stage.

These are large topics and there's lots of policy underlying each of those themes. So if you want to focus on one of those, pick one.

How do you "put in place" well-functioning markets" ? The market always functions well, be definition. It is the definition of the market that can sometimes cause people trouble.

What "well-functioning markets" did the ACA put in place ?

 

[Sun Devil 92]

On the care side it's shifting things in the direct of value-based payment that rewards outcomes and performance. Health care providers are responding by re-thinking and re-organizing care delivery. That means quality, health, efficiency, and long-term cost containment have all been put center stage.

Let me start off by saying, I don't trust our federal government to manage anything correctly.

With that bias in mind, I find the idea that somehow the government showed the industry how to do better.....unbelievable.

With, admittedly, little knowledge on the inner workings of the ACA, I have seen people scream and yell about the evils of profit driven health care. I am not a large fan of it myself (in the form it had taken prior to the ACA). This is because insurance companies have utilized practices I find unfair and immoral (this would include cancellation of policies and the denial of insurance based on pre-existing conditions).

What you are saying is that there was a better system that appears to be a win-win in terms of:

1. Better health care delivery (through better insurance) for individuals
2. Increased profits or increased profit margins for insurance companies.

Now, if insurance companies don't like what is going on...then number 2 isn't true. I don't know what the case is. I am just pointing that out.

Your statement pointed to "value based payments". Did the insurance companies figure this out ? The government ?

If this is better for all, the question has to be asked....why didn't this show up before ? I trust that if this was better for insurance companies.....they would have figured it out a long long time ago.

So, I am somewhat skeptical of your statement only because it seems to fly in the face of my experience.

If you can point me to explanations (I've looked on the net briefly...I could not find anything by a source I trusted), I would be grateful. BTW: I don't trust anything that has ".gov" in it...or the Kaiser Foundation. I have no trust in right wing sources either.

 

[Greenbeard]

How do you "put in place" well-functioning markets" ? The market always functions well, be definition. It is the definition of the market that can sometimes cause people trouble.

What "well-functioning markets" did the ACA put in place ?

The deficiencies of the old individual market are well-known.

One of the great challenges in buying health insurance has been a highly fragmented market. Individuals and group purchasers lack a reliable means for seeing their choices in one place and in a manner that allows them to compare what the plans cover, which providers are in various plans’ practice networks, how cost-sharing might differ, and how numerous competing plans might compare on key measures of quality performance. Nor has there been an active, consumer-oriented system for assuring that insurance plans that are offered in the individual and small group markets provide comparable coverage, cover the benefits that are considered essential to any health insurance plan, have accessible provider networks, and are accountable for specific measures of health care quality.

The old individual market was built around individual rating. Products didn't have prices in any meaningful sense--those were formulated individually based on reams of paperwork the prospective buyer filled out. Real comparison shopping on price was thus not just time consuming but, in effect, impossible. Doubly so when you factor in that there was no basic consistency across products that would allow meaningful comparisons even if you could accurately price them.

As a result of those clunky dynamics, cost-shifting was the name of the game as insurers were incentivized to be as creative as possible in avoiding risk (skimping on benefits, turning away customers, etc). That's a system that tilts heavily in the direction of insurers (it's opaque and almost entirely at their discretion) and historically it's provided virtually no check on premium growth and no incentive for insurers to attack the underlying cost drivers affecting the health care system. Premiums in the individual market routinely grew at 10% per year or more under the old system. And the issue of all those locked out of participating in those markets is pretty well-explored at the this point.

The new markets move rating from the individual level to the community level, which means products now do have actual premiums that can be meaningfully compared against competing options. Products are grouped into metal tiers by actuarial value (a measure of generosity) and all must offer at least a baseline set of standard benefits, which again makes meaningful comparisons of competitors possible. And no willing buyer is locked out.

So at present the markets have transparency, real head-to-head competition now that there are real prices and comprehensible benefits/generosity , and enough structure to allow consumers to send (and sellers to receive) meaningful signals about price, quality, etc by the choices they make. And the price competition thus far has been very robust.