Dartmouth Institute Faculty Evaluate the ACA, Talk Health Care Under Trump Administration
ACA repeal, what is ailing ACOs, and the (surprising) effect of drug prices on health care spending were among the topics covered at “Health Policy: The Future of the Affordable Care Act and Other Possible Changes to Health Policy,” an inauguration eve panel discussion co-sponsored by The Dartmouth Institute and the Tuck School of Business. Dartmouth Institute health economist Ellen Meara, PhD, opened the discussion by offering a brief assessment of how much the Affordable Care Act had done to improve access to health insurance and, ultimately, health care.
About 20 million people now have health insurance coverage with some minimum standards, including preventive care and mental health and substance abuse components, thanks to the ACA, she noted. Through 2014, approximately 2.3 million people had gained health insurance through the popular provision, which allows children to be covered under a parent or guardian’s health insurance plan up to age of 26. From 2009-2010 (pre-ACA effect), there has also been a “slight reduction” in the number of people not getting medical care due to cost.
However, Meara rated the ACA a “tepid” 6 out of 10 for increasing access to health care via Medicaid expansion. The ACA’s original intent to increase Medicaid coverage for individuals making 138 percent of the poverty level (about $12,000 a year) had been dealt a severe blow by the 2012 Supreme Court ruling, which gave states the option of refusing the ACA’s Medicaid expansion.
“There were 19 states that chose not to expand coverage after the Supreme Court ruling,” Meara said. “That’s making quite a statement to turn down that kind of money (from the federal government).”
Dartmouth Institute Professor Jon Skinner, PhD, then spoke to how well the ACA had addressed health care “affordability.”
“While the ACA has provided cost savings in a variety of ways, it didn’t quite solve the ‘affordable’ part,” Skinner said, adding that under the ACA, the vast majority of people who bought health insurance purchased high-deductible plans.
But, in his opinion, health insurance coverage could fall substantially under current Republican plans being proposed.
“The Republican plans involve giving people tax credits to buy insurance,” Skinner said. “But the problem is — and this has been backed up by behavioral economists — people respond to sticks more than carrots. So the concern is that modest tax credits will lead to healthy people exiting the individual market, which would then set off unsustainable premium hikes and further coverage erosion.”
If he were giving advice to the incoming Trump administration (which he’s not) on how to deliver lower insurance premiums and control healthcare spending, Skinner said he would look to price control — and not just controlling drug prices.
“Trump has talked about the need to negotiate drug prices,” Skinner said, “but even if you were to negotiate drug prices down by 10% (a significant accomplishment), that would lead to a 1 percent reduction in spending growth.”
To truly reduce health care costs, Skinner said, we need to reduce the prices of MRIs and hospital beds.
“I would tie prices (that hospitals and other providers of health services can charge) to Medicare prices, and say that you can’t charge more than 25 percent above Medicare prices,” he said. “That might make some hospital CEOs unhappy, but it would lower costs significantly, around 20%.”
When it came to another popular Republican proposal, transforming Medicaid by giving block grants and federal lump-sum payments to states to allow them to essentially run their own programs, Dartmouth Institute Director Elliott Fisher, MD, MPH, expressed skepticism.
“There is tremendous variation in the generosity of Medicare subsidies among states,” Fisher said. “That difference across states would lead to real concerns, so I would hesitate to give states that kind of authority without some guardrails.”
In order to address rising costs and uneven quality, we need to continue to address the obstacles posed by the fee-for-service payment model and fragmented care, Fisher said.
“The bottom line hasn’t changed (despite the change in administrations); we still need to work toward integrated (health care) delivery systems that are rewarded for improving care and lowering costs,” Fisher said. He added that it was also impossible “to reduce health care spending without reducing the number of people who work in health care.”
When asked about the performance of Accountable Care Organizations, the payment reform model he was instrumental in developing, Fisher said that the incentives implemented for those who participate in ACOs are in part responsible for their uneven performance in lowering costs.
“If you only have a 25 percent chance of getting rewarded if you participate in an ACO, why would anyone do it?” Fisher said, adding that, in his opinion, ACOs did better than one could expect with such weak incentives because they aligned with values of people who work in health care — providing better care at a better value.
Aaron Kaplan, MD, an interventional cardiologist at Dartmouth-Hitchcock and professor at Geisel School of Medicine rounded out the four-person panel. Tuck Professor Bob Hansen, PhD, served as the moderator.