It's time for some straight talk. Will President Obama's Affordable Care Act (ACA) reduce health care costs for millions of consumers across the country? The answer, based on hard evidence, is a resounding "no."
I don't believe any of the measures in the ACA designed to decrease costs will be effective. For example, one theory is that providing health care coverage would reduce visits to the emergency room, but the data shows the opposite. In fact, The New York Times reported this week that after obtaining insurance coverage, the number of patients treated in ERs actually increased. The same article showed that another idea, that using non-physician health care coordinators such as nurses and physician assistants would cut costs by $3 to $7 for each dollar invested, was inaccurate; a randomized study found costs actually rose by 4 to 11 percent.
This is not to imply that the ACA is all bad. Allowing children to stay on their parent's plan up to the age of 26, eliminating restrictions on those with preexisting conditions from getting coverage, and increasing the total number of people with health insurance are all positive changes. But contrary to the assertions of the administration, the ACA will increase costs.
In view of this, we have to look for equitable ways to provide high-quality care without further bankrupting the system. As I see it, there are two choices: We can either ration care, or be smarter about how we utilize expensive therapies or do both.
Rationing care would include cost-saving measure such as not offering dialysis for those over 65, limiting MRIs for certain indications, and restricting chemotherapy in cases where it would add less than a year to one's life.
Though unpalatable, these cuts would address the escalating health care costs caused by the implementation of the ACA. We must stop misleading the public: Although the ACA will improve coverage for many, it cannot be everything for everyone. Now that we've vastly increased the number of insured Americans, we cannot afford to provide expensive therapies to everyone. It's as simple as that. To claim that the ACA will decrease costs while increasing coverage is both illogical and untrue.
The second approach is to increase investments in clinical studies that explore alternative approaches to health care spending. While the Health Resources and Services Administration deals with that question, and has a grant program to do that kind of research, it has been relatively underfunded. For example, the U.S. spends about $2.4 billion a year on defibrillator implants but hasn't been willing to allocate $50 million to proposed studies that would consider the cases in which the implants are truly necessary. Such research could potentially save hundreds of millions of dollars, and yet the amount of money the ACA allocates for this and similar projects is embarrassingly small. We need to invest a great deal more into research that will show which treatments are beneficial, and which are extraneous.
It seems reasonable to restrict access to therapies that are not effective or cost-effective. If we are going to do any kind of rationing, then we need to ration the ineffective treatments or expensive therapies that do not do any better than cheaper ones. This may be politically incorrect, but Americans spend billions a year on supplements that may be useless or even harmful.
In a report released this week, the Congressional Budget Office estimates that the ACA would reduce the workforce by 2.5 million jobs. Many men and women, the analysis found, continue working primarily to maintain the health care benefits, and may decide to drop out if the ACA coverage is better than that offered by their employers. The analysis projects that employment will rise over the next decade, but "that increase will be smaller than it would have been in the absence of the ACA." Insurance costs for these Americans will now be subsidized by the taxpayer instead of by employers. Is this really progress?
However you slice it, ACA will not cut costs for the vast majority of working Americans, and it's time we acknowledge that unfortunate fact. Instead of burying our heads in the sand we should be putting them together to look for a viable solution.
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