President Obama on the ACA and next steps: what do we really need to improve our health?

On July 16, 2016, the JAMA took the unusual step of publishing an article by the President of the United States. “United States Health Care Reform: Progress to date and next steps”, by Barack Obama, JD, is by definition “political” and a defense of his administration’s health care policy and achievements, but it is also a well-documented piece of policy research. In it, the President details the improvements in both health care access and actual health status achieved by Americans since the passage (in 2010) and largely-full implementation (in 2014) of the Affordable Care Act (“Obamacare”), and provides evidence to support the central role of the ACA in creating those positive changes. He particularly notes that this improvement is not simply a result of improvement in the economy recovering from the Great Recession of 2008; this is supported by the fact that many indicators of breadth of coverage (what percent of people had health insurance), quality of coverage (how good was it), cost of coverage, and quality of care were getting worse for a long time before 2008.

The President provides data to demonstrate the increase in the number of insured people, especially in the 31 states that have expanded Medicaid. But coverage has expanded even in the others, due mainly to the availability of coverage on the Health Insurance Exchanges, the decrease in cost despite dire predictions for rate increases by insurers, the move (seen variably across the country) away from fee-for-service and towards comprehensive care reimbursement for health care providers, the decrease in the Medicare drug coverage (Part D) “donut hole”, the improvement in health status and quality outcomes from greater tobacco control, and many other positive results of ACA.

President Obama also bemoans the changes that the ACA was unable to achieve because of Republican opposition (while this could be perceived as partisan, it is fact, and fact strongly acknowledged by the Republican Party which has voted to repeal ACA dozens of times). He ends with a lengthy plan for the future, a future in which he will not be President, and what yet needs to happen to improve health and health care in the US. This includes the expansion of Medicaid to all 50 states, increasing competition in the marketplace so all Americans have access to a choice of plans, and limiting the control of special interests, especially drug companies:

The second lesson is that special interests pose a continued obstacle to change. We worked successfully with some health care organizations and groups, such as major hospital associations, to redirect excessive Medicare payments to federal subsidies for the uninsured. Yet others, like the pharmaceutical industry, oppose any change to drug pricing, no matter how justifiable and modest, because they believe it threatens their profits.

While the President does not call out the insurance industry as he does the pharmaceutical industry, he renews the call for a “public option” to compete with private insurance companies. He stops short of supporting a single-payer system, invoking “pragmatism” (defined as “we have to find something palatable to those who oppose change because they are doing so well now") “Simpler  approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all.”

When I am confronted by this pragmatism argument, I am somewhat sympathetic. Given the opposition both from Republicans in Congress and entrenched, wealthy and powerful industries (not only pharmaceutical and insurance, but also providers), the passage and implementation of the ACA was a formidable victory. All of the data cited by the President is true, and almost all of it is good. More people ARE covered, the quality of their coverage has improved, the cost to the system (and in most cases to individuals) has gone down, and there have been positive developments in the areas of quality improvement, fraud, and value, and moves away from fee-for-service to comprehensive care. The President led this effort and has the right to be proud, but the holes in the health system that remain are still very large.

For many people, good health insurance coverage is unaffordable; they buy policies on the exchanges that do not cover their needs when they get sick. For many others, there is still no coverage – most of those below 137% of poverty in states that have not expanded Medicaid, those without legal documentation, and some others. The powerful provider, insurance, and pharmaceutical industries have an outsized voice in determining health policy. The disorganized and fragmented nature of our health system and piecemeal nature of coverage and incentives for coordination of care, even with the ACA, lend themselves to healthcare industries (including doctors and hospitals) finding “work-arounds”, or “gaming the system”, for their self-interest.

The key, essential issue in considering past, present and future healthcare and health insurance reform is whether the goal is to maximize the health of the American people or something else (mainly, as I have suggested before, industry profit). There is a cohort of politicians, pundits, and commentators, who are ideological devotees of the unfettered market (and of Ayn Rand novels) who actually are against maximizing health for all; they may be unusually influential, but they are few. There is a larger group, the corporations who are believers only in their making profit, which means the free market only when it advantages them and government support of their industries when that advantages them. And, of course, there are the many politicians and pundits who are on their payrolls, direct or indirect (e.g., campaign contributions). Their role has always been powerful and is greater since the Citizens United Supreme Court decision that said corporations are people and money is speech.

But the largest group is regular people, trying to get by and trying to make sense out of these purposely-obfuscated policy issues. They include folks with and without insurance, like those who are interviewed by Dr. Paul Gordon on his Bike Listening Tour across America, who say things like “Obama Care helped the poor, but now the working class is struggling”. People who are trying to figure out what kind of insurance to purchase on an exchange, and very often opt for the plan with the lowest premiums that will take the least out of their monthly income so that they have more for food, housing, and other necessities as well as some entertainment or relative “luxuries”. And who only find out when they get sick how bad that coverage is, and how much debt they are going to be in, because they lost that gamble.

The reason for this is that, as I have often discussed (perhaps first in “Red, Blue, and Purple: The Math of Health Care Spending”, October 20, 2009), most people are, at any given time, not sick. Most people, especially younger people, will not be sick at any time for the whole year, or a number of years. Thus spending high monthly premiums for good (or better) coverage seems like a burden, and it is. Until, of course, they get sick. Until they get cancer, or get in a car wreck, or have a premature baby, or find their hitherto pretty-well-controlled chronic diseases spiraling downhill. Advocates of consumer choice may say “tough luck, that’s the market”, but this is people’s health. Consistently, surveys of the American (and most other) people find that the vast majority want everyone to have access to high-quality care when they need it – and even want it for “other people” that they don’t know. But the solution, even with ACA, forces them to gamble on their future health while ensuring that insurers and drug makers and the biggest healthcare providers make money. It is a plan to create fear and anxiety and insecurity, despite the accuracy of the overall improved health, and financial, picture that the President paints in his article.

There is a solution. It is indeed a single-payer system. One where everyone is covered, and pays what their incomes can reasonably afford, where the whole society is the risk pool rather than the individual, and people don’t have to gamble with their future health. We could have that, and most of us would relish it (like the vast majority of citizens of other developed countries who have it), and it would provide our only reasonable hope of truly controlling cost and improving quality.

But we are going to have to fight for it. Power does not relinquish control and money easily.

President Obama on the ACA and next steps: what do we really need to improve our health?

On July 16, 2016, the JAMA took the unusual step of publishing an article by the President of the United States. “United States Health Care Reform: Progress to date and next steps”, by Barack Obama, JD, is by definition “political” and a defense of his administration’s health care policy and achievements, but it is also a well-documented piece of policy research. In it, the President details the improvements in both health care access and actual health status achieved by Americans since the passage (in 2010) and largely-full implementation (in 2014) of the Affordable Care Act (“Obamacare”), and provides evidence to support the central role of the ACA in creating those positive changes. He particularly notes that this improvement is not simply a result of improvement in the economy recovering from the Great Recession of 2008; this is supported by the fact that many indicators of breadth of coverage (what percent of people had health insurance), quality of coverage (how good was it), cost of coverage, and quality of care were getting worse for a long time before 2008.

The President provides data to demonstrate the increase in the number of insured people, especially in the 31 states that have expanded Medicaid. But coverage has expanded even in the others, due mainly to the availability of coverage on the Health Insurance Exchanges, the decrease in cost despite dire predictions for rate increases by insurers, the move (seen variably across the country) away from fee-for-service and towards comprehensive care reimbursement for health care providers, the decrease in the Medicare drug coverage (Part D) “donut hole”, the improvement in health status and quality outcomes from greater tobacco control, and many other positive results of ACA.

President Obama also bemoans the changes that the ACA was unable to achieve because of Republican opposition (while this could be perceived as partisan, it is fact, and fact strongly acknowledged by the Republican Party which has voted to repeal ACA dozens of times). He ends with a lengthy plan for the future, a future in which he will not be President, and what yet needs to happen to improve health and health care in the US. This includes the expansion of Medicaid to all 50 states, increasing competition in the marketplace so all Americans have access to a choice of plans, and limiting the control of special interests, especially drug companies:

The second lesson is that special interests pose a continued obstacle to change. We worked successfully with some health care organizations and groups, such as major hospital associations, to redirect excessive Medicare payments to federal subsidies for the uninsured. Yet others, like the pharmaceutical industry, oppose any change to drug pricing, no matter how justifiable and modest, because they believe it threatens their profits.

While the President does not call out the insurance industry as he does the pharmaceutical industry, he renews the call for a “public option” to compete with private insurance companies. He stops short of supporting a single-payer system, invoking “pragmatism” (defined as “we have to find something palatable to those who oppose change because they are doing so well now) “Simpler  approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all.”

When I am confronted by this pragmatism argument, I am somewhat sympathetic. Given the opposition both from Republicans in Congress and entrenched, wealthy and powerful industries (not only pharmaceutical and insurance, but also providers), the passage and implementation of the ACA was a formidable victory. All of the data cited by the President is true, and almost all of it is good. More people ARE covered, the quality of their coverage has improved, the cost to the system (and in most cases to individuals) has gone down, and there have been positive developments in the areas of quality improvement, fraud, value, and moves away from fee-for-service to comprehensive care. The President led this effort and has the right to be proud, but the holes in the health system that remain are still very large.

For many people, good health insurance coverage is unaffordable; they buy policies on the exchanges that do not cover their needs when they get sick. For many others, there is still no coverage – most of those below 137% of poverty in states that have not expanded Medicaid, those without legal documentation, and some others. The powerful provider, insurance, and pharmaceutical industries have an outsized voice in determining health policy. The disorganized and fragmented nature of our health system and piecemeal nature of coverage and incentives for coordination of care, even with the ACA, lend themselves to healthcare industries (including doctors and hospitals) finding “work-arounds”, or “gaming the system”, for their self-interest.

The key, essential issue in considering past, present and future healthcare and health insurance reform is whether the goal is to maximize the health of the American people or something else (mainly, as I have suggested before, industry profit). There is a cohort of politicians, pundits, and commentators, who are ideological devotees of the unfettered market (and of Ayn Rand novels) who actually are against maximizing health for all; they may be unusually influential, but they are few. There is a larger group, the corporations who are believers only in their making profit, which means the free market only when it advantages them and government support of their industries when that advantages them. And, of course, there are the many politicians and pundits who are on their payrolls, direct or indirect (e.g., campaign contributions). Their role has always been powerful and is greater since the Citizens United Supreme Court decision that said corporations are people and money is speech.

But the largest group is regular people, trying to get by and trying to make sense out of these purposely-obfuscated policy issues. They include those with and without insurance, like those who are interviewed by Dr. Paul Gordon on his Bike Listening Tour across America, who say things like “Obama Care helped the poor, but now the working class is struggling”. People who are trying to figure out what kind of insurance to purchase on an exchange, and very often opt for the plan with the lowest premiums that will take the least out of their monthly income so that they have more for food, housing, and other necessities as well as some entertainment or relative “luxuries”. And who only find out when they get sick how bad that coverage is, and how much debt they are going to be in, because they lost that gamble.

The reason for this is that, as I have often discussed (perhaps first in “Red, Blue, and Purple: The Math of Health Care Spending”, October 20, 2009), most people are, at any given time, not sick. Most people, especially younger people, will not be sick at any time for the whole year, or a number of years. Thus spending high monthly premiums for good (or better) coverage seems like a burden, and it is. Until, of course, they get sick. Until they get cancer, or get in a car wreck, or have a premature baby, or find their hitherto pretty-well-controlled chronic diseases spiraling downhill. Advocates of consumer choice may say “tough luck, that’s the market”, but this is people’s health. Consistently, surveys of the American (and most other) people find that the vast majority want everyone to have access to high-quality care when they need it – and even want it for “other people” that they don’t know. But the solution, even with ACA, forces them to gamble on their future health while ensuring that insurers and drug makers and the biggest healthcare providers make money. It is a plan to create fear and anxiety and insecurity, despite the accuracy of the overall improved health, and financial, picture that the President paints in his article.

There is a solution. It is indeed a single-payer system. One where everyone is covered, and pays what their incomes can reasonably afford, where the whole society is the risk pool rather than the individual, and people don’t have to gamble with their future health. We could have that, and most of us would relish it (like the vast majority of citizens of other developed countries who have it), and it would provide our only reasonable hope of truly controlling cost and improving quality.

But we are going to have to fight for it. Power does not relinquish control and money easily.

Is the US health system about "health" or "profit"?

There are two forces at work in the system of health care delivery in the US which are essentially incompatible. One, which might be called the “health” approach, is focused on improving the health of the people. This could, should, and does include efforts to control costs, because this makes it possible to maximize the number of people who can benefit. This approach, which is codified in almost all international and most national health goals, seeks to use whatever resources exist (financial, structural, institutional, and human) to have the greatest health benefit for the most people. The World Health Organization (WHO) defines health as “…a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity”. A cornerstone of this is understanding that public health measures, which benefits populations, are generally of greater urgency and wider benefit than individual medical interventions.

While the need for a public health approach is perhaps more obvious for poor countries which lack, for example, clean water, it is no less important for wealthy nations such as the US; we just don’t usually think of the fact that we usually have clean water as a “health benefit”. As with many things, we are less likely to notice things that are good than those that are problems, and we relegate them to the background of our consciousness. We don’t wake up each morning saying “I’m glad I don’t have cholera because I have access to clean water!” Indeed, it is only when we travel abroad and have to use only bottled water, or when a crisis like the lead pollution of the water supply in Flint, MI grabs our attention, that we give this any thought at all. The result is that public health efforts pay the price; less than 6% of our US health expenditures are on public health, with the bulk spent on direct individual medical care, and the profit that insurers, providers and middlemen skim. In addition, our country spends much less, proportionally, on efforts that impact upon the social determinants of health, those characteristics of people’s lives (housing, food, safety, education) that affect people’s lives much more than health care.

Still, when we – or those we love – are sick and in need of medical care we are grateful that it is there. But for many or most of us, it is often hard to pay for it. When we cannot, when the incredible amount of money we have to pay for medical care (often even when we are insured) threatens our families’ well-being, our ability to pay for shelter, food, education, it is a different story. And we know that access to and use of such individual medical care is neither randomly distributed among the American people nor allocated based on the greatest need; no one is shocked to discover that rich people get more medical services. (What may be shocking to learn, however, is that this does not always lead to better health. Services are often delivered -- to those who can pay -- whether they are really necessary or not, and sometimes this leads to complications and worse health!)

It is in this context that a new study in the journal Health Affairs by Dickman, et al., “Health spending for low-, middle-, and high-income Americans, 1963–2012”[1] is very revealing. The authors provide data on both the amount health spending among the American people over that 50 years, and how it has been distributed by quintiles of income. To summarize the findings: in 1963, before Medicare and Medicaid, spending was heavily skewed toward wealthier populations, but after those programs were implemented spending became more equal among the quintiles (although, adjusted for disease burden, which is higher in low-income populations, it was still not equitable). Then, over the last decade studied, the spending gaps returned, with much more being spent on the upper than lower quintiles (despite the generally better hea

lth of those who are better off), for the population under 65 (presumably because those over 65 all have Medicare). The authors state that “The rising income-based disparity in spending suggests a shift from allocation of health care according to need to allocation by willingness (and ability) to pay,” and it clearly does. They add that “It is unclear whether this shift arises from the underuse of needed care among the poor or overuse of unnecessary care by the wealthy,” but I am going to go out on a limb and suggest that it is both.

The reason for this is the prominence of the second force at work in health care systems (you were wondering if I would ever get to this!), which I will call the “profit” approach. This approach looks at health care as a commodity to be purchased and marketed. Unsurprisingly, those taking this approach choose to preferentially market both certain services over others (those for which the reimbursement is much higher than the cost of providing them, called even in non-profit institutions the “profit margin”), and market them to certain populations over others (those with money or insurance, and relatively good health so there are less likely to be costly complications). While this approach tends to favor the wealthy, leading to the data presented by Dickman et al., it also favors the less sick. Since older people tend to be sicker than younger (and are covered by Medicare, which pays less well than private insurance), this may in part explain why the quintile-of-income differences are less for the elderly. In summary, health care providers (mainly hospitals and physicians, but also others), want to market the services on which they can make the most money to the people who, arguably, need them the least. You can have greater difficulty accessing care because you are the wrong person (too poor, too sick) or have the wrong condition (one for which treatment has a low profit margin).

Dickman and colleagues present their data fairly dispassionately, without hammering home the obvious conclusion that it reflects a society more driven by the “profit” than the “health” approach to health care delivery. Essentially, it is a story of half-hearted (called “practical” by its advocates) efforts to introduce greater equity into our health care system being overcome by the tactics that smart and well-paid insurers and providers employ to “game the system”. In his regularly outstanding “Quote of the Day” commentary on the Dickman article, titled “Redistribution of health care from the poor to the wealthy”, Dr. Don McCanne takes the discussion a little farther, noting that a single-payer health care system, in which everyone had the same coverage and which could regulate the marketplace, decreasing the profit incentive, would improve the population’s health.

When I wrote to Dr. McCanne that the effort to find ways to preferentially deliver high-profit care to well-insured high-income folks rather than those who needed it most upset me (OK, I said it made me want to puke), he wisely responded that it “seems like our health care system has excelled at creating ‘work arounds’ for those measures that health care justice advocates keep attempting to advance.” Usually when people use the term “work arounds” they are referring to finding ways to do what needs to be done in the face of bureaucracy or inefficiency. In this case, however, it means propagating inequity in order to make money.

The two different approaches, putting “health” or “profit” as the primary impetus to our health care system, get different results. Personally, I favor “health”. Sadly, though, the other is often more prominent.

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[1] Dickman SL, Woolhandler S, Bor J, McCormick D, Bor DH, Himmelstein DU, “Health Spending For Low-, Middle-, And High-Income Americans, 1963–2012”, Health Affairs 35(7):1189