When federal lawmakers agreed in 2010 to pass the Affordable Care Act, they recognized that the U.S. health care system was in desperate straits.
Not only was the cost of health care significantly higher than in other industrialized nations, but Americans were among the unhealthiest populations in the Western world.
Nearly four years later, the system remains in crisis. While the growth of health care spending has slowed, it is still climbing. And despite higher costs, Americans’ health outcomes have not significantly improved.
“Other wealthy nations achieve longer lives, lower infant mortality, better access to care, and higher care quality while spending far less,” states a January 2013 report by the nonpartisan Commonwealth Fund.
The Affordable Care Act was never intended to immediately halt these basic trends; improving health outcomes and quality of life while cutting costs is a tall order. But the nation’s volatile, partisan debate over what is popularly known as “Obamacare” seems to have missed that point.
The tech-savvy Obama administration was expected to deliver a user-friendly website that would increase Americans’ access to health care by subsidizing insurance coverage. But HealthCare.gov was a bug-ridden disaster. And many consumers have voiced “sticker shock” over the higher monthly premiums and higher deductibles of insurance plans for 2014 both on and off the online marketplaces, also known as health exchanges.
The stalled rollout has bolstered the new law’s opponents, including Sen. Ted Cruz, R-Texas, whose quasi-filibuster helped trigger a federal government shutdown last fall. Cruz has blasted the federal mandates on health insurance policies and vowed to “repeal every syllable of every word of Obamacare.”
“The most simple rule of economics is there ain’t no such thing as a free lunch,” Cruz told the Texas Tribune in 2012 when he was running for Senate. “Everything you mandate that an insurance policy cover drives up cost, which means there are more and more people that can’t afford to get insurance.”
But where does that leave us? Regardless of how you view the overall merits, regulatory strictures, or societal costs of Obamacare, consider these facts:
• In the United States, health care spending eats up nearly 18 percent of the gross domestic product, which is the sum of all goods and services produced in the country. This figure could reach 21 percent by 2023.
• On average, the United States spends twice as much on health care per capita, and 50 percent more as a share of GDP, compared to other industrialized nations.
• Americans, whose life expectancy is about 78.6 years, live shorter lives than their counterparts in Western European nations.
• Missouri is among the most unhealthy states in the nation, and provides among the fewest dollars for public health funding.
Such statistics are worse in poverty zones. The shortage of primary care physicians is felt the hardest in inner cities and rural areas, where uninsured residents and those enrolled in the Medicaid program have a difficult time getting doctor’s appointments.
The infant mortality rate in Pemiscot County in Missouri’s impoverished Bootheel is about 14 percent, according to the Delta Regional Authority. That statistic is echoed in the infant mortality rate of portions of north St. Louis.
“The poor in America, compared to other industrialized nations, don’t get as good care, don’t live as long, and are more likely to die younger,” said Thomas McAuliffe, a policy analyst for the Missouri Foundation for Health.
CONTROLLING MEDICAL COSTS
Health care spending gobbled up about $2.9 trillion in 2013. By 2023, it is likely to rise to $5.5 trillion, an increase of 90 percent over the decade, according to the Commonwealth Fund.
“There is broad evidence that much of that excess spending is wasteful,” the fund’s report states.
Stuart Guterman, the fund’s executive director, said the United States spends nearly $9,000 a year per person on health care, more than twice as much as either France or Sweden, countries that offer universal health care for its citizens.
“Better care in the end is the best way to get to lower-cost care,” he said.
But he and other experts concede that achieving cost savings from better care is a long-term strategy — and may take generations. To lower overall health care costs, the United States needs to find ways to keep more people healthy.
Former presidents Harry Truman, Richard Nixon and Bill Clinton all put forward health reform initiatives that failed to win congressional support. The Obama administration’s plan was passed by a slim margin, without any Republican support.
One of the primary aims of Obamacare was to decrease the percentage of uninsured Americans as a first step toward providing affordable health care for all. Studies have shown that adults with health insurance are more likely to visit a primary physician, receive preventive care, stay healthy and live longer lives than those without coverage.
According to the U.S. Census Bureau, roughly 50 million Americans, including 807,000 Missourians, were without health insurance coverage in 2011.
The majority of Missouri’s uninsured are low-income working adults in blue collar and service-collar industries, according to the Missouri Hospital Association.
Federal health officials hope that millions of Americans will buy a health plan on one of the new exchanges because of the law’s “individual mandate” to become insured or face a governmental penalty.
But the Massachusetts health reform experiment — nicknamed “Romneycare” because it was spearheaded by former Republican Gov. Mitt Romney — has shown that access alone to health care is not a panacea for fixing a broken health care system; it is only a first step. Seven years after mandating near-universal health insurance coverage for state tax filers, Massachusetts is still struggling to contain spiraling health care costs.
Since 2010, most of the Affordable Care Act’s market reforms to rein in abuses in the insurance industry have been implemented nationwide. Insurers can no longer exclude applicants because of their pre-existing conditions. Children under age 26 can remain on their parents’ insurance policies. Insurers can no longer apply lifetime or annual coverage limits. And insurance companies are subject to medical ratio rates that limit their administrative expenses.
But the Oct. 1 opening of health exchanges turned into a political nightmare for the Obama administration. Many consumers were unable to access HealthCare.gov, and only now, after three months of efforts to fix the website, is a growing number of applicants able to navigate the site and select a health plan.
MISSOURI’S POOR HEALTH
In the past two decades, Missouri’s health standing has plummeted. In 1990, Missouri’s health ranking was 24th in the nation. In 2013, Missouri’s health ranking was 39th among the 50 states and the District of Columbia, according to the United Health Foundation.
Missouri is in the bottom 10 among all states for stroke, high blood pressure, smoking, premature death, child immunizations, cardiovascular deaths, cancer deaths and public health funding.
In rural towns such as Poplar Bluff or Hayti, hospitals are caught in a vise: They receive shrinking reimbursements from the federal and state government for the care they provide to the poor; and if their quality metrics are below average, they receive even lower federal reimbursements.
According to medical experts, one factor contributing to the state’s poor health is its addiction to tobacco. Missouri’s rate of smoking is 24 percent, the United Health Foundation states. And it has the lowest tax in the nation on cigarettes, at just 17 cents per pack.
Missouri is also struggling with obesity. Missouri ranks 33rd for its high rates of obesity, according to the United Health Foundation.
The U.S. health care system excels in treating patients in crisis, such as those suffering heart attacks or cancer. But physicians have a much more difficult time preventing or treating chronic diseases such as diabetes and heart disease — two conditions that are often related with obesity.
Cardiology labs and cancer treatment centers are huge profit centers for hospitals. Medicare and private insurers pay top dollar to specialists who save or prolong the lives of patients in crisis, but much less to primary care physicians.
Heidi Miller, a primary care physician with St. Louis-based Family Care Health Centers, said the best path to lowering health costs is to reduce the number of emergency room visits and hospitalizations by investing in primary care.
“We’re focusing (as a society) on end of life care, rather than keeping people healthy,” Miller said. “There needs to be greater parity in reimbursement for talking to patients, engaging them, motivating them, winning their trust. It’s that trusting relationship that causes them to make healthy decisions.”
Still, many uninsured prefer to go to a hospital emergency room when they are ill, rather than sign up for government insurance coverage for the poor.
Efforts to streamline the delivery of health care have been hobbled by fights over politics and money.
The federal Medicare system covers 48 million elderly Americans at a cost of about $558 billion a year; the federal-state Medicaid programs cover 55 million poor at a cost of about $429 billion a year.
Responding to industry pressure, Congress has forbid Medicare from negotiating with pharmaceutical companies over the price of drugs.
Since 1966, Medicare has paid hospitals a specific dollar amount per procedure performed. But this pay-for-service system has wasted vast sums of money on unnecessary tests and surgeries. For decades, physicians have provided medical care to the elderly with little regard for cost and also resisted attempts by Congress to lower their fees.
Medicare is moving slowly toward an incentive system that will focus on a patient’s total costs for an episode of care, and health outcomes. Hospitals that deliver lower quality care will be penalized with reduced payments; hospitals that deliver high-quality care at a lower cost will make money on a treated patient.
Federal health officials are also encouraging health systems to experiment with the “accountable care organization,” or ACO — a network of providers that manages the health of a specific population of elderly patients. ACOs have built-in financial inducements to keep patients well, not just treat them when they are sick. But some health systems that have experimented with the ACO model have found that meeting the government’s new quality metrics doesn’t necessarily lower costs, at least in the short term.
Armed with electronic health records, regulators also have sought through the “HospitalCompare” website to provide consumers with better data about the quality and cost of care. The new law also calls for greater disclosure of financial ties between health entities including physicians, hospitals, pharmacists and drug makers.
Still, other factors tend to boost health care costs. Hospitals continue to buy physician practices, which gives them greater leverage to demand higher charges from insurers — and leaves consumers with fewer means to negotiate better prices. Larger health organizations have built huge infrastructures that pay costly salaries to administrators. And health insurers have grown accustomed to passing on higher prices to consumers.
Thomas Getzen, a Philadelphia-based health care consultant and executive director of the International Health Economics Association, said investing in primary care is “a sensible move in the right direction,” but it’s not a cure-all. “This is complicated stuff. No single initiative is going to do it,” he said.
Even if Obamacare’s rollout had been executed perfectly, Getzen and other analysts say, the new law would not have lowered the nation’s health care costs or solved its fundamental health issues.
The Institute of Medicine has concluded that, to improve the nation’s health, the government also needs to invest in preschool care, nutrition programs, assisted living for the elderly and other efforts to help the poor.
Two-thirds of Americans, including a growing portion of the young, are either overweight or obese. Young Americans may comprise the first generation whose lives on average are shorter than their parents’. But it’s not easy to stay fit, especially if one is poor, when “junk food” is heavily advertised and is often the most affordable food.
“There are some easy answers, but all the easy answers are really difficult,” said Getzen, stressing the economics of lifestyle choices. “All we have to do to get people healthier is have people eat better and exercise more. ... This is going to be hard work.”
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