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Obama Declares ACA Success in JAMA, Calls for Taking Steps to Reduce Drug Costs

Mary Caffrey
The president predicts that in 20 years, the nation will look back on "Obamacare" as a moment of courage that has improved people's lives.
President Barack Obama today declared in a special issue of JAMA that the Affordable Care Care (ACA) has worked, both by driving down the share of Americans without health coverage and by “transforming healthcare payment systems,” that are improving quality and reining in spending.

The president’s article, “United States Health Care Reform: Progress to Date and Next Steps,” highlights what he sees as the achievements of the signature law often called "Obamacare," while calling for more work to cut prescription drug prices and fill gaps where market competition is lacking, perhaps with a "public option."

“Americans can now count on access to health coverage throughout their lives, and the federal government has an array of tools to bring the rise of healthcare costs under control,” Obama writes. “However, the work toward a high-quality, affordable healthcare system is not over.”

The president writes of some of the ACA’s worst moments, such as the botched rollout of the HealthCare.gov website, but ends on a positive note. He predicts that in 20 years, “the nation will be better off because of having the courage to pass this law and persevere.”

Other contributors to the special issue are JAMA Editor in Chief Howard Bauchner, MD; Peter R. Orszag, PhD, of Lazard and formerly Obama’s chief of the Office of Management and Budget; Stuart M. Butler, PhD, MA, of Brookings and formerly of the Heritage Foundation; and a joint article by Jonathan Skinner, PhD, of Dartmouth College, and Amitabh Chandra, PhD, of Harvard.

Obama's article, which examined scores of publicly available records from 1963 to early 2016, finds that:

·         The ACA has reduced the ranks of the uninsured by 43%, from 16.0% in 2010 to 9.1% in 2015, “primarily because of the law’s reforms.”

·         The law has improved access to care by reducing the share of Americans 19-64 unable to afford care by 5.5 percentage points, and by reducing the amount of debts sent to collection by $600 to $1000 for each person who gained Medicaid coverage.

·         Health outcomes are improving, as the share of nonelderly adults reporting only fair or poor health has fallen by 3.4 percentage points.

·         An estimated 30% of traditional Medicare payments are now covered by alternate payment models, such as bundled payments or through accountable care organizations (ACOs).

·         Per-enrollee healthcare spending has slowed, with average spending for Medicare enrolling shrinking and private insurance spending rising 1.1% since 2010, compared with 6.5% from 2000 to 2005 and 3.4% from 2005 to 2010, part of which included a recession.

·         Events in the hospital—such as infections, bad drug reactions, and pressure ulcers—are declining, along with the rate of Medicare patients readmitted to the hospital within 30 days.

The president acknowledges the highly partisan fights over the ACA that have occupied much of his time in office. Two cases on the law's main features went to the Supreme Court of the United States, and other cases dealt with individual elements, such as coverage for birth control. He called on Congress to “avoid moving backward on health reform.”

“While I have always been interested in improving the law—and signed 19 bills to do just that—my administration has spent considerable time in the last several years opposing more than 60 attempts to repeal all or parts of the ACA, time that could have been better spent working to improve our healthcare system and economy,” he writes.

Critics of the ACA say it has unleashed a wave of consolidation that makes it hard for solo practitioners to survive and has raised costs for employers, burdening both businesses and insurers with too many reporting requirements. While overall healthcare spending may be flattening out, multiple studies show that cost-sharing for consumers is rising, and the “problem” in healthcare today has moved from dealing with the uninsured to the underinsured.

Orszag writes that the focus on cost-sharing overlooks the ACA’s protections against excessive overall out-of-pocket costs because more people are affected by higher deductibles. He also writes that the employer coverage market remained more stable than expected; one of the challenges of the exchanges is that, contrary to predictions, they have not been flooded with cast-offs from the employer market.

Meanwhile, consumers are increasingly asked to accept narrow networks of providers in exchange for lower premiums. And the ACA failed to address the problem of soaring prescription drug costs, which consumers of every ideological stripe say constitute one of healthcare’s greatest challenges. In his article, the president agreed.

Congress, he said, should act on proposals to boost transparency for drug manufacturers, increase rebates required for Medicare and Medicaid, and allow the federal government to negotiate prices for “certain high-priced drugs.”

Obama identifies other unfinished business, including the number of uninsured who still find healthcare unaffordable, the uncertain and changing dynamics of the Health Insurance Marketplace, the need for greater competition in the 12% of counties that lack at least 3 insurers; Obama argues this could be addressed through the public plan that was left out of the ACA. 

Bauchner’s letter introducing the issue says JAMA has published many articles critical of the ACA, but that adding 20 million to the ranks of the insured is noteworthy. It is too soon to say whether the law will make Americans healthier. “To date, robust, high-quality data clearly demonstrating substantial improvements in health outcomes directly related to the ACA have not been reported,” Bauchner writes.

The president concludes with a series of “lessons” for future policymakers: Change is hard. Partisanship makes it harder. Special interests “pose a continued obstacle to change,” he said, singling out the pharmaceutical industry. Pragmatism and simplicity are essential. The president writes of the early failings of HealthCare.gov, “we brought in reinforcements, were brutally honest in assessing problems, and worked relentlessly to get it operating.”

One sign of partisanship has been the split among the states on whether to expand Medicaid, a choice not envisioned in the ACA but one that resulted from the Supreme Court's first interpretation of the law. Republican-leaning states in the Deep South, which have some the highest rates of cancer and chronic disease, have largely bypassed expansion. Louisiana became the 31st expansion state, and the first in the Deep South, on July 1, 2016; however, Kentucky, an early ACA success story, appears ready to curtail Medicaid enrollment following the election of a Republican governor.

It's not clear that impeding the ACA has worked for Republicans, the president writes, "but it has clearly come at a cost for the country, most notably for the estimated 4 million Americans left uninsured because they live in GOP-led states that have yet to expland Medicaid."

Obama ends by saying that despite the many hurdles, the ACA process “makes me optimistic about this country’s capacity to make meaningful progress on even the biggest public policy challenges. Many moments serve as reminders that a broken status quo is not the nation’s destiny.”

Reference

Obama B. United States health care reform: progress to date and next steps [published online July 11, 2016]. JAMA; doi:10.1001/jama2016.9797.

 
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