Urban Institute analysis presents supporting evidence but leaves room for debate
Since the Affordable Care Act was created, critics have argued that the healthcare law fails to contain healthcare costs. A new brief from the Urban Institute presents evidence illustrating the ACA's cost containment measures, but leaves room for the debate to continue.
The brief's authors, Stephen Zuckerman, senior fellow, and John Holahan, director of the Health Policy Research Center at the Urban Institute, argue that the law contains costs through its provisions for management of competition in the health insurance exchanges; the reduction in annual market-basket updates for Medicare payment rates to hospitals, skilled nursing facilities, home health agencies and hospices and reductions in Medicare disproportionate share payments and payments to Medicare Advantage plans; and the excise tax on high-cost employer-sponsored insurance plans.
Other provisions in the healthcare law that have cost containment potential include the creation of the Patient-Centered Outcomes Research Institute, whose research could impact national health expenditures, and the Independent Payment Advisory Board, which has the power to make recommendations for Medicare payment cuts; the establishment of accountable care organizations and pilots exploring bundled payment structures; and provisions for reducing payments to hospitals with high readmission rates.
"One of the reasons we wanted to write this is that I just think the amount of things that effect the trajectory of cost growth have really been dealt with in this plan," said Holahan. "We don't know whether some of these things will (work at containing costs) and that's why I think you try a lot of things."
The ACA does feature cost containment measures agrees David Cutler, an economics professor at Harvard University who served as a healthcare policy adviser to President Barack Obama during the 2008 campaign, but the law doesn't go far enough. It just gets the ball rolling.
"This isn't like covering people. If you put out the money, you can cover people. It's very simple. ... So that's a kind of one and done thing," Cutler said. "Restructuring your health plan so that it works well, and using that to restructure the healthcare system so that it works well, is not a one and done thing."
"We need to get to a situation where people - Medicare, private insurers, healthcare providers - spend every single day thinking about 'how do I get better and cheaper,'" Cutler continued. "And that's not going to happen because of one piece of legislation - even if you let the world's best experts sit in a room and write it. That's just not the way it's going to work. It's going to be a process."
The possibility of continued, shared work on the process of healthcare reform and cost containment started by the ACA is one that excites William Hughes, CPA, a women's health practice manager based in Florida who describes himself as conservative-leaning and not a supporter of the law.
He acknowledges that the law does have cost containment measures, but he also believes it raises costs in some cases and it doesn't spread the responsibility of cost containment to all parties.
"I don't think there's enough onus - if that's the word - on the patients to help contain the costs. It's all being forced on the providers and the insurers," he said.
But some measure of success can be achieved through the law, he said, "if we're willing as a country and as a government to allow it to be a kind of living, breathing thing, where we can see what doesn't work and works and not double down on - as so many things have done in the past - double down on things that don't work."