Congress could do a bi­par­ti­san health bill peo­ple re­ally like

Fail­ure to re­peal Oba­macare could open a path to ac­tion on the opi­oid cri­sis and med­i­cal costs, writes health econ­o­mist David Cut­ler

The Washington Post Sunday - - OUTLOOK - Twit­ter: @Cut­ler_e­con David Cut­ler is Otto Eck­stein Pro­fes­sor of Ap­plied Eco­nomics at Har­vard Univer­sity.

In ar­gu­ing for the Se­nate health-care bill, Ma­jor­ity Leader Mitch Mc­Connell (Ky.) re­port­edly warned his fel­low Repub­li­cans that if they didn’t pass it, they’d have to work with Democrats to shore up the Af­ford­able Care Act’s in­sur­ance ex­changes. It’s true that aban­don­ing ACA re­peal would be a big psy­cho­log­i­cal blow for a party that has cam­paigned on lit­tle else for the past four elec­tion cy­cles. But giv­ing up on re­peal would open the pos­si­bil­ity of mean­ing­ful ac­tion on health care that could gain the sup­port of a bi­par­ti­san con­gres­sional ma­jor­ity — and would be pop­u­lar with the public, too.

Repub­li­cans are never go­ing to get Democrats to agree to mas­sive cuts to Med­i­caid. And the sin­gle-payer health-care model fa­vored by many Democrats won’t get any­where in the cur­rent Congress. But health care is about more than in­sur­ance cov­er­age. And, look­ing at health care more broadly, there are two ar­eas where Repub­li­cans and Democrats en­thu­si­as­ti­cally agree: the need to ad­dress the opi­oid cri­sis and the need to lower med­i­cal spend­ing.

The opi­oid epi­demic — which en­com­passes ad­dic­tion to pre­scrip­tion painkillers, heroin and syn­thet­ics such as fen­tanyl — is the ma­jor public health is­sue fac­ing the coun­try. Nearly 100 peo­ple per day die of an opi­oid over­dose, and ex­perts pre­dict a con­tin­ued in­crease with­out pol­icy in­ter­ven­tion.

In a na­tional opin­ion poll con­ducted last year by my col­leagues at Har­vard’s T.H. Chan School of Public Health, 51 per­cent of re­spon­dents said abuse of painkillers was an ex­tremely or very se­ri­ous prob­lem in their states, and 52 per­cent said the same of heroin. Two in five re­spon­dents said they per­son­ally knew some­one who had abused pre­scrip­tion painkillers. And, es­pe­cially note­wor­thy for this dis­cus­sion, the level of con­cern and the re­ports of per­sonal ex­pe­ri­ence were sim­i­lar for Democrats and for Repub­li­cans, for peo­ple in cities and for peo­ple in ru­ral ar­eas, and for high-in­come house­holds and for low-in­come house­holds.

There is also gen­eral agree­ment on the steps that should be taken to ad­dress opi­oid abuse and ad­dic­tion.

En­cour­ag­ing physi­cians to pre­scribe fewer opi­oid drugs is one part of the strat­egy. Many peo­ple first be­come ex­posed to opioids through ex­cess pills of friends and fam­ily mem­bers. De­spite a mod­est de­cline in opi­oid pre­scrip­tions in the past five years, there is still about one opi­oid pre­scrip­tion per U.S. adult writ­ten an­nu­ally.

Strate­gies to re­duce the fa­tal con­se­quences of drug abuse are a sec­ond com­po­nent, in­clud­ing im­proved out­reach and in­for­ma­tion, nee­dle ex­change pro­grams, and in­creased ac­cess to over­dose-re­vers­ing med­i­ca­tions. In the law en­force­ment realm, there is an ur­gent need to shut down ma­jor sources of il­le­gally sup­plied drugs, such as heroin and fen­tanyl. (There is no­tably low public sup­port for in­car­cer­a­tion of those who abuse opioids.) The fed­eral gov­ern­ment has started on th­ese poli­cies but has been held up by in­ad­e­quate fund­ing.

But by far the most costly part of the nec­es­sary opi­oid strat­egy is in­creased ac­cess to treat­ment. Peo­ple with opi­oid ad­dic­tions need men­tal health and sub­stance abuse care, as well as ad­di­tional physi­cian and hos­pi­tal care. ACA re­peal would limit ac­cess and re­duce gov­ern­ment fund­ing. Es­ti­mates sug­gest that in the ab­sence of the ACA, it would cost $183 bil­lion over 10 years to ad­dress the epi­demic. The re­vised Se­nate bill floated at the end of the week, in an ef­fort to win the sup­port of some mod­er­ate Repub­li­can hold­outs, in­cludes only $45 bil­lion for the opi­oid epi­demic. Thus, the Se­nate plan would amount to a sig­nif­i­cant short­fall in fund­ing for treat­ment.

Con­sis­tent with the im­por­tance of the is­sue, in the Har­vard poll noted above, 45 per­cent of Democrats and 37 per­cent of Repub­li­cans thought the gov­ern­ment should spend more on treat­ment pro­grams for peo­ple ad­dicted to pre­scrip­tion painkillers; only 17 per­cent of Democrats and 16 per­cent of Repub­li­cans thought the gov­ern­ment was spend­ing too much.

The sit­u­a­tion is sim­i­lar with re­spect to re­duc­ing med­i­cal costs.

Polling by the Kaiser Fam­ily Foun­da­tion has found that sig­nif­i­cant por­tions of the public re­port hav­ing dif­fi­culty af­ford­ing pre­mi­ums and de­ductibles and pay­ing med­i­cal bills. And Amer­i­cans, re­gard­less of party iden­ti­fi­ca­tion, think re­duc­ing how much in­di­vid­u­als pay for their care should be the “top pri­or­ity” for law­mak­ers. (In con­trast, “re­peal­ing the 2010 health care law” ranks rel­a­tively low for both Democrats and Repub­li­cans.)

Con­ser­va­tive and pro­gres­sive politi­cians have started singing the same cho­rus on costs. “Our goal is to give ev­ery Amer­i­can ac­cess to qual­ity, af­ford­able health care,” House Speaker Paul Ryan wrote in a March op-ed that sounded a lot like the case Pres­i­dent Barack Obama made for the Af­ford­able Care Act.

The ACA in­cluded sev­eral pro­vi­sions in­tended to lower med­i­cal costs. Medi­care pay­ments to some providers were re­duced, and var­i­ous demon­stra­tion pro­grams were cre­ated to ex­per­i­ment with value-based pay­ment. The law had some suc­cess. Cost growth slowed af­ter it went into ef­fect, with stud­ies show­ing at least part of this was a re­sult of the ACA changes. But the job is not re­motely fin­ished. Growth slowed less than many hoped, and spend­ing in­creases have be­gun tick­ing up again in the past three years.

It is vi­tal, how­ever, to dis­tin­guish be­tween cost shift­ing and cost cut­ting. The Repub­li­can pro­pos­als en­gage in cost shift­ing. Healthy peo­ple pay less when they do not have to pool with the sick, but sick peo­ple pay more. Pre­mi­ums fall when cov­er­age is al­lowed to be less gen­er­ous, but out-of-pocket costs rise. Fed­eral spend­ing de­clines when Med­i­caid is cut, but states or pri­vate pay­ers have to pick up the tab.

To truly cut costs, we need to ei­ther have fewer sick peo­ple or make ill­ness less ex­pen­sive. There are ways to do this that both par­ties sup­port.

We can start by tack­ling the enor­mous ad­min­is­tra­tive ex­pense of health care, which ac­counts for about one-quar­ter of med­i­cal spend­ing. Con­sol­i­dat­ing the plethora of re­port­ing re­quire­ments would be a wel­come step, as would au­tomat­ing bill pay­ment and pre-au­tho­riza­tion re­quire­ments. In other in­dus­tries, ad­min­is­tra­tive costs have fallen when the dom­i­nant buyer re­quires stan­dard­ized pro­cesses as a con­di­tion of do­ing busi­ness; think about Wal­mart in re­tail­ing. In health care, the fed­eral gov­ern­ment could eas­ily play this role.

Ex­or­bi­tantly high prices are a sec­ond area where fed­eral pol­icy is cru­cial. From phar­ma­ceu­ti­cals to physi­cians to hos­pi­tals, mar­ket power is associated with higher prices for con­sumers. Congress could do a great deal to ad­dress this: leg­is­lat­ing that uni­form qual­ity met­rics be ap­plied to all plans and providers to save on the ad­min­is­tra­tive has­sles of mul­ti­ple qual­ity-re­port­ing sys­tems; re­quir­ing plans and providers to sim­plify and pub­licly dis­play their prices; deny­ing ex­tra pay­ments to or­ga­ni­za­tions that scheme around fed­eral Medi­care rules. And, as both Hil­lary Clin­ton and Don­ald Trump talked about dur­ing the pres­i­den­tial cam­paign, Congress could al­low Medi­care to ne­go­ti­ate drug prices with man­u­fac­tur­ers, bring­ing prices in the United States closer to those in other coun­tries.

Fi­nally, Congress could ad­dress the in­cen­tives that en­cour­age too much care. Stud­ies con­sis­tently show that peo­ple re­ceive care well above what is rec­om­mended by med­i­cal guide­lines and even above what in­formed pa­tients want. There are a litany of changes that have been pro­posed to ad­dress this overuse, in­clud­ing med­i­cal mal­prac­tice re­form and pay­ments that re­ward bet­ter over­all out­comes in­stead of the num­ber of ser­vices pro­vided.

An agenda fo­cused on med­i­cal spend­ing could pay ma­jor div­i­dends. Es­ti­mates sug­gest that one-third or more of med­i­cal spend­ing in the United States is not associated with im­proved health. Elim­i­nat­ing this waste would be the equiv­a­lent of a $1 tril­lion tax cut an­nu­ally — a pro­gram the likes of which the coun­try has never seen.

Some of th­ese poli­cies could be en­acted if the ACA is re­pealed, but sub­stan­tial cost sav­ings would prove elu­sive. The his­tory of in­ter­na­tional health re­form is that cost con­trol takes place af­ter cov­er­age is made uni­ver­sal, not be­fore. Canada spent the same share of its GDP on health care as the United States did, un­til it im­ple­mented uni­ver­sal in­sur­ance cov­er­age; af­ter that, the trends di­verged. Mas­sachusetts fol­lowed its suc­cess­ful pro­gram to in­sure nearly all res­i­dents with an equally ground­break­ing ef­fort to re­duce med­i­cal spend­ing. In the few years since, the state has gone from cost growth well above av­er­age to be­low.

There is good rea­son for this. When a sig­nif­i­cant share of the pop­u­la­tion is unin­sured, gov­er­ments, in­sur­ers and providers are scared to re­duce spend­ing ma­te­ri­ally; they rightly worry that ev­ery pay­ment cut will harm those with­out cov­er­age. How many leg­is­la­tors will be will­ing to push for pay­ment re­form for ru­ral and in­ner-city hos­pi­tals when those hos­pi­tals are pre­oc­cu­pied with a loom­ing 25 per­cent Med­i­caid cut?

Ex­panded cov­er­age also helps with preven­tion. Be­fore the ACA, about one in four peo­ple was unin­sured at some point dur­ing a year. It is vir­tu­ally im­pos­si­ble for physi­cians and pa­tients to man­age chronic dis­ease well when pa­tient ac­cess to physi­cians and cost shar­ing for med­i­ca­tions changes so fre­quently.

Fi­nally, the cer­tainty that would be pro­vided by keep­ing the ACA would en­cour­age in­sur­ers to work on cost sav­ings. Many ob­servers have noted that in­sur­ers are wary of en­ter­ing the ACA’s ex­changes be­cause Wash­ing­ton keeps chang­ing the rules of the game. The same would be true with re­spect to em­bark­ing on new cost-con­tain­ment ef­forts.

On both sub­stan­tive and po­lit­i­cal grounds, there­fore, the course is clear. Congress should ac­cept the ACA as law and turn its full at­ten­tion to the public health and cost is­sues that stand in the way of se­ri­ous health im­prove­ments. The pill may taste bit­ter at first, but the ther­apy could work won­ders.


Po­lice ap­proach the home of an over­dose vic­tim in Chillicothe, Ohio, in March. The opi­oid epi­demic is the ma­jor public health prob­lem fac­ing the coun­try — and one of the few is­sues on which par­ti­sans agree.

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