The cornerstone of our presidents legacy rests solely on the success or failure of his oft-publicized, debated about, & seemingly misunderstood health care policy. I have recently taken the time to learn a little more about some of the provisions and general ideas that exist in the bill and if I may not have been totally sold on the bill before, I have even more questions now.
The ACA is designed as a “multi-faceted” plan (with over 1000 pages in the law its not a stretch to believe this) that tries to deal with both small group and non-group individuals who may have fallen through the cracks of the health care system before; some may have been too young to enter into medicare or too close to the poverty line to qualify for medicaid, etc. The law fights to extend medicaid benefits to more people as well as make an effort to drive down other insurance costs due to its marketplace style reduction of informational asymmetries present in the old style health care system. (US Dept. of Health & Human Services).
It is not my goal here to explain the law in its entirety but rather to point out a couple of the parts of the law that aim to fight against market failure and maybe cast a light as to their effectiveness. One of the most interesting and recently written about issues is the promotion of preventative care as a tool to help drive down future costs for healthcare companies due to the fact that they now theoretically will be insuring those that have much larger future expected costs.
Thusly, it seems prudent to take a look at whether or not the logic behind the pushing of preventative care is actually sound despite what we may think at first glance. The first issue that comes to mind with the focus on preventative care is the new potential for the abuse of this care. A study in Oregon dating back to 2008 that simulated the extending of Medicaid benefits to include more people in the low income bracket as well as expanding coverage to make it more affordable to use a primary care doctor shows the problems that seemingly defy logic. Those people who won the lottery for expanded Medicaid benefits went to the emergency room a whooping 40% more than the part of the group who did not enjoy the benefits of expanded primary care coverage (NYTimes).
Another interesting facet of the cost/benefit focus of preventative care again comes from the New York Times, once again the thought that a focus on preventative care would deal with problems now in a more cost effective manner than would be used later does not seem so clear. Canadian women were separated into two different groups; one that would have regular mammograms and breast examinations and the other that would only have routine breast examinations and no mammograms. The doctors found at the end of the trial (which appeared in the British Medical Journal) that the death rate between both groups was in fact the same, which leads some researchers to question the cost effectiveness of this preventative approach to medical health. In fact, the researchers took things even further and hypothesized that the unnecessary treatments administered to women while obviously did not lead to lower healthcare costs, could also lead to harmful health effects from routine surgery as well as the fact that some cancers that are benign can turn malignant and spread after being biopsied. The article talks more specifically about the meaning of thing in the medical world and how treatment may or may not change, but I think its worth thinking about on a much broader level. If one of the main points of the Affordable Care Act is to reduce costs to both insurers as well as the insured, then it should probably be the case that it actually happens.
At first glance the focus on preventative would seem to be a good thing for insurance companies, but if stories like Oregon’s and Canada’s are true then it is the exact opposite. The focus on preventative care has the potential to create an entirely new segment of moral hazard that will have to be dealt with all of the while trying to deal with another.