Obama Evaluates Obama Care Positively Some Analysts Disagree With His Conclusions

In the August 2, 2016, issue of the Journal of The American Medical Association (JAMA) President Barack Obama evaluates the Affordable Care Act (ACA) commonly known as Obama Care. Obama rightly declares that under the ACA more Americans have received health insurance coverage. He claims that the quality of health care has improved and that newer forms of health care delivery such as Accountable Care Organizations (ACOs) and bundled payments will improve health care and lower costs. He proposes a public option in certain areas of the country where competition is limited.¹

Obama’s article, written in academic style, contains multiple graphs and tables and has 44 references. It is unlikely that Obama actually wrote the article himself but merely approved it. [See Editor’s Note.] Surely the leader of the free world has many more pressing problems than to spend many hours researching and writing a scholarly treatise about the Affordable Care Act. In my view it would have been more honest and more effective if he wrote an article in plain English that everyone could understand.

In the same issue are three editorials by analysts one of whom agrees with Obama’s assessment of the ACA and two who do not.

Peter Orszag, PhD, an economist and self-anointed expert on health care, was the main architect of Obama Care. As expected he agrees with Obama, and writes in strong support of the ACA.² But Orszag has serious conflicts of interest that undermine his credibility.

Orszag is a poster child for the Washington elite. Unelected to any office he and other so called “experts” move seamlessly from academia to government and to Wall Street.

In autocratic top down fashion these Washington elites determine the organization and goals of health care for the country. As the head of the Congressional Budget Office (CBO) and later the Office of Management and Budget Orszag persuaded Obama and other members of the team that designed Obama Care that fee-for-service was the main cause of high health care costs.³ Orszag predicted that capitation by means of Accountable Care Organizations and bundled payments would lower health care costs.

After his stint of working for the government, Orszag moved to Citicorp, a Wall Street investment firm, where he made close to $4 million per year (presumably paid on a fee-for-service basis.) More recently Orszag went to work for another Wall Street firm, Lazard, where he is advising Aetna Insurance Company on its controversial acquisition of Humana.

The American Medical Association (AMA) has strongly opposed this merger. The AMA wrote a 17-page letter to the Department of Justice that the proposed mergers of Aetna and Humana and Anthem and Cigna would lead to price increases, a reduction in health care quality, and less consumer choice of doctors in already too narrow networks.⁴

All medical journals require conflict of interest statements from authors. The JAMA article mentions that Orszag works for Lazard but there is no mention of Orszag’s work on insurance company mergers that are directly opposed to AMA policy. In the interest of full disclosure the article by Orszag should have stated this fact. Or the editor of JAMA Howard Bauchner, MD, should have rejected the article. In my opinion Orszag’s declaration of support for Obama Care for which he was the main architect is a self-serving screed on behalf of the insurance industry, Wall Street interests that he represents, and Qrszag’s own pocketbook.

The second critique of Obama’s article is by Stuart Butler, PhD, of the Brookings institution.⁵ Butler challenges Obama’s assertion the ACA has moderated health care cost increases. He points out that he and most analysts agree that the decrease in the rise of health care costs was not due to the ACA because the decrease preceded the enactment of Obama Care.

Butler states that the ACA should more appropriately be called the “Medicaid Expansion Act.” He asserts that under the ACA there has been “a large reduction in the number of uninsured individuals but that the sources of this coverage have been mainly due to Medicaid and the Children’s Health Insurance Program (CHIP).” Butler goes on to say that “Medicaid and CHIP will cover an estimated 17 million more people in 2016 than the Congressional Budget Office’s earlier assessment.” Furthermore, the ACA’s exchanges - the highly touted backbone of competition that was supposed to lower costs in the ACA - have enrolled 10 million fewer persons than expected. These surprising facts are almost never mentioned in the news media nor are they mentioned in the Obama and Orszag articles.

The reason for the lower enrollment in exchanges according to Butler is cost. He states that the premiums and out of pocket costs of the ACA exchanges are too high and beyond the reach of most Americans. Butler pulls no punches in his criticism of Obama Care: “For many households the president’s promise of affordable coverage rings hollow and has not been realized…Those choosing Bronze plans… have coverage in name only.” A recent report in the Wall Street Journal states that insurance premiums are going to rise even higher by 18% to 23% in 2017.⁶

The high cost of Obama Care was brought home to me recently by a patient with type 1 diabetes on both long-acting and short-acting insulin who said he could not afford health insurance for himself and his wife. He had avoided seeing me or any other doctor for over a year. He was a self-employed small business owner. He added that he could barely afford his medication which had almost doubled in the past few years.

The third editorial is written by Jonathan Skinner, PhD, of the economics department of Dartmouth College, and Amitabh Chandra, PhD, of the Kennedy School of Government at Harvard University.⁸ The first thing these authors note is the difference in Congressional support Medicare had in 1965 compared to the Congressional support of the Affordable Care Act. In 1965 Medicare was passed by a 313 to 115 margin in the House and 68 to 12 the Senate. By contrast the ACA barely reached the filibuster proof of 60 votes necessary in the Senate and passed by a 219 to 212 vote in the House.

Like Stuart Butler the authors state that the ACA cannot take credit for slowing the rise of health care costs because health care costs began to moderate before the ACA was enacted. Furthermore, they ominously note a recent study showed that health care costs as a percentage of the gross domestic product rose significantly between 2014 and 2016. They also say that it is far too early to draw any conclusions on whether quality has improved under the ACA.

In his book America’s Bitter Pill, Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Health Care System (reviewed in Missouri Medicine November/December 2015) author Steven Brill describes how the Obama administration, in order to get the ACA passed, bowed to the demands of the medical industrial complex comprised of hospitals, insurance companies, and drug companies. Obama’s brain trust stated that it was not politically feasible get the bill passed any other way. The bill was primarily intended to insure millions of Americans who would not otherwise have health insurance. Cost concerns would be addressed later. Obama and his brain trust believed competition would lower costs. Electronic health records through programs such as pay for performance and meaningful use would improve quality.

None of this has come about. There is virtually no competition under Obama Care. Instead monopolies have emerged from hospital consolidations and insurance company mergers. Drug company pricing is completely out of control. And just ask internists – actual doctors who treat patients, not MBAs - if the overall quality of care has improved with electronic health records. Perhaps EHRs will improve quality in the future, but they certainly do not improve quality in their current stage of development.

Obama’s strategy of getting people insured first and then figuring out how to pay for the insurance coverage later has not worked out. Basically, most of the new enrollees in the ACA are in Medicaid not in the exchanges. And the exchanges aren’t working. They’re not affordable for many Americans. And even at their currently unaffordable rates insurance companies have lost hundreds of millions of dollars. They are now asking for another bailout from the government.

Since Obama Care is unsustainable, what is the next step? Can the American people through the democratic process determine the kind of health care system that benefits them instead of self-serving Washington elites and their special interest clients? This election, more than any election in recent memory, shows that the public is opposed to maintaining the status quo in Washington. We’ll have to wait and see.

Biography

Arthur H. Gale, MD, MSMA member since 1976, is a Missouri Medicine Contributing Editor. He practices Internal Medicine in St. Louis.

Contact: agalemd@yahoo.com