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Merits of PPACA debated at Denver Post panel discussion

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How does the 2010 Patient Protection and Affordable Care Act affect access to health care coverage, the quality of care, the pricing of services and market innovations?

These questions, among others, were the focus of a debate at the offices of The Denver Post on September 20. Moderated by Michael Booth, a Denver Post health care reporter and former Colorado Governor Richard Lamm, the debate pitted Ezekiel Emanuel, a chief architect of the Affordable Care Act, against Linda Gorman, who represents a Denver-based free market think tank.

In his opening statement, Emanuel identified three problems with the current U.S. healthcare systems that PPACA seeks to rectify: (1) access to healthcare; (2) uneven quality of health care; and (3) unacceptably high costs.

Emanuel said that 50 million Americans are currently without healthcare because they lack insurance and therefore are prone to adverse health outcomes.

“In 2012, the U.S. will spend $2.8 trillion on health care,” said Emanuel, chair of the Dept. of Medical Ethics and Health Policy at the University of Pennsylvania and formerly a special advisor for health policy to Office of Management and Budget Director in the White House. “To put this into context, France is the fifth largest economy in the world. With 66 million people, they cover everything with $2.7 trillion.

“In other words, our health care system is the 5th largest economy in the world, and growing at 2% above our gross domestic product,” he added. “For these three reasons–limited access, uneven quality and run-away costs, the president committed himself on taking office to reforming the system.”

And, thus passage of the Patient Protection and Affordable Care Act, which was enacted in March of 2010. This “world historical event,” said Emanuel, will yield a far superior healthcare system by the time the time the law’s final provisions are phased in by 2020.

“With the U.S. Supreme Court upholding the mandate, everyone in America will have access to health coverage, whether through Medicaid, for those below poverty line; or through subsidized health exchanges for those above the poverty line.”

Emmanuel said that PPACA is already producing benefits. He pointed, for example, to provisions that permit adult children to remain on their parents’ health care policies until age 26 unless they can secure health care coverage through an employer; and to the 4 million $250 rebate checks the federal government is sending to seniors who occupy the Medicare Part D “doughnut hole.”

Emanuel touted other PPACA provisions. Among them: incentives that encourage the adoption of electronic medical records by doctors; a reduction in medical errors at hospitals; a lowering of readmission rates for discharged patients (which now average 20% nationwide); and the implementation of metrics to help patients assess the quality of service of health care providers

Turning to the most controversial aspect of the Affordable Care Act, the individual mandate to buy health insurance, Emanuel said that coverage of pre-existing conditions–a popular aspect of the law–would not be possible without the mandate.

“Most Americans don’t want health insurance companies preventing people who have an illness from getting insurance or paying too much because of pre-existing conditions,” he said. “You cannot have that prohibition on insurance companies without an individual mandate. It won’t work.

“There’s no way–economically or policy-wise–to cover preexisting conditions without the mandate,” he added. “What’s the Republican Party alternative? The GOP has never issued a [viable] alternative plan that addresses the key issues of access, quality and cost.” 

Linda Gorman, director of the Health Care Policy Institute at the Independence Institute, a state-based free market think tank in Denver, Colo., replied that the Affordable Act is badly designed and therefore should be jettisoned.

Linda Gorman PPACAChief among her complaints is that PPACA shuts off promising healthcare reforms that are underway in the states; that the law fails to contain healthcare costs as promised; and that it unnecessarily limits healthcare choices available to patients.

“If you’re an Obamacare architect, your solution is to limit individual choice,” she said. “Obamacare limits the types of treatments that patients can access, the doctors they can see, and the demand for health care services generally.”

To illustrate PPACA’s constraints, Gorman (left) noted that policies like the one she’s owned for the past 15 years are (except for those grandfathered under the new law) no longer permitted. PPACA also prevents access to less costly alternative solutions.

“Under PPACA, you must have a certain deductible and you must buy your children’s eyeglasses through your insurance policy,” she said. “Why should I pay a premium to an insurance company to buy my kids’ eyeglasses when I can go to Lens Crafters and do it for less? Obamacare takes that freedom away.”

Gorman added that PPACA will end market innovations in the states that promise to reduce to healthcare costs and yield better care. Example: outpatient and assisted living services. PPACA regulations are “so crushing,” she said, that innovations in these areas are likely to come to end.

Based on the experience in Massachusetts, which implemented a health care plan similar to PPACA under then Governor Romney, a similar outcome awaits urgent care centers, she said.

“Urgent care centers not controlled by the federal government are blossoming all over Denver,” she said. “If you try to access an urgent care center in Massachusetts, which I attempted to do, good luck. What we have in Denver does not exist in Massachusetts.”

Gorman added that PPACA will also put an end to experiments underway in the states to limit health care costs by allowing patients greater latitude in how they spend their health care dollars. PPACA price controls that limit what health insurers can charge for coverage, she added, will also squelch market innovation and access to services.

Gorman also blasted PPACA’s individual mandate and requirement to cover pre-existing conditions, the latter of which, she noted, undermines undermines’ insurers’ long-standing pricing models.

“Health insurers need to be able to price risk,” she said. “The only time that you have a problem or failure of insurance pools is when you control price and say that everybody must join the pool, regardless of their health status, at the same price.

“There is a tremendous amount of data that suggests that it is much less expensive to let insurers price risk, quote premiums for policies, and then subsidize people who can’t afford the insurance, rather than implementing price controls,” she added.

Emanuel countered that PPACA is helping to reduce healthcare costs in part by encouraging market innovations and demonstration projects like “bundled pricing” of multiple services or procedures; and by encouraging health providers to shift from a costly fee-for-service model to one that rewards health care outcomes.

“Because of experiments around the country provided by PPACA, the private sector for the most part is very actively pursuing its own efforts to transition from a fee-for-service model to more global or bundled payments,” he said. “There is much in the healthcare law that is moving us off fee-for-service, not only in the federal program, but also incentivizing the private sector to do the same thing.”

Emanuel added that PPACA will also reducing healthcare costs by eliminating cost-shifting: charging people who are insured more for services to compensate for indigent, uninsured patients who cannot afford to pay for care out of pocket.

“One of the great things about PPACA is that it eliminate cost-shifting,” he said. “When you get everyone insured under the law, you’ll see an end to this practice.”


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