Two celebrity health policy strategists squared off recently in Washington.
Avik Roy, a senior fellow at the Manhattan Institute who advised Mitt Romney in 2012, promoted the idea of reforming and expanding the Patient Protection and Affordable Care Act (PPACA) public exchange system, and rewriting the rules for the qualified health plans (QHPs) sold through the exchanges.
Uwe Reinhardt, an economist at Princeton University who is popular with Democratic health policy watchers, talked about a three-track strategy: Supporting public hospitals, public clinics and public insurance programs for the poor; letting wealthy people pay whatever they want out of their own pockets for “boutique practice” care; and using “reference pricing” for middle-income people.
In a reference pricing system, the insurer agrees to pay a set amount for a specified health care service. A patient must find a provider who provide the service for that price or else pay the difference between the reference price and the actual price.
The National Institute for Health Care Management (NIHCM) has posted written versions of Roy’s and Reinhardt’s presentations, and video recordings of their presentations and other speakers’ presentations, on its website.
Both Roy and Reinhardt agreed that the underlying cost of care is much higher in the United States than it is in other rich countries.
Roy said policymakers should start to tackle the cost problem by improving the public exchange system. He said insurers should be able to charge the oldest QHP buyers six times as much as they charge the youngest adult buyers. Today, the maximum age band ratio is 3 to 1.
Roy also supports relaxing the PPACA “essential health benefits” benefits package rules; allowing the sale of QHPs with a lower actuarial value; putting Medicaid acute-care enrollees in the exchange system; and offering veterans a chance to use QHPs rather than traditional programs for veterans.
Reinhardt said policymakers have to choose between turning their backs on the cost problem and ignoring it or rationing care. Using public programs for the poor is way for “politicians to ration care without ever having to admit it,” Reinhardt said.
Similar, use of reference pricing for the middle class “permits rationing of some health care by income class without anyone having to say so openly,” Reinhardt said.