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PPACA – another perspective

Let’s stipulate that the US health care “system” was and is a mess.  Our costs are about twice as high as other industrialized countries’, outcomes are not as good, and for consumers and purchasers, it is confusing as hell.

The question is, is PPACA making it better?

There’s no question the PPACA has a lot of flaws, several of which are being used for a series of legal challenges.  There’s a reason for that; PPACA wasn’t supposed to be the be-all and end-all bill.

The legislation that was eventually passed originated in the House, and it was only passed “as is” because Scott Brown won the Massachusetts Senate election and his seating forced passage of the House bill by the Senate.  (Brown’s election gave the GOP 41 seats, allowing for a filibuster)

I won’t get deeper into the political history of PPACA passage; wikipedia has a very good synopsis for those interested in more history. The net is, PPACA is here.  It is not going away.  And there are no alternatives out there that make any sense and/or have any chance of passage and adoption.

So PPACA has a lot of warts – so does pretty much every Congressional legislation.  We may not like it, it may drive us nuts, but it’s reality. Our legislative process is sausage-making at its finest. Or worst, depending on your perspective.

Pre-PPACA, our health care “system” was hurting our international competitiveness, driving up the Federal deficit and state and local expenditures, covering fewer and fewer people, and delivering lousy care to a large part of the US population.  Now, several years into passage, we’re starting to see indicators PPACA is having the desired effect.

Medical inflation remains relatively low.  I, and others, would argue that is in large part because of the systemic changes driven by PPACA.

Some factoids:

  • last year health care spending grew 3.6% – the lowest rate since 1960.
  • over the last four years, health care inflation has tracked GDP growth – compared to prior years when it was consistently higher than the GDP growth rate.
  • the system is getting better – serious medical errors declined by 17% between 2010 and 2013 – saving about $12 billion.
  • Medicare inflation is flat.  In fact, CBO projections for Medicare expenditures in 2019 have dropped by $95 billion over the last four years. As Medicare utilization isn’t really affected by the economy, that’s a pretty solid indicator that the program is more sustainable than we thought just a few years ago.
  • Medicaid costs are up – as we’d expect them to be.

Overall, things are improving, rather dramatically – but not without pain.  Narrow networks, lower earnings for some doctors, higher insurance costs for some employers and consumers, a financial squeeze for many hospitals, all are real and painful.

What does this mean for you?

Fixing very big problems is ugly, thankless, and rife with collateral damage.  It’s also absolutely necessary.


4 thoughts on “PPACA – another perspective”

  1. This article is very good, however we can’t ignore the fact of the impact of High deductible plans and the cost shift that has and continues to put more financial pressure on the consumers. This is evident in the recent CMS report from Gallup that shows that one in three Americans decide against medical care because it is too expensive. “Despite a drop in the uninsured rate, a slightly higher percentage of Americans than in previous years report having put off medical treatment, suggesting that the Affordable Care Act has not immediately affected this measure,” explained the report. Most individuals would agree that access has been addressed, however the major drivers for the cost curve bend are still being investigated. Bottom line, the focus should continue to be on outcomes based models that put the right level of care, on the right population, at the right time at the right cost…..

  2. Joe,

    You left out a very important problem with the law. That is, if a person lives in a state that has not accepted the Medicaid expansion, and an individual applies for coverage, only to be informed that if they have not filed a tax return and have no income, they are not eligible for the subsidy, even though they were determined to be eligible to go to the federal marketplace. In addition, I think it is highly insulting that white collar professionals such as myself who are not working cannot get on a better plan and have to settle for Medicaid, if they happen to live in a state that expanded it. The numbskulls who drafted this piece of dreck should have known, or at least many of us could have told them that the GOP governors would never expand Medicaid, and that they should have included the unemployed with no taxable income as eligible to be covered. This happened to me last year, and it is happening again this year, and both times I have complained to my local congressman’s office. I am still waiting for a reply from their inquiry to HHS. When the law was passed in March 2010 I was a supporter, now I am getting very close to be opposed to it and want to see it changed. The time for a single payer system is near, the PPACA is discriminatory and engages in adverse selection, just as many for-profit health care insurance plans did, only now it is the unemployed white collar professionals who are long-term unemployed who are adversely selected out.

    1. Richard – as I noted, this was never supposed to be “the plan” but was one version which was to be balanced against the Senate version in conference.

      As to your outrage that non-working white collar professionals have to “settle” for Medicaid and cannot get a better plan, I’m confused. You can always pay for a plan on your own if you so desire. Otherwise, I don’t know why you’d be insulted to be offered Medicaid.

  3. While a supporter of the ACA, it is only because the prior system was deeply problematic with respect to the uninsur. Access issues have been addressed but structural issues with our system remain broken.

    It is a good start but left many of the basic problems intact. Anything that seriously impacts our system will be fought tooth and nail at every level, since reducing the health spend from present levels would be massively disruptive to many powerful constituencies. If you think the ACA was fought, imagine what would happen if reform that took costs out of the system rather than keeping up, were proposed.

    We are still at 18+ percent of GDP for health care costs which unless we see the economy grow in excess of health care inflation for a number of years, will keep us an outlier forever. Patients have little skin in the game, the system lacks pricing transparency, and most importantly, a quarter to a third of health care has no value or negative value according to a number of views. In virtually all other areas of consumption, the consumer is the payer and the sellers work hard to earn their business. Not so in health care. I encourage blog readers to consider reading the book “Catastrophic Care: Why Everything We Know About Health Care is Wrong”.

    It is a compelling, thoughtful read that describes the problems in a highly readable and convincing manner.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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