An Assessment
Abstract
The climate of healthcare and how it costs in the United States has changed a lot over the past decade. Most of this change came with the passage of the Affordable Care Act, a broad extension of Medicaid and a healthcare marketplace where pricing is more transparent and competitive. This has effectively closed the healthcare gap for a large number of Americans who could not afford to have healthcare insurance before, but the problem has not ended entirely. A highly partisan Congress forced the Act to have caveats and outs at the state level. This has allowed for conservative governors to disable a key component of the Act, extending Medicaid. Unfortunately, the states affected by conservative-ran governments tend to house the nation’s most impoverished people. Therefore, this observational assessment of government’s efforts to control healthcare costs will show varying results, and will also look to what the presidential frontrunner candidates propose to further lessen the burden of costs for both the American public and the healthcare providers.
Keywords: Affordable Care Act, Medicaid, marketplace, Congress, conservative governors.
The approach to healthcare in the United States has been contentious since the inception of modern medicine in the mid-nineteenth century. It has continually remained elusive to the impoverished or otherwise disadvantaged from the very beginning, especially starting with America’s first “great depression” in the 1880’s. Although much of the economy would recover from that particular financial crisis, healthcare for all did not. It was not until the second Great Depression of the 1920’s and 30’s that universal healthcare, outside of non-profit organizations, was approached by the government. President Franklin D Roosevelt came to the rescue with the New Deal, along with other acts, that social security, Medicare and Medicaid were begun. These mandates have held tough for the past century, despite remarkable efforts to downsize who these subsidies can actually help.
With healthcare costs more expensive than ever, and millions of people without healthcare, the U.S. elected President Obama -- who promised to overhaul the healthcare system to help bridge the gap for people who worked but could not afford healthcare, and whose employers failed to offer them any such benefits. The Affordable Care Act (ACA) was largely successful to people who lived in states where the Act was untouched by the state government. For other states, the gap has only grown wider. The ACA provided for an extension of Medicaid for those below specific income levels depending on family size, and the marketplace ensured that insurance companies would have to compete for customers. Overall, federal government has achieved great success in controlling healthcare costs for the country’s citizens, while states with obstructionist governments have failed miserably.
The Affordable Care Act
Before the passage of the ACA, healthcare costs were skyrocketing under President Bush. This made both providing and receiving healthcare almost impossible to do without a severe loss of assets on the provider’s parts. This itself was part of a large systemic problem that seems to have only really evolved in the United States in comparison to other countries, developed and underdeveloped, throughout the world. Surgical procedures in the United States have historically taken longer and need more people to complete than comparable nations with similar technologies. Healthcare providers in the U.S. have also offered services at extremely different costs. The price of appendectomies was used as a baseline example, showing that the United Kingdom was able to offer the surgery for less than $5,000 while America charged more than $14,000 (The Commonwealth fund, 2014).
What presented an even bigger issue, and where insurance companies can be more directly linked, was the practice of over-indulge price-gauging. The chances of a procedure costing more in a rural area hospital than a hospital in a large city were 100 percent. Insurance companies saw an “opportunity” to take advantage of the fact that rural hospitals rarely face competition, and therefore could charge more than in an urban setting, where more insurance companies and more hospitals were involved (The Commonwealth fund, 2014). Whenever questioned (which was rare), participating hospitals would state that it cost more to provide the standard of care available to urban hospitals. There is no discernable truth to that claim.
The time spent per procedure is harder to pen down, but the data is widely available. When it comes down to it, apples for apples, the United States either has very incompetent doctors who take twice as long to perform a procedure, with the help of more consultants and nurses (as well as other associated staff) than any other country in the world, or hospitals were being encouraged to take their time, make sure abundant staff was available, and that expensive supplies that could have been easily autoclaved (sanitized) were instead discarded and traded in for new products.
Although the ACA was ultimately passed and provides more oversight and allows for a more competitive market, this price-gauging can nonetheless still be seen throughout states where the ACA has effectively been choked by their governments (Rodberg, 2013). In states where the ACA has been allowed to flourish, however, the problems have seemed to de-escalate at a very high rate. Providers are now offered incentives for more efficient use of staff, time and resources. Providers that have not changed their practices have to provide more data for the patient and government regarding prices and estimated times of procedures.
The inverse problem existed, too, for providers who dealt with people who either did not have health insurance, or those who had really bad insurance plans (HMO’s). This was largely an urban problem, and the way almost all hospitals handled this was with “turn and burn” or “quantity over quality” policies, meaning the most basic and primitive healthcare was provided to these patients in an effort to quickly release them. They were then sent back out with any preventive measures being taken for readmission for the same health issues. This practice was self-defeating, as these patients frequently returned, and would have to be treated over and over again, when a better quality approach could have helped the situation. Incentives are now given to hospitals to support quality care over quantity of patients help. This may seem counter-intuitive, but if these patients do not need repetitive care, this frees up the time for doctors to ultimately help more people at a more affordable cost.
These changes have been highly effective, and some hospitals have actually shut down because they insisted on not changing their practices. Services in the 28 states with fully enacted ACA capabilities have seen decreases in time per procedure and a decreased average cost to patient per capita. On a larger scale, the cost of healthcare has slowed at a level not seen in over 60 years (Obamacare Facts, 2016). The cost to the government has increased as predicted in the Act’s infancy. In 2009, before the enactment of “Obamacare,” the cost to the government for health was 2.5 trillion dollars, and will be 3 trillion this year. This is expected to level off by 2025, and start decreasing as more efficient practices continue to become the norm.
Of course, these weren’t the only changes made by the ACA that effected the cost of healthcare in America. People who had virtually no chance of being covered by insurance companies because of pre-existing conditions now face no penalty at all for having a condition that still impacts their health. Pre-existing conditions clauses formerly used by insurance companies were perhaps the most amoral and unethical practices by American insurance companies, and were the subject of multiple documentaries, including “Sicko,” directed, produced, and narrated by Michael Moore. This is a part of the ACA not impacted by politics, meaning it must be recognized in all fifty states.
Minimum benefits are mandated under the ACA, also politics free. These are comprised of ten standards of care that must be offered under any insurance plan. This includes mental health, drug abuse rehabilitation and many other things that insurances companies tried to avoid coverage of any way they could, even if they were previously listed as being covered. This is a great example for when insurance companies hired countless numbers of investigators to look for any loophole to avoid covering costs. More stress on wellness and prevention is now placed on healthcare providers. This impacts the cost of healthcare, but also has indirect effects on pharmaceutical companies to make preventive medications more affordable.
Medicaid Expansion
Out of the many changes that were enacted by the ACA, perhaps the most controversial was the proposed expansion of Medicaid. At least that’s what several members of Congress determined when they decided to argue the point to the Supreme Court. This, Medicaid, is probably where politics and special interests enters the assessment of managing healthcare costs countrywide. For this particular portion, this paper will examine the benefits that Medicaid expansion has had on the general public in the states where it has been allowed to do so.
Medicaid has long been seen by many as a last resort resource for those who were unable to take care of themselves, unable to work and perhaps even close to death. Although these were not the ideals originally attached to Medicaid under the New Deal, that was certainly the direction it was taking. Doctors, psychiatrists, case managers, the department of health and human services and more became in charge of deciding whether a person was unhealthy enough, or had circumstances (such as being a single parent), to benefit from the 100-year-old installation of the American government. No attention was paid to those who did work, but still fell below the poverty level due to high rates of inflation and a low minimum wage.
Often these people worked at places that offered no healthcare, or the plans offered were completely unaffordable. Under the Obama’s administration and the passage of the ACA, healthcare was offered to every state in the union, and provide free healthcare for anybody who lived at a 138% of each state’s poverty level. This ensured that people who were near the poverty line could get healthcare, while those who were high enough above the poverty line could afford the plans they would be enrolled into. The plan has been a pretty big success in the states that have embraced the new standards for Medicaid. The numbers of uninsured have dropped drastically, and the overall number of uninsured in these states is expected to reach a new record low this fiscal year. Furthermore, states that have expanded Medicaid have seen overall savings in healthcare costs, especially when compared to states that have not done so (Earnest, 2013).
The Marketplace
The healthcare Marketplace is a portion of the ACA that remained intact. This allows each patient to be an informed customer when it comes to healthcare. After filling out a few short forms, the patient is given multiple options regarding healthcare. Typically, though depending on the state, and the particular region of a state, there are only three or four options available in terms of actual insurance companies, these companies are required to show all coverage options available to the patient/customer. The obvious benefit to this is transparency. The patient can look at a single screen and oftentimes see that they have fifty or sixty total options available to them. Less obvious is that this marketplace drives up competition among insurance companies, at least in states where the ACA is fully intact.
In other states, it has been found that insurance companies may be working together to keep prices higher. This is because, in these ore vulnerable states, there is considerably less oversight over these insurance companies. Another pitfall, especially for those states that do not have increased Medicaid benefits, is that the gap, rather than closing up, is actually becoming bigger, at least in the short term. As the changes take effect and providers continue to adjust, there will be growing pains. One of those growing pains are higher premiums. This is regardless of the state a person lives in. People who were once able to afford their insurance plans now cannot as a result.
Federal v. State
In this assessment, it can be reasonably shown that the Federal government has made huge advances in trying to provide more affordable and free healthcare for those who were previously not covered. At the same time, however, premiums have gone up temporarily across the nation for those who can afford healthcare. The cost to states and providers has slowed and even stopped completely, depending on their degree of adherence to the ACA.
This brings up state governments. States that have not embraced new federal standards are abject failures in terms of driving down healthcare costs. Unless the state has decided to turn back to federal standards (two have) or have successfully enacted their own virtually identical healthcare systems, these states are paying more for their healthcare at every single level. The states themselves are paying more, the providers are paying more, and the patients are paying more. Even the insurance companies are paying more, which makes these states more vulnerable to losing healthcare options. The fact of the matter is whether one wants to ignore the politics or not, partisanship has really cost states in the Midwest and South a lot due to obstructionist unwillingness to participate in helpful programs, often simply predicated on the fact that the program was offered by the opposite political party.
They would argue that it is vitally against conservative principles to have the federal government dabble in the cost of healthcare, however this argument seems highly invalid, considering that insurance companies have one principle in mind, money. What makes the conservative argument even more invalid is that diseases and accidents do not have political parties. Poverty knows no political party. When people are confronted with these life altering conditions, it can be guaranteed they don’t care one bit about principles of either party, at least in their time of need.
The two frontrunners of this presidential election cycle, Hilary Clinton and Donald Trump, have surprisingly similar outlooks on healthcare. Both seem equally concerned that the people in most need of healthcare, those still in the gap, are not getting what they need. In Trump’s paraphrased words, they are being allowed to die in the streets. Regardless of how one feels about either of these candidates, they both seem to have a degree of compassion for these people, with differences only in how they would cover the people left out by current circumstances. Hilary would seek to fix an already successful ACA, by working to modify mandates that were thrown out by the supreme court in a way that is more agreeable to both sides of the aisle, assuming the grandstanding stops, and Trump wants to do away with the ACA and begin a single-payer program, which is a topic for another paper. The overall assessment is therefore mixed. We have made improvements to control healthcare costs, but these successes have not been complete, and there is still plenty of room for improvement, regardless of party affiliation.
References
Earnest, Josh. (2013). Benefits of Medicaid Expansion for All States. The White House.
retrieved from https://www.whitehouse.gov/blog/2013/12/12/benefits-medicaid-
expansion-all-states
Commonwealth Fund. (2014). How Can the U.S. Get Health Care Costs Under Control?
The Commonwealth Fund web portal. retrieved from http://www.commonwealth
fund.org /interactives-and-data/infographics/2014/us-health-care-costs
Obamacare Facts. (2016). How Does ObamaCare Control Costs? Obamacarefacts.com
retrieved from http://obamacarefacts.com/obamacare-control-costs/
Rodberg, L. (2013). Why does U.S. health care cost so much? The hidden-in-plain-sight
answer. Physicians for a National Health Program. retrieved from
http://pnhp.org/blog/2013/07/24/why-does-u-s-health-care-cost-so-much-the-hidden-in
-plain-sight-answer/
