In his op-ed in the New York Times, Robert Pear has lurched uncontrollably towards the observation I made back in 2009:
WASHINGTON — The fierce struggle to enact and carry out the Affordable Care Act was supposed to put an end to 75 years of fighting for a health care system to insure all Americans. Instead, the law’s troubles could make it just a way station on the road to another, more stable health care system, the shape of which could be determined on Election Day.
My complaints at the time were that the PPACA didn’t do much about the most pressing problem with our healthcare system and that the way it was enacted poisoned the well. Even though it manifestly would require additional reforms, it made such reforms less likely rather than more likely.
The most pressing problem then as now was the increasing cost of healthcare. In 2014 for example the general rate at which prices were increasing was essentially flat while the rate at which healthcare prices were increasing was about 3%. In other words, we were actually experiencing deflation which was masked by healthcare price increases proceeding rapidly. That is not the direction for greater affordability but because the PPACA subsidizes the healthcare insurance of most of those not covered by employer-based plans, Medicare, or Medicaid, that’s hidden behind a curtain.
My interpretation of that is that healthcare spending is in a positive feedback loop. Spending by government at all levels on healthcare represents the majority of healthcare spending (something between 50% and 70% when everything is taken into account) and establishes a floor for healthcare spending. As that ratchets up, private healthcare spending must continue to exceed it. If my interpretation is correct then the method of reforming the PPACA preferred by many Democrats:
The departing president, the woman who seeks to replace him and nearly one-third of the Senate have endorsed a new government-sponsored health plan, the so-called public option, to give consumers an additional choice. A significant number of Democrats, for whom Senator Bernie Sanders spoke in the primaries, favor a single-payer arrangement, which could take the form of Medicare for all.
will have perverse consequences.
A number of years ago the then-head of the Mayo Clinic characterized the reason for the high costs of U. S. healthcare as “too many people making too much money”. The problem of increasing costs cannot be addressed unless one or both of those issues is addressed.
