Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.
One of the big surprises about the economy's worst quarter in five years was the decline in health spending as millions of previously uninsured people were gaining new coverage under Obamacare. The health spending drop was quite the dramatic revision from the original 9.1 percent growth estimated just a couple of months earlier.
That's to say that the fears of previously uninsured patients showing up all at once at hospitals' and doctors' doorsteps after coverage expanded Jan. 1 didn't materialize in the first quarter, but no one's expecting that to last. Health-care spending is inevitably going to pick up as people start using their new coverage.
But what care will they be seeking? A new study published in JAMA Surgery suggests the immediate effects of the coverage expansion will be an increase in elective surgeries aimed at improving a person's quality of life — think of things like knee replacements and back surgeries — as opposed to surgery immediately addressing life-saving conditions.
Chandy Ellimoottil and colleagues at the University of Michigan reached this conclusion by studying the 2006 Massachusetts health-care law, which became the basis for the Affordable Care Act. The state's experience provides some of the best insight into what could happen under the nationwide coverage expansion, but it's not a perfect comparison — Massachusetts already had one of the nation's lowest uninsured rates before Romneycare and a strong safety net for uninsured individuals.
Michigan researchers examined surgery rates for people ages 19 to 64 between 2003 and 2010, which captured the experience just before and after the Massachusetts coverage expansion took effect in 2007. Comparing surgery rates to those in New York and New Jersey, the researchers found the coverage expansion in Massachusetts increased elective surgeries 9.3 percent three years after the law took effect. The increase was more dramatic among nonwhite populations (19.9 percent), who face disparities in care.
Interestingly, the researchers found that the rate of needed surgeries decreased 4.5 percent in Massachusetts over the same time as they increased in New York and New Jersey. They weren't so sure what caused this, but they suggested part of the reason was better access to primary and specialty care in Massachusetts helped catch health problems before they escalated.
If the Massachusetts experience holds true for the country, the researchers figure the ACA will result in about 500,000 additional elective surgeries across the country through 2017. However, that number could be unreliable for a number of reasons, including the difficulty in actually determining what qualifies as an elective surgery. But the key takeaway offered by the researchers is this:
Relevant to policy makers and payers, our results suggest that expected long-term cost savings from national insurance expansion may be dampened to some extent by the increased use of certain expensive inpatient elective surgical procedures. To this point, health care spending in Massachusetts has grown substantially in the last 5 years. From a policy perspective, the value of such expenditures will depend on whether, and to what extent, greater access to such procedures actually improves quality and/or quantity of life for newly insured individuals.
In blunter terms, will the coverage expansion be worth it? Another recent study suggested Massachusetts saw a 3 percent reduction in its mortality rate four years after its coverage expansion took effect, which prompted some debate about whether that was enough to justify the government investment.
So health insurance expansion may provide longer and better lives. A key question is how much we're willing to spend for that.
Top health policy reads from around the Web:
The contraception coverage work-around isn't working. "The U.S. Supreme Court's suggested work-around to provide and pay for employees' birth-control coverage at businesses whose owners have religious objections hasn't worked in practice, say the companies administering it. While free birth-control coverage is required under the Affordable Care Act, the insurance administrators providing it for workers at religious-affiliated groups say the current solution has left them stuck with the bill. That may be further exacerbated by the court's ruling, which exempted for-profit, closely held companies whose owners have religious objections, said Mike Ferguson, chief executive officer at the Self-Insured Institute of America." Alex Wayne in Bloomberg.
All the different and confusing ways the government buys drugs. "Purchases by the Pentagon, Medicare, Medicaid, and other federal programs account for more than a quarter of all U.S. retail prescription spending, which reached $263 billion last year. You might think that kind of buying power would entitle Uncle Sam to get the best price all the time. If only that were true." John Tozzi in Bloomberg Businessweek.
Berkeley will put soda tax to voters. "A California college town known for its liberal activism will vote in November on whether to place a penny-per-ounce tax on sugary beverages, touching off the latest obesity-fighting campaign in the United States. Berkeley City Council voted unanimously to add the measure in the form of a referendum on the city's ballot, drawing cheers of support from residents and health advocates, and vows to fight from the U.S. food and beverage industry.... Public health advocates across the country have clamored for ways to reduce consumption of sugary drinks and junk food, but lawmakers and voters have generally opposed enacting taxes or other regulations." Jennifer Chaussee for Reuters.