Editorial: Will Obamacare work? We’re about to find out
For at least three decades the mantra, particularly among conservatives, has been that competition will bring down the cost of health care. By and large, for many reasons, it hasn’t, but under the Affordable Care Act known as Obamacare, the belief is about to get a direct test.
If too few insurers agree to participate in the health care exchanges, if the prices insurers and providers demand are too high, and the subsidy required to make insurance affordable for the tens of millions of Americans without it too big, the experiment will fail. If so, the outcome will almost certainly be what almost all developed nations have and most critics of Obamacare don’t want: a single-payer health care system.
Only one insurer, Anthem Blue Cross Blue Shield, will be enrolling patients when New Hampshire’s federal/state health insurance exchange opens next month. So no competition there, at least not among insurers. That’s expected to change next year, since several insurers licensed by the state say they expect to join the exchange once they have more information.
Instead, as Concord attorney Curt Whittaker explained in these pages last week, market place forces came into play when Anthem, like many of its counterparts nationwide, decided to offer customers on the exchange a limited network of providers. The network incudes just 16 of the state’s 26 hospitals, those willing to swallow hard and accept the reimbursement rates Anthem offered. Concord Hospital is notably absent from the list. Mike Green, the hospital’s CEO, says that accepting Anthem’s rates would threaten the long-term financial health of the hospital and its ability to provide high-quality care. That may well be true.
The details aren’t public, but the reimbursement rates Anthem offered providers were probably based on those paid to care for people age 65 and older under Medicare. That rate is less than the going rate charged by providers, though not so low as the rates paid to care for the poor on Medicaid. They are, however, low enough that Anthem expects to lower the premium charged for its exchange plan by about 25 percent. Can hospitals and other providers maintain the level of care now provided when they are paid Medicare-like rates to care for more and more of their patients? It looks like we’re going to find out.
No way has yet been found to create a system with low costs, high quality, and convenient and rapid access to care. Something has to give, and in recent years, it’s usually been the percentage of health care costs paid by employees instead of employers. In the model Anthem is about to launch, it appears that convenience will suffer. People will have to travel further, and perhaps wait longer, to get care. If the price is right, that trade off may be acceptable.
In time, as more people shop on the exchange, perhaps because more employers drop health plans in favor of subsidizing employee purchases of insurance on the exchange, providers not in the network will presumably feel pressure to accept the reimbursement rates insurers offer. Otherwise they’ll lose market share. Again, we’ll see.
What may also happen, and this may be the best outcome of all, is that the changes called for under the Affordable Care Act cause insurers and providers to collaborate in ways that reduce costs by doing more to keep patients healthy in the first place. Continuously increasing health care costs, long the leading cause of personal bankruptcy, aren’t sustainable. The health care reforms under way may not be the answer, but if they don’t succeed, either the rolls of the uninsured will continue to grow and decent coverage become a rarity, or everyone will wind up on some form of national health insurance.