Healthcare reforms proposed during the Obama administration
There were a number of different health care reforms proposed during the Obama administration. Key reforms address cost and coverage and include obesity, prevention and treatment of chronic conditions, defensive medicine or tort reform, incentives that reward more care instead of better care, redundant payment systems, tax policy, rationing, a shortage of doctors and nurses, intervention vs. hospice, fraud, and use of imaging technology, among others.
The first of these reform proposals to be passed by the United States Congress is the Patient Protection and Affordable Care Act, which originated in the Senate and was later passed by the House of Representatives in amended form on March 21, 2010. President Barack Obama signed the reforms into law on March 23, 2010. Reuters and CNN summarized the reforms and the year in which they take effect.
Overview
A variety of specific types of reform have been suggested to improve the United States health care system. These range from increased use of health care technology through changing the anti-trust rules governing health insurance companies and tort-reform to rationing of care. Different overall strategies have been suggested as well.The Institute of Medicine reported in September 2012 that approximately $750B per year in U.S. health care costs are avoidable or wasted. This included: unnecessary services ; inefficient delivery of care ; excess administrative costs ; inflated prices ; prevention failures, and fraud.
During a June 2009 speech, President Barack Obama outlined his strategy for reform. He mentioned electronic record-keeping, preventing expensive conditions, reducing obesity, refocusing doctor incentives from quantity of care to quality, bundling payments for treatment of conditions rather than specific services, better identifying and communicating the most cost-effective treatments, and reducing defensive medicine.
President Obama further described his plan in a September 2009 speech to a joint session of Congress. His plan mentions: deficit neutrality; not allowing insurance companies to discriminate based on pre-existing conditions; capping out of pocket expenses; creation of an insurance exchange for individuals and small businesses; tax credits for individuals and small companies; independent commissions to identify fraud, waste and abuse; and malpractice reform projects, among other topics.
In November 2009, then-OMB Director Peter Orszag described aspects of the Obama administration's strategy during an interview: "In order to help contain cost growth over the long term, we need a new health care system that has digitized information...in which that information is used to assess what’s working and what’s not more intelligently, and in which we’re paying for quality rather than quantity while also encouraging prevention and wellness." He also argued for bundling payments and accountable care organizations, which reward doctors for teamwork and patient outcomes.
Mayo Clinic President and CEO Denis Cortese has advocated an overall strategy to guide reform efforts. He argued that the U.S. has an opportunity to redesign its healthcare system and that there is a wide consensus that reform is necessary. He articulated four "pillars" of such a strategy:
- Focus on value, which he defined as the ratio of quality of service provided relative to cost;
- Pay for and align incentives with value;
- Cover everyone;
- Establish mechanisms for improving the healthcare service delivery system over the long-term, which is the primary means through which value would be improved.
A report published by the Commonwealth Fund in December 2007 examined 15 federal policy options and concluded that, taken together, they had the potential to reduce future increases in health care spending by $1.5 trillion over the next 10 years. These options included increased use of health information technology, research and incentives to improve medical decision making, reduced tobacco use and obesity, reforming the payment of providers to encourage efficiency, limiting the tax federal exemption for health insurance premiums, and reforming several market changes such as resetting the benchmark rates for Medicare Advantage plans and allowing the Department of Health and Human Services to negotiate drug prices. The authors based their modeling on the effect of combining these changes with the implementation of universal coverage. The authors concluded that there are no magic bullets for controlling health care costs, and that a multifaceted approach will be needed to achieve meaningful progress.
During February 2010, President Obama updated his reform proposal, with modifications to the bills that had passed as of that time.
Cost overview
Health spending accounted for 17.6% of GDP in the United States in 2010, down slightly from 2009 and by far the highest share in the OECD, and a full eight percentage points higher than the OECD average of 9.5%. Following the United States were the Netherlands, and France and Germany. The United States spent $8,233 on health per capita in 2010, two-and-a-half times more than the OECD average of $3,268. Following the United States were Norway and Switzerland which spent over $5,250 per capita. Americans spent more than twice as much as relatively rich European countries such as France, Sweden and the United Kingdom.The annual rate of cost increases slowed during 2010 and 2011. The causes are disputed, ranging from recession-related delays in visiting doctors to more long-term trends in moderating insurance premiums and reduced spending on structures and equipment.
The Centers for Medicare and Medicaid Services reported in 2013 that the rate of increase in annual healthcare costs has fallen since 2002. However, costs per capita continue to rise. Per capita cost increases have averaged 5.4% annually since 2000. Costs relative to GDP have risen from 13.8% in 2000 to 17.9% by 2009, but remained at that level in 2010 and 2011.
Several studies have attempted to explain the reduction in the rate of annual increase. Reasons include, among others:
- Higher unemployment due to the 2008–2012 recession, which has limited the ability of consumers to purchase healthcare;
- Rising out-of-pocket payments;
- Deductibles have risen sharply. Workers must pay a larger share of their own health costs, and generally forces them to spend less; and
- The proportion of workers with employer-sponsored health insurance enrolled in a plan that required a deductible climbed to about three-quarters in 2012 from about half in 2006.
Best practices
Independent advisory panels
President Obama has proposed an "Independent Medicare Advisory Panel" to make recommendations on Medicare reimbursement policy and other reforms. Comparative effectiveness research would be one of many tools used by the IMAC. The IMAC concept was endorsed in a letter from several prominent healthcare policy experts, as summarized by OMB Director Peter Orszag:Both Mayo Clinic CEO Dr. Denis Cortese and Surgeon/Author Atul Gawande have argued that such panel will be critical to reform of the delivery system and improving value. Washington Post columnist David Ignatius has also recommended that President Obama engage someone like Cortese to have a more active role in driving reform efforts.