American Politics, Health, Healthcare

Coding Obamacare

Irrespective of the outcome of the latest round of litigation, The ACA or “Obamacare” is neither the catastrophe its critics predicted nor the unmitigated success some of its supporters now herald.

Partly, this is a function of its Herculean objectives. It aimed to increase coverage and competition while reducing costs; goals which were not only expansive but inherently contradictory. Larger, more consolidated systems practicing economies of scale may increase coverage, yet present a tradeoff in terms of reduced competition and monopolistic pricing.

The ambiguity of the law’s impact is also obscured by misleading headline statistics. The reduction in the uninsured rate since the law’s passage is impressive, though this says little of the quality of coverage that the newly insured receive. With many covered under the auspices of Medicaid – a program fewer than half of doctors accept – whether this coverage necessarily translates in to care received is harder to tell.

On the reverse, the increase in emergency room visits – the main option for those without insurance – is up. Yet this is not as damning of the law as it first appears. The share of uncompensated care which hospitals are performing is declining, suggesting that while the volume of visits may be up, so too are those able to pay. This reduces the strain on the primary components of America’s healthcare safety net.

There are further issues with the law. The biggest story in American healthcare over the past decade has been the decline of private practice. Barely a third of American doctors run independent practices now, compared to more than 60% in 2008. While the escalating costs and diminishing returns of private practice predate Obamacare, it is likely to compound them. Its provisions relating to digitising health records and changes to physician reimbursement rates will likely place additional burdens on smaller providers, as well as on rural and community hospitals.

Obamacare was one of the most substantial domestic policy interventions since the Great Society – arguably completing LBJ’s unfinished business. It has been neither a fundamental failure nor a spectacular success. It has had clear benefits and will impose real costs. In other words, it is like any other law.


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