democracy is a work in progress

Limits to What We Know

ACA’s Impact on Provider Shortage

One concern regarding the ACA’s goal of expanding healthcare coverage was that, given the existing shortage of healthcare providers, the medical infrastructure would not be able to absorb the influx of new patients. Although the ACA greatly increased the number of people with insurance, especially through Medicaid, “findings on expansion’s effect on provider capacity are mixed, with studies showing increases, decreases, or no effects on measures like appointment availability or wait times”, according to a report by Kaiser Health News.

The best alternative to fee-for-service

The American system is primarily based on a fee-for-service model, in which healthcare providers are paid for each service they provide. Critics note that this system rewards providers for treating illnesses, instead of for keeping people healthy, and provides incentives for incurring more costs. There is a built-in incentive to do more (and more expensive) tests and more treatment, because the more one does, the more one gets paid. This approach can encourage wasteful use of resources by having different providers focused narrowly on their specialties, and provides little incentive to bring different providers together for a holistic approach and coordinated care.

The ACA contains provisions for Medicare to test alternatives, such as value-based models, in which providers are paid based on patient health outcomes. The theory is to give providers financial incentives to help patients improve their health, reduce the impact of chronic diseases, and live healthier lives. Payments are based on the outcome of care, not on the number of visits or procedures completed. One Medicare program encourages the formation of accountable care organizations to treat patients more holistically and in better-coordinated fashion.

Other alternative approaches include capitation systems in which providers are paid a set amount per-person for caring for a population of patients (such as in some health maintenance organizations). And reference-based pricing has gained some traction in the state of Montana and elsewhere.

To our knowledge, no comprehensive assessment and comparison of these approaches has been made to date.

Confusion Around Medicare and Medicaid, Obamacare and the ACA

We don’t know the extent to which confusion around Medicare, Medicaid, Obamacare, and the ACA, created by misinformation and partisan disinformation, has affected the debate over how to best increase access to health insurance.

The Affordable Care Act and Obamacare both refer to the same legislation passed in 2010. Yet, a poll conducted 7 years after its passage found that more than a third of Americans (35%) did not understand that the ACA and Obamacare are the same thing.

The same poll revealed confusion over the relationship between Medicaid and the ACA. “Only 61% of adults knew that many people would lose coverage through Medicaid or subsidies for private health insurance if the ACA were repealed and no replacement enacted,” the researchers wrote.

This kind of confusion about government healthcare programs was particularly evident in the period when the ACA was being considered in Congress. Despite the fact that the ACA lowers the cost of Medicare, a federal government program, many people—including Medicare recipients—attended meetings sponsored by their members of Congress carrying signs that said: “Keep your government hands off my Medicare.”

Related Problems: National Debt, Income & Wealth Inequality

Contributors: Eric Seaborg, Ciara McLarenGeorge Linzer

Published: May 27, 2021

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