What the ACA can't cure

I recently referred to Investor's Business Daily reporter Jed Graham's coverage of the ACA as "adversarial." He objected. I responded, "I don't ignore or minimize ACA flaws but would not object to a characterization of my writing on it as "sympathetic."

That set me thinking about everything that troubles me about the ACA -- or, more accurately, things that trouble me about the US healthcare system that the ACA is unlikely to fix -- though it may help catalyze reform on several of these fronts. Here's the list:

1. All private health insurance in the U.S. is inadequate -- thanks to the shameful out-of-network billing, balance billing, and creative billing by hospitals, physicians and other providers documented in sickening detail by Elisabeth Rosenthal in her Paying Till it Hurts series. We are in the grip of a depraved system in which hospitals often operate as free billing zones and payers' attempts to control costs just generate new loopholes.

2. For the unsubsidized and lightly subsidized, private insurance on the ACA exchanges is too expensive. Or rather, medical care obtained under the insurance is too expensive.  One of the law's strengths is the Cost Sharing Reduction (CSR) that reduces deductibles and out-of-pocket costs for buyers with incomes below 200% of the Federal Poverty Level to levels comparable to those offered in top-grade employer-sponsored insurance (much more modest CSR is offered to those between 200% and 250% FPL).  Those cost control come into play if low income buyers choose silver plans (fortunately, most do) and if  they are not hit by the kind of out-of-network and balance billing that Rosenthal documents. Those above 200% FPL, however, have to choose between high monthly premiums and often sky-high deductibles, average over $5,000 for bronze plans (which may be tempting to many at the upper range of subsidy eligibility).

Elisabeth Rosenthal exposes hospitals as free-billing zones

I stand back in awe from the healthcare reporting of The New York Times' Elisabeth Rosenthal, who since June 2013 has been exposing in front-page blockbuster after blockbuster the rampant greed and depraved price-gouging endemic to the US healthcare system. Her nine-part "paying till it hurts" series, indexed here, is worthy of a Pulitzer. It should galvanize the country as Silent Spring or The Other America did.

Rosenthal's latest exposes many hospital ORs as free-billing zones in which an array of doctors, physical therapists and other service providers can insinuate themselves in a procedure without the patient's prior knowledge or consent, whether they're in the patient's insurance network or not -- and then relentlessly pursue either the insurer or the patient or both for their exorbitant billings.

The most egregious example Rosenthal spotlights is when neurosurgeons or orthopedists call in out-of-network surgeons to assist -- who bill at out-of-network rates, to the tune of $117,000 in the headline case.  Then there's the smaller-scale gouging:

Unexpected fees are routinely generated outside the operating room as well. On the wards, a dermatologist may be called in to examine a rash and perform an expensive biopsy. The person in scrubs who walks a patient to a bathroom for the first time after hip surgery may turn out to be a physical therapist billing $400.

Rosenthal's fully-documented examples will make you afraid ever to set foot in a hospital -- unless perhaps you're on Medicare with full-bore Medigap insurance. A few policy takeaways from this tale of systemic depravity:

What Avik Roy won't tell you about healthcare in Switzerland and Singapore

Avik Roy so despises the Affordable Care Act that he wants it to swallow Medicare and Medicaid.

According to Roy's latest sketch of a conservative plan to offer universal health insurance, Medicare and Medicaid are the chief culprit in the United States' uniquely expensive healthcare system -- notwithstanding that they pay less per procedure than private insurers and patients, and that most experiments in alternatives to fee-for-service payment are located within them.

In Roy's free-market healthcare vision, Medicare and Medicaid patients would be transitioned onto deregulated health insurance exchanges, where insurers would be free to offer even skimpier insurance than the current exchange bronze plans, designed to cover just 60% of average patient costs. They might also be free to expand the ACA's age-rating, which limits the ratio of older patients' premiums to young patients' to 3-to-1, and be freed from offering the ACA's minimum essential benefits.

To flesh out this vision, Roy touts the virtues of his two favorite national systems: those of Singapore, which features mandatory individual health savings accounts (HSAs), and  Switzerland, in which everyone buys insurance on private exchanges (subsidized for about a third of the population). But as is his wont, Roy fails to mention the feature that enables each of these systems work: strong government influence over pricing.

Take first Roy's sketch of Switzerland's free market system:

The ACA as a framework for (further) conservative healthcare reform

Austin Frakt does AEI's James Capretta the honor of seriously considering* elements of Capretta's attempt (with Douglas Holtz-Eakin) to fill in the long-empty "replace" blank in Republicans' purported "repeal and replace" program for the Affordable Care Act. After spotlighting various lacunae as well as potentially workable elements in Capretta's "decentralized, market-diven alternative to the PPACA," Frakt comes to a core point, implicitly questioning whether conservative healthcare wonks are acting in good faith:

6...Democrats are well aware of the limitations and problems with the Affordable Care Act. Some are so troubling that the administration is considering some interesting proposals that would require Congress to act. Point being, there is leverage for some negotiation on some aspects of the law. And, crucially, some of the things Capretta has proposed fit within the structure of the ACA, such as allowing Medicaid enrollees to buy exchange plans (see Arkansas), capping the employer-sponsored insurance tax subsidy (see the Cadillac tax), or making exchange plans more catastrophic. But that brings me to …

"Government-run healthcare," Singapore style

In his long rhetorical war against the Affordable Care Act, Avik Roy likes to hold up Singapore's healthcare system as a shining counter-example. He quite rightly points out that Singapore spends far less on healthcare than the U.S. (4% of GDP vs. 18% for the U.S.), and with better outcomes. How do they do it? Roy -- while acknowledging one aspect of the government's heavy hand --  credits free-market magic:

The key to the Singapore system is mandatory health savings accounts: again, something that libertarians and many conservatives wouldn't like. Matt Miller of the Center for American Progress describes Singapore as "further to the left and further to the right" than the American system--something that could also be said of Switzerland.

In which Ezra Klein makes Avik Roy acknowledge why U.S. healthcare costs are so high

Avik Roy and Ezra Klein had a long --very long -- conversation about Roy's beefs with the Affordable Care Act. They covered "rate shock,"  minimum coverage standards, and Roy's dreams of a more fundamental system overhaul that would push everyone onto healthcare exchanges by privatizing Medicaid and Medicare and ending the employer tax deduction for health care benefit provision. 

Roy has been a relentless critic of the ACA. Having read some of his writings about it but by no means all, I was surprised to learn, as Klein probed his reaction to feature after feature, that he "do[esn't] have* a problem with standardizing benefits" and that "guaranteed issue [no refusals or cost bumps for preexisting conditions]is fine." His objections really boiled down to three: 1) he objects strenuously to "community rating," i.e., the ACA's limiting of the price differential between the youngest and oldest age cohorts to 3-to-1, as opposed to the roughly 6-to-1 ratio that Roy says the market would dictate.  2) He would like the exchanges to offer plans that cover even less than the lowest cost plans in the current design -- plans covering, say, 40% of a member's average yearly costs rather than the 60% that the exchange's lowest-run "bronze" plans are designed to cover. 3) As mentioned above, he would like more radical reform -- health exchanges for everyone.

As Klein eventually made Roy implicitly acknowledge, though, none of his favored solutions get at the root of the United States' disproportionate healthcare inflation.

1994: When a caning seemed like torture

A chance association turned my thought today to Michael Fay, the American teen who in 1994 was sentenced to be caned in Singapore after allegedly vandalizing cars. Fay pleaded guilty on the understanding that he would not be caned and later claimed that he had never vandalized any cars, only stolen a couple of street signs. Judicial caning in Singapore is extraordinarily painful and can leave scars for years. Barely budging in response to U.S. pressure, the Singaporean government reduced the sentence from six cane strokes to four - and carried it out.

My thought was that if the incident happened today, the U.S. government would never have the face to plead and pressure Singapore for clemency, as President Clinton and much of the U.S. Senate did in 1994. According to Wikipedia:

The official position of the United States government was that while it recognized Singapore's right to try and punish Fay with due process of law, it deemed the punishment of caning to be excessive for a teenager committing a non-violent crime. The United States embassy in Singapore pointed out that the graffiti damage that Fay made on the cars was not permanent, but caning would leave Fay with physical as well as long-term emotional scars.

U.S. President Bill Clinton called the punishment prescribed by Singapore as extreme and mistaken, continuing to pressure the Singaporean government to grant Fay clemency from caning. Two dozen U.S. senators signed a letter to the Singaporean government also appealing for clemency. After Fay's punishment was carried out, the United States Trade Representative said that he would try to prevent the World Trade Organization's first ministerial meeting from taking place in Singapore.

Following Fay's sentence, the case received wide coverage by the U.S. media and dozens of reporters were sent to Singapore to cover the case.^[1] The New York Times had several editorials and op-eds that condemned the punishment and called the American public to flood the Singaporean embassy in the United States with protests. Newsday wrote about a person who claimed to have witnessed a graphic public caning event in Singapore, despite the fact that Singapore does not practice public canings. Some commentaries treated the Michael Fay affair as a clash of civilizations between Asian values and the differing view of human rights common in liberal western cultures.

In 1994 as today, there was no shortage of brutality in U.S. prisons equal to and exceeding officially administered caning. Still, the high assumed moral ground from which this plea was made stings now -- after six years in which the U.S. has tortured to death dozens of people in its custody and subjected hundreds of terror suspects to isolation, sleep deprivation, sustained standing, stress positions, beatings, extremes of heat and cold, sexual humiliation and in some cases waterboarding.

Today we've reached the point where a U.S. citizen, detained and tortured by the Chinese for protesting repression in Tibet, goes out of his way to note that his treatment was less harsh than that meted out out to U.S. detainees in Guantanamo. Here's graffiti activist James Powderly, held in detention in China for six days, describing his treatment to Jen Carlson of Gothamist:

Would you say the interrogations were torture? Well, I think probably, a lot of people might disagree, even some of my other detainees might feel like what they received wasn't torture. And relative to what someone might receive on a daily basis at a place like Gitmo it certainly is not particularly harsh. It's kind of like being a little bit pregnant, we were a little bit tortured. We were strapped into chairs in uncomfortable positions, we were put into cages with blood on the floor and told we would never live, we were sleep deprived the entire time. There was an interrogation every night and they kept us up all day. They never turned the lights off in the cells. We were fed food that was inedible, we were not given potable water. Any time you threaten and take the numbers of family members and take down home addresses, there's an element of mental torture there. There's physical torture in the form of us having to sit in uncomfortable positions all day long and spending the night strapped to a metal chair inside of a cage. We all have cuts and bruises from that, and some of my peers were beaten up a little bit.

People worry about American decline. Well, here it is. If we don't roll back and repudiate the torture regime put in place by the Bush Administration, we'll have destroyed our most precious inheritance, the foundation of our prosperity and creativity and ultimately, our power.