Spotlight Essay: Healthcare After 2014

By Joel C. Cantor

[Joel C. Cantor is the director of the Center for State Health Policy and professor of public policy at Rutgers University. He has authored numerous studies of health insurance regulatory policy, healthcare delivery system performance, and access to care for low-income and minority populations. He serves frequently as an advisor on health policy matters to New Jersey state government.]

Understandably, the attentions of health-policy watchers are focused intently on the implementation of the landmark 2010 health reform law. The future of the law seems as unsettled as ever.

"Obama-care" draws sharp barbs in the nascent presidential-nominating race. Meanwhile, appellate review of constitutional challenges to the Patient Protection and Affordable Care Act (ACA) grinds toward a Supreme Court showdown.

Closer to home, New Jersey -- and indeed most state governments regardless of party control -- is engaged in high-level decision making about how health insurance exchanges, oversight of private insurance and other features of the law will take shape as 2014 approaches, when most Americans will have to buy coverage or face penalties.

With many ACA implementation deadlines over the next 27 months, it is easy to lose sight of one of the most daunting healthcare challenges in New Jersey and the nation -- how to stem the relentless growth of healthcare costs.

The data puts this challenge in sharp relief. New Jersey has among the highest per capita healthcare spending in the U.S., the nation with the most expensive healthcare system in the world.

U.S. health spending per capita is more than twice the median of the Organization for Economic Cooperation and Development (OECD) member nations, and nearly 50 percent higher than the next most expensive OECD country.

Worse, while we lead in spending, accessibility, quality, and healthcare outcomes in the U.S. lag in contrast to our peer nations. The trends do not look good either. National healthcare spending is expected to grow at an average rate of 5.8 percent between 2010 and 2020.

As U.S. healthcare spending approaches one-in-five dollars of the U.S. economy, it is easy to see that our system is simply unsustainable. Indeed, the single biggest contributor to the U.S. debt crisis is Medicare and other federal health programs.

Observing the ongoing healthcare policy debates in this country, one could not be faulted for suggesting that the ACA simply adds more covered lives to the sinking ship of U.S. healthcare, but that would be too simplistic. Many have criticized national health reform for not doing enough to "bend the cost curve," but the ACA and related policy initiatives include dozens of provisions intended to stem cost growth.

Foremost, the ACA seeks to change incentives faced by providers, particularly in Medicare. Under the current system, delivering more care is almost always rewarded financially, regardless of its value for patients. The most widely touted of ACA provisions designed to change this incentive is the Medicare Shared Savings Program (also known as Medicare Accountable Care Organizations or ACOs), which will give financial rewards to groups of healthcare providers that successfully trim cost increases while maintaining or improving quality of care.

The national reform also promotes more consistent use of the most effective preventive services, like blood pressure monitoring. Other ACA provisions, like a tax on high-cost employer-sponsored plans, are designed to give the private sector incentives to engage in more effective means of slowing cost growth.

The ACA also makes substantial investments in developing new reimbursement incentives and efficient delivery systems, as well more evidence about the effectiveness of alterative clinical approaches.

Continue reading this story in NJ Spotlight.

NJ Spotlight is an issue-driven news website that provides critical insight to New Jersey’s communities and businesses. It is non-partisan, independent, policy-centered and community-minded.