Mar 20, 2020

On the Tenth Anniversary of Obamacare, the Question Is Still More Important Than the Answer

Why we’ll never get the right health care solution by asking the wrong questions
Robert Graboyes Senior Research Fellow , Robin Currie Senior Writer

Albert Einstein allegedly said that if he had an hour to solve a problem, he would spend 55 minutes figuring out the right questions to ask. “If I knew the proper questions,” he said, “I could solve the problem in less than 5 minutes.”

As the current paradigm for solving America’s health care problems, the Affordable Care Act (ACA, or “Obamacare”) seeks to answer the following: How can we get more people insured? There are more important questions to ask.

Dividing Up the Health Care Pie vs. Making a Pie Bigger

More people with health insurance does not necessarily mean more people getting care. Like conservative repeal-and-replace proposals, the ACA (which turns ten on March 23) may increase health care demand but does little to increase supply—the number of doctors, nurses, hospital beds, drugs, devices, and so forth. Nor did it significantly alter practice patterns—the recipes for combining those resources into care. If one hour of care for a new patient comes at the expense of one hour of care less for someone else, then health care reform merely becomes an exercise in redistribution.

Simply put, for too long the focus of both the political Left and Right has been on re-slicing the health care pie rather than on delivering more care—a bigger and tastier pie, so to speak. To get beyond today’s zero-sum game means taking Einstein’s advice and asking the proper question.

In this case, the proper question is simple and clear: How can we provide better health care for more people at a lower cost, year after year? The answer is clear as well: We must embrace technological and institutional innovation.

US health care needs the kind of disruptive innovation that has transformed other sectors of the economy—transportation, agriculture, manufacturing, information technology, etc.—through plunging costs and soaring quality. Without it, health care may come to more resemble the steel industry during the last century—a powerful force barricading itself against competitors, followed by decline and rust.

Take the Case of IT

When new technologies began to emerge in the information technology sector a quarter-century ago, America’s political leadership largely took a hands-off approach and allowed that industry to develop and flourish with minimal legal and regulatory barriers. The emphasis was on entrepreneurship and experimentation, not regulation and redistribution. Computers, smartphones, and the Internet flourished. These technologies went on to completely change the daily lives of Americans and the lives of people all around the world. It’s no coincidence that this period of foment also saw the greatest rise out of poverty in human history.

Three decades ago, only the very wealthy could afford the first (clunky) mobile phones, which were just able to make phone calls. Today, by contrast, smartphones are almost ubiquitous worldwide and even the cheapest handsets can perform myriad tasks unimaginable in the 1990s. Yes, there are still differences in devices and plans. But the vast majority of people are better off as a result, and everyone knows it.

At least 96 percent of Americans now own a cellphone of some kind. At the same time, few of us say: “You get 3 GB of data a month. I get just 1.4 GB. The government should make you give me some of yours.” And here’s something else to remember: when innovation creates dramatic improvements and allows virtually everyone to afford access to something, there’s less clamoring for “redistributive justice,” and less political acrimony.

Over the next 25 years, new approaches and new technologies can do for health care what they did for IT. But disruptive innovation requires three conditions currently absent in much of the health care industry:

  1. innovators must be allowed to innovate;
  2. consumers must have choices; and
  3. price and quality information must flow among consumers and producers.

Letting a Thousand Flowers Bloom

Despite their partisan battles, the Left and Right actually share the same detrimental worldview when it comes to health care. They both suffer from an excessive aversion to risk and a deference to health care sector insiders—doctors, hospitals, manufacturers, insurers. As a result, barriers to health care innovation are high, and many of them emerge from state laws and regulation.

At the same time, if there is a silver lining in Coronavirus pandemic currently sweeping the nation, it is that states and the federal government are suddenly—and breathtakingly—more open to allowing and even encouraging these innovations. For instance, the federal government has just expanded telehealth options for Medicare beneficiaries, several states have scaled back certificate-of-need (CON) laws that can impede fast action by health providers, and new federal regulations will allow physicians and other licensed providers to practice across state lines. These are just three of the promising approaches and technologies on the table. They include the following:

  • Expanding telemedicine: This is a potential game-changer in health care. It offers patients immediate, high-quality care wherever they are, at any time of the day or night. We are seeing the value during the coronavirus epidemic, as patients (with or without signs of the disease) can receive care without entering medical facilities where the virus could be rampant.
  • Encouraging use of drones: In some parts of the world, unmanned aerial vehicles transport blood, vaccines, and other medical supplies at a low cost. Here in the United States, this would be an especially important innovation. If an expectant mother in labor begins hemorrhaging in a remote town, in an urban area clogged with traffic, in an area with iced-over roads, or in a zone wracked by earthquake, blood carried by drone can mean the difference between life and death. China, in the midst of the coronavirus epidemic, is shuttling medical supplies using remotely piloted helicopters. Thus, lifesaving supplies can be transported into hot zones without putting pilots or medical personnel at risk.
  • Empowering non-physician providers: Nurse practitioners, pharmacists, and other medical personnel should be allowed to practice up to their qualification level without physician supervision, thus extending the supply of caregivers without having to pay them physician-level salaries. This simple innovation can expand access to care, as there are whole counties in the U.S. where not a single doctor lives or practices.
  • Abolishing or lessening CON laws: Certificate-of-need laws counterproductively require hospitals and other providers to undergo costly, lengthy state government approval processes to open new institutions or offer new services at existing facilities.
  • Easing professional licensure requirements: States can make it easier for physicians and other providers to practice, increasing the number of qualified people providing health services. In 2019, for example, Arizona made it possible for health care providers who are licensed in other states and who move to Arizona to begin practicing without delay.

Bipartisan Potential

For the most part, these ideas are not partisan or controversial. Indeed, in a number of state capitals, the sort of reforms described above have been adopted with strong support from both sides of the aisle. That’s enough to create incentives for further experimentation and discovery. Some new ideas will succeed and warrant adoption; others will fail and be abandoned. No one can know in advance which path a particular innovation will take. That’s how innovation works.

In health care, as elsewhere, politics generally only raises its head when there are winners and losers associated with a proposed course of action. Reforms that mostly yield winners—and there are plenty of such options—are less controversial. The ACA, conservative repeal-and-replace proposals, Medicare for All, a public option, and other proposals focused on federal insurance law are largely redistributive in nature—making some people better off and others worse off. In contrast, innovations can improve life for nearly everyone, regardless of their insurance status. They offer the chance of better health care for more people at a lower cost, year after year.

The Allure of a Plan

Of course, in our nation today, politics likes to rear its head. And as the ACA reminds us, grand, overarching schemes to reinvent the entire health care system can invite chaos and disappointment. Smaller, nimbler reforms are likelier to enjoy greater success.

The answer lies in asking the proper questions.

Photo: Alex Wong / Staff

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