Reform At Year One: The Economist’s View

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Roger Collier

First published 3/31/11 on Health Reform Update

Sometimes, in the middle of a hotly-argued partisan battle, it can make sense to look at the opinions of more distant and possibly more objective observers. When the battle involves American politics, the international press sometimes offers valuable—and possibly more realistic—perspectives than those available to readers and viewers of domestic media.

Accordingly, on the first anniversary of the enactment of the Affordable Care Act, it was particularly interesting to look at health care reform’s coverage in the influential Economist magazine.The Economist, in its March 19-25 edition, was less than positive about the present status of reform or either the hopes of its backers or the allegations of its opponents.

In terms of current status, the magazine noted “the administration has rushed into force provisions affecting consumers directly, in an effort to win popular support…” and listed Medicare’s new preventive service coverage and drug “donut hole” rebates, as well as the new prohibitions on lifetime payout caps and on denying coverage to children with pre-existing conditions. (In fact, the implementation was “rushed” only to comply with the schedules built into the new law.) The magazine commented that while all this may seem impressive, one recent poll indicated that half of those polled believed that the entire ACA had already been repealed or at least could be unconstitutional.

The Economist went on to ask what the likely long-term impact of the ACA will be, and commented that both Democrats’ hopes for lower costs and Republicans’ forecasts of the destruction of employer-sponsored insurance are probably wrong. As the magazine pointed out, forecasts of the death of employer coverage are countered by recent studies that project the opposite: many employees facing the individual mandate (if is not found unconstitutional) are likely to pressure their employers for tax-assisted coverage. On the other hand, as the Economist notes, the Obama administration’s hopes for ACA-influenced cost control seem even more unrealistic, with Massachusetts, the prototype for ACA reform, now seeing cost control as the immediate urgent issue.

The bottom line, says the Economist: “America will soon have no choice but to come to grips with cost. Whatever one thinks of Mr. Obama’s reforms, there is no denying that they have brought that day of reckoning closer.

But is the Economist correct? In a later post, we’ll look at proposals for health care cost control, and their chances of success.

Roger Collier used to lead a large health care consulting practice. He writes at Health Reform Update.

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