The health reform legislation that President Obama signed in 2010 has been overshadowed by our broad economic problems, and its popularity appears to be hurting even among its supporters. In short, many Americans appear to be losing interest in health reform.
This is grimly ironic, and arguably tragic, because many of the law’s critical details still need to be spelled out, and one of the most important open questions — What “essential services” must all insurance plans cover? – will be answered before the year is up.
In fact, the Department of Health and Human Services (HHS) held the first of ten public “listening sessions” on the issue on Friday in Chicago; two more will be held today in Boston and Philadelphia. (Dates and locations of the rest, and information on how to attend, is here.)
Why is the definition of “essential services” so critical? Because the success of the entire law depends on finding the right balance between how comprehensive required coverage will be and how affordable it will be.
This is crucial to understanding what’s at stake. If, on one hand, the baseline for minimum benefits is set too low, sick patients are likely to fall through the holes of “Swiss cheese” policies that don’t cover things like diabetes care management and hospice care. Wealthier Americans, meanwhile, would likely plug such holes by buying pricier, more comprehensive plans. Thus, as N.C. Aizenman of the Washington Post put it recently, “the market could end up split between cheap, bare-bones plans of use only to the healthy, and exorbitantly priced full coverage plans financially out of reach of many sick people who need them most.”
If, on the other hand, the “essential benefits” package is set too high, small employers and individuals simply might not be able to afford the premiums. The law requires everyone to buy health insurance or pay a penalty. But if the base price is set too high, many healthy young people would likely decide to pay the penalty instead of buying insurance. Meanwhile, chronically ill individuals would pile into the pricey plans, skewing the risk pool and sending premiums even higher.
So how does HHS intend to strike the right balance? The reform legislation listed 10 general categories of health services that should be covered, including mental health and substance use disorder services; oral and vision care for children; and chronic disease management. But it also asked a 19-member Institute of Medicine panel to propose a process for defining what is “medically necessary.”
On October 7 that panel issued its report, which seems to many to have erred in the direction of “too low.” In fact, the report doesn’t really pretend to follow the legislative guidelines: “Every service or item that might be classified in the 10 categories,” the panel wrote, “is not essential.”
The panel also seems to have deliberately misinterpreted the legislation’s suggestion that “essential benefits” should mirror the coverage Americans typically receive through their employers. Most observers assumed this meant the benefits that U.S. workers now receive from most mid-sized and large companies. But the IOM report recommended that the essential benefits package should be modeled on the “scope and design” of packages offered by small employers, even as it acknowledged (in an appendix to the report) that such packages are less generous and tend not to offer things like hospice care; drugs that help smokers quit smoking; services for autistic children; hearing exams and hearing aids; and diabetes care management.
In other words, the panel, like many cost-conscious observers of health care reform, implies that we must make a choice between “Cadillac care” and “bare-bones coverage” – the former being the kind of comprehensive care that most well-insured Americans currently enjoy, the latter being what we could afford under a system that covers all Americans.
But this is a false choice. We can afford to pay for a more comprehensive healthcare package for everyone if we define essential care as effective care—that is, if we finally get serious about practicing so-called evidence-based medicine. The Congressional Budget office estimates that a third of our healthcare dollars are wasted on unnecessary tests, ineffective procedures that expose patients to risk without benefit, and overpriced drugs and devices that are no better than the older products they are trying to replace.
Talk of limiting or eliminating such waste inevitably leads to demagoguery about “death panels” and the like. But the data is clear: Paying doctors to practice effective medicine rather than for delivering every conceivable treatment and procedure is not only more cost effective, but also keeps people healthier.
To its credit, the IOM report does talk about the importance of “evidence-based” medicine – but didn’t seem willing to embrace its promise.